Case 1-5 Moral Turpitude

Ed has a growing CPA practice. He worked in New York after graduation, but has since returned home to Orlando to be closer to his family. Ed has been married to Kristina, the girl of his dreams, for five years and they have two children.

Ed is catching up on work after the family vacation to Walt Disney World. Just a quick call to his wife and then off to see his client Ella at Spa Day. Ella is his wifes long-time friend and has become a big client of Eds firm for both consulting and tax services. Ella has expanded to three locations in Orlando and is considering a new location in Tampa.

Ed arrives early for the meeting. Ella comes out and greets him.

Ella:

Ed, you look rested. I hope your family enjoyed the Disney vacation. [Ed nodded his head]. I am expecting a call from the leasing agent for the Tampa location. I need to delay our meeting about 30 minutes. While you wait, you can enjoy a shoulder massage by Carrie, courtesy of the spa.

Ed:

That sounds nice. Kristina will be jealous that that I am getting a massage. I could use some relaxation after three days on rides and trekking through the park. But, if todays inconvenient for you I can come back another day.

Ella:

No, no. I must move quickly on the new location and need to consult with you on some tax questions.

Ed:

Okay, but I need to make the soccer game at 4:30. This is the first time the girls are facing each other in a game. Frankly, I dont know who to root for. Kristina said shell root for one and Ill root for the other.

Ella:

Very diplomatic. I like it. Anyway, Ill be done in 30 minutes and well have plenty of time to talk before you go to the game.

Carrie came out and led Ed to the massage room. As Ed is enjoying the massage, a commotion is heard in the hallway. All of a sudden, another masseuse comes in and screams, Police! Next thing Ed knows, the door is slammed open and a policeman and police woman shout: Youre all under arrest! Ed is startled. He begins to talk with trepidation.

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Ed:

What for? I am a CPA here for a meeting with my client, Ella.

Police:

This location is a front for prostitution and money laundering. All customers will be taken to the station and charged with criminal mischief.

At the station, there was total chaos. The customers and the employees were milling around, not knowing what to do. Ella was nowhere to be seen. After a phone call to his wife and attorney, Ed is told that he will be booked, arraigned, and then released on his own recognizance.

By the time the dust settled, Ed missed the game. His wife came to pick him up. The girls were in tears.

Ed felt confident that no charges would be brought against him and the whole matter was one big misunderstanding. It was a case of being in the wrong place at the wrong time. Unfortunately, Ella could not be found to vouch for him that he was only at the spa for a business meeting.

In the end and after a six month wait, Ed was convinced by his attorney to plead out and put the matter behind him. The district attorney agreed to a sentence of one-year probation and community service.

Just as Ed was starting to breathe more easily, a letter comes from the Florida Board of Accountancy telling him there will be a hearing to decide whether to suspend his license to practice public accounting. The hearing will be in front of the Disciplinary Committee of the board in two weeks. Ed contacts his attorney and they prepare for the hearing.

The hearing does not go well. The committee questions how Ed did not know that Spa Day was a front for a prostitution ring and money laundering. Ed is told that even if he had not pled out, he has violated the acts discreditable and moral turpitude clauses of the code of professional conduct.

Questions Did Ed commit an act discreditable to the profession? Explain.

Does the case have any bearing on Eds ability to provide competent services to his client and serve the public interest? Why or why not?

What should Eds attorney say in defense of his client?

Should state board of accountancy rules regulate personal behavior not related to ones professional services?