Web CPAblog reports:
"Boston Firm Faces Malpractice Suit
Boston (Feb. 23, 2007) – Vitale Caturano & Co. is facing a malpractice lawsuit for allegedly failing to properly investigate a number of red flags that could have tipped a prominent New England family off to the looting of some $57 million from its trust funds. Advertisement
The Ayer Family Trusts holds several hundred million dollars for about 100 descendents of industrialist Frederick Ayer. Those trusts are managed under the Tenens Corp. (which does business as Essex Street Associates), and had been largely overseen by the corporation’s former chief operating office, and an employee of more than 30 years, John Doorly.
According to other court documents, Doorly engaged in the “systematic looting” of $57 million from the trust funds, much of it through the use of duplicate accounts — spending freely on his wife, son, his mistresses; investing in shopping malls, car dealerships and sports marketing companies; and expensing amenities such as planes, limos, vacation homes and exotic golf trips.
Doorly was fired from the position in March 2006, but the Ayer family’s suit against Vitale Caturano claims that the Boston-based firm should have acted more quickly to investigate Doorly’s secrecy regarding a number of trusts, and notes that the funds suffered losses of more than $10 million during Vitale Caturano’s time as auditor.
According to the Boston Herald, in deposition filings Doorly has acknowledged that while he transferred Tenens funds to various accounts, they were merely loans that he intended to repay. "