Former CFO of Morris County law firm pleads guilty to defrauding firm of more than $1.5M and tax evasion
TRENTON, NJ — Attorney General Matthew J. Platkin and the Division of Criminal Justice (DCJ) Wednesday announced that John Dunlea, former Chief Financial Officer of McElroy, Deutsch, Mulvaney & Carpenter, LLP, a national law firm based in Morristown, pleaded guilty to embezzling more than $1.5 million from the firm and evading payment of income tax owed to New Jersey.
The charges are the result of an investigation by DCJ’s Office of Securities Fraud and Financial Crimes Prosecutions and the New Jersey Division of Taxation-Office of Criminal Investigations.
Dunlea, 61, of Westfield pleaded guilty on May 8 to two counts of second-degree theft by deception and five counts of third-degree failure to pay taxes before New Jersey Superior Court Judge Stephen J. Taylor in Morris County.
In pleading guilty, Dunlea admitted to misappropriating $1,538,221 from the law firm by paying himself unauthorized excess compensation. Between January 2017 and December 2022, he paid himself unauthorized compensation in the amount of $1,182,965, and misled the firm into paying his personal credit card charges for international and domestic airline flights, hotels, and restaurant outings for himself and his family, totaling approximately $355,256.
Dunlea also admitted to evading the payment of income tax totaling $22,568 to the State for the tax years 2018 through 2022, for income derived from the credit card scheme.
Under the plea agreement, the State will recommend that Dunlea be sentenced to five years in state prison and required to pay restitution to the McElroy Law Firm and the State of New Jersey, Division of Taxation.
Sentencing is scheduled for June 14. The sentencing judge is solely responsible for determining the sentence to impose on the defendant.
“The defendant in this case has admitted giving himself a staggering, unauthorized, and illegal seven-figure pay raise, and treating himself and his family, at his employer’s expense, to travel, hotels, and dining out, without his employer’s consent,” Platkin said. “Individuals who exploit positions of trust to commit financial fraud will be held accountable.”
“Dunlea has now admitted in court to tax evasion and to stealing more than $1.5 million from a national law firm, where he served as a trusted, high-level executive for several years,” said Legal Chief Pablo Quiñones of the Office of Securities Fraud and Financial Crimes Prosecutions. “His guilty plea should send a strong message to white-collar fraudsters that this Office will diligently investigate and prosecute substantial financial fraud and those who break the law will be held to account for their crimes.”
