Las Vegas Based Accounting Firm Sued For Alleged Accounting Malpractice in the Bankruptcy Case of Callister & Associates, LLC
August 2, 2021, District of Nevada – Plaintiff Trustee Robert Atkinson for the bankruptcy estate of Debtor Callister & Associates, LLC brings a lawsuit against Defendant Swan & Gardner, LLC to recover about $6,000,000 in damages arising from its “accounting malpractice”.
Defendant prepared Debtor’s tax returns. Allegedly, Defendant “breached its duties of professional competence” to Debtor by “failing to comply with GAAP” (and/or other relevant accounting standards and practices) in performing accounting services to Debtor. The Trustee alleges that Debtor’s office manager was involved in “embezzlement” by converting client funds in the Debtor’s trust account to fund Debtor’s operations. The Trustee further argued that since Defendant’s tax partner was cousin of Debtor’s office manager’s wife, she did not have a typical arms-length client relationship with Debtor while performing accounting services for Debtor. That relationship allegedly affected her overall evaluation and approval of Debtor’s tax returns, and her professional judgment was skewed.
Thus, the Trustee alleges that the Defendant “breached its duties of professional competence” to Debtor in preparing Debtor’s tax returns by “incorporating illegal activities” (theft) as part of its revenues and liabilities. The Trustee also accuses Defendant of “breaching its duties of professional competence” to Debtor by “failing to abide by its ethical responsibilities” to alert Debtor’s principal, about the issue, and recommending that he engage the services of an attorney (to both assist the tax issue and also the potential for embezzlement).