March 15, 2010

Ex-Verrill Dana partner sentenced to 28 months 28 months for tax evasi


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Courtesy photo... John Duncan, a former Verrill Dana partner who was fired for stealing.

Staff Writer

A federal judge on Thursday sentenced former Verrill Dana law partner John D. Duncan to 28 months in prison for tax evasion as part of an extraordinary case that stunned Maine's legal community.

U.S. District Judge George Singal told Duncan that he broke an important public trust when he stole $300,000 from his clients and the prestigious Portland firm.

''People wonder who they can believe in,'' Singal said. ''That's the real damage here. People's ability to trust has been harmed across the board.

''It pains me that someone as well-educated as you are, an individual who the community should look up to has fallen so far.''

Duncan, 54, of Falmouth, started at Verrill Dana in 1978 after graduating from Bowdoin College and receiving a law degree from the University of Virginia. Over the years, he earned a reputation as one of the state's best lawyers for handling wills, trusts and estates.

After his thefts over the past decade were discovered, Duncan was expelled from the law firm last November. He also was permanently disbarred in July by the state supreme court -- a penalty believed to be the toughest ever imposed against a Maine lawyer for professional misconduct.

For the first time, Duncan spoke publicly Thursday about his crimes and the ripple effect they have had.

He said that at his law school graduation 30 years ago, if someone had told him that he would someday stand as a defendant in federal court, he would have said they were crazy.

''I have gone far astray from the ideas and ideals I had,'' Duncan told Judge Singal.

Duncan said the remorse he feels is ''overwhelming,'' and he apologized to his family, friends, colleagues, law partners and to the public. He said he was prepared to accept his sentence, serve his time and move on.

Duncan also thanked the people who wrote letters to the court, and four men who spoke on Duncan's behalf at the sentencing hearing.

''I am humbled by their kindness in light of my actions,'' he said.

For the first time, Duncan's lawyer attempted to explain what motivated Duncan to begin stealing in 1997. During the years of his theft and embezzlement, Duncan was earning an average of $269,000 a year as a lawyer, and his family had assets of more than $1 million.

He clearly did not need the extra money to survive, said Toby Dilworth, a partner with McCloskey, Mina, Cunniff & Dilworth in Portland.

''His conduct was completely irrational,'' Dilworth said. ''He felt this desire to have more savings, just so it would be there.''

Duncan did not spend money on lavish trips, drugs or gambling, and he was not a target of extortion, Dilworth said. Instead, perhaps because of his perceived shortcomings as a father and husband, Duncan had a compulsion to provide greater financial security.

''There is no satisfactory, rational explanation,'' Dilworth said.

From his savings and with help from family members, Duncan has paid back the money owed to Verrill Dana and the Internal Revenue Service.

According to court documents, IRS investigators said Duncan evaded at least $97,000 in income taxes from 1999 to 2006. The counts to which he pleaded guilty covered only the tax years of 2003 through 2006, totalling $59,930 in taxes owed.

Paula Silsby, U.S. attorney for Maine, asked Judge Singal to sentence Duncan to 30 months in prison, the maximum term under federal sentencing guidelines for the case.

''I doubt that any punishment this court could impose would match the one that Mr. Duncan has already experienced,'' Silsby said. Despite that belief, Silsby said a tough sentence was necessary to deter others from similar activity. Dilworth asked for a two-year sentence.

Duncan faced two criminal prosecutions for his conduct: tax evasion at the federal level, and felony theft at the state level.

He pleaded guilty to the theft charges in Cumberland County Superior Court in June, and is scheduled to be sentenced there Sept. 18.

The state prison term likely will run concurrently to the federal sentence, which begins on Oct. 1.

Also unsettled is the question of whether other Verrill Dana partners will face professional sanctions for how they handled the matter.

Complaints against former managing partner David Warren and the members of the firm's executive board remain pending with the state Board of Bar Overseers.

In June of 2007, secretary Ellie Rommel reported that Duncan had written several checks to himself from the account of an elderly client.

Warren and other Verrill Dana leaders accepted an apology and a repayment check. They believed Duncan's story that he had taken only $77,500, and that the money was not stolen from the client but was earned money that should have been shared with all partners.

It was not until October, after Rommel gave notice of a potential lawsuit, that the firm brought in auditors. Their report showed that Duncan had indeed stolen from several clients and embezzled from the firm.

Warren remains with Verrill Dana, but he was replaced this summer by a new managing partner, Keith Jones. Rommel and the firm reached a private settlement earlier this year.

Longtime friends of Duncan expressed their hope Thursday that he can rebuild his life.

They told the judge that Duncan has been a caring husband and father, a devoted church member and an active community volunteer.

''I consider John to be one of my closest friends,'' said Toby Cook. ''There is more to this man than these deeds that brought him to this court today.

''It has been very difficult for those of us who love and admire John to watch what he's been going through. He's embarrassed, he's ashamed, he's full of remorse.''

Staff Writer Trevor Maxwell can be contacted at 791-6451 or at:

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