“These professional advisers, charged with duties of loyalty and good faith, should have served as a firewall to shield the District from Thomas’ corruption. Instead, they abandoned their fiduciary duties in exchange for access to millions of dollars in public funds for their personal gain, all at the expense of the District and the taxpayers of Berkeley County.”
A lawsuit against Defendants Burr & Forman, LLP f/k/a McNair Law Firm, PA (“Burr & Forman”) and the former Chief Financial Officer of the Berkeley County School District, Brantely Thomas, was filed yesterday.
The lawsuit reads:
During his tenure as the Chief Financial Officer of the Berkeley County School District (“BCSD” or the “District”), defendant Brantley Thomas (“Thomas”) used his official position to enrich himself and others at the expense of the District. Over a period of many years, he engaged in a pervasive scheme of corruption, in which he embezzled and misappropriated District funds, demanded and accepted multiple illegal kickbacks, and exposed the District to exorbitant fees and losses that have cost the taxpayers of Berkeley County millions of dollars. Thomas successfully concealed his illegal activities from the District for years, and it was not until February of 2017, when the FBI met with District officials to inform them that Thomas was under investigation, that they came to light.
A South Carolina grand jury handed down a Superseding Indictment for Embezzlement (Ten Counts) in violation of S.C. Code Ann. § 16-13-210, and Forgery (One Count) in violation of S.C. Code Ann. § 16-13-10, against Thomas on October 17, 2017. On November 15, 2017, a South Carolina grand jury handed down a four-count Indictment charging Thomas with embezzlement in ELECTRONICALLY FILED – 2019 Mar 06 9:11 AM – BERKELEY – COMMON PLEAS – CASE#2019CP0800548 violation of S.C. Code Ann. § 16-13-210.
On June 28, 2018, a South Carolina grand jury handed down another indictment against Thomas, including thirteen counts of embezzlement in violation of S.C. Code Ann. § 16-13-10 and one count of forgery in violation of S.C. Code Ann. § 16-13-10.
On December 7, 2017, the United States Attorney for the District of South Carolina issued an Information in which it charged Thomas with ten counts of Wire Fraud in violation of 18 U.S.C. §§ 1343 and 1346.
Thomas has entered pleas of guilty to all of the federal charges against him. Many of the charges against Thomas arose out of his dealings with his co-defendants herein.
Of course, Thomas could not accomplish, and successfully conceal, such an elaborate scheme of corruption alone. As Judge Sporkin famously asked during the Savings and Loan Crisis of the 1980s, “where were the professionals [accountants and lawyers] . . . when these clearly improper
transactions were being consummated? Why didn’t any of them speak up or disassociate themselves from the transactions?” Lincoln Sav. & Loan Ass’n. v. Wall, 743 F. Supp. 901, 920 (D.D.C. 1990).
Here, the question is “where were the District’s financial advisors and legal counsel?” The answer is that they were actively and closely associated with Thomas and benefitted from recurring and lucrative business and fees.
These professionals knew that Thomas commingled revenues and accounts, which were required to be segregated under both general accounting principles and debt limit requirements of the South Carolina Constitution.
The confusion and commingling disallowed any oversight by the School Board, which allowed Thomas unfettered discretion to engage in his corrupt activities.
These professional advisers, charged with duties of loyalty and good faith, should have served as a firewall to shield the District from Thomas’ corruption. Instead, they abandoned their fiduciary duties in exchange for access to millions of dollars in public funds for their personal gain, all at the expense of the District and the taxpayers of Berkeley County.
Through this action, the District seeks compensatory, treble, and punitive damages for the tortious activities of these fiduciaries and Thomas.