On August 5, 2015, the North Carolina State Bar conducted a random procedural audit of John Johnston’s trust accounts. The audit revealed several problems highlighting Johnston’s failure to maintain and document his trust account as specified in Rules of Professional Conduct 1.15-1, 1.15-2, and 1.15-3. Johnston had been previously audited in 1989 and 2003, and both revealed similar violations.
Johnston also employed a nonlawyer assistant in 2006, who later misappropriated over $10,000 from Johnston’s law firm between December 2006 and April 2007. Johnston discovered the nonlawyer’s misappropriations and neglected to fire her. Johnston then rehired the nonlawyer (who quit in 2008) in 2011, and she misappropriated approximately $57,368.15 in entrusted funds between 2011 and 2014. In doing so, Johnson failed to make reasonable efforts to endure his nonlawyer assistant’s conduct was compatible with his profession obligations violating Rule 5.3(a), and failed to supervise his nonlawyer assistant in violation of Rule 5.3(b).
As a result, the Ethics Committee suspended John Johnston for three years. However, the three year suspension is stayed for four years, as long as Johnston complies with a long list of conditions provided by the State Bar.