New Jersey Attorney General Matthew Platkin announced Wednesday that John Dunlea pleaded guilty to charges of theft by deception (second degree – two counts) and failure to pay taxes (third degree – five counts).

Dunlea, 61, of Westfield, is the former chief financial officer of McElroy, Deutsch, Mulvaney, & Carpenter LLP, a New Jersey-headquartered national law firm.

In February, prosecutors charged him with embezzling more than $1.5 million from the firm and evading payment of state income tax.

Dunlea pleaded guilty to the seven counts before New Jersey Superior Court Judge Stephen Taylor in Morris County May 8, admitting to:

• Misappropriating $1.54 million from the law firm – including $1.18 million in unauthorized excess compensation and $355,256 in personal credit card charges for airline flights, hotels and restaurants that he misled the firm into paying
• Evading $22,568 in state income tax for tax years 2018-2022 for income derived from the credit card scheme

Under the plea agreement, the state will recommend that Dunlea is sentenced to five years in state prison and required to pay restitution to McElroy Deutsch law firm and the state Division of Taxation.

‘A strong message’

“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,” said Platkin. “Individuals who exploit positions of trust to commit financial fraud will be held accountable.”

“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,” said Pablo Quinones, legal chief of the Office of Securities Fraud and Financial Crimes Prosecutions, which oversaw the investigation along with the New Jersey Division of Taxation – Office of Criminal Investigations.

“Today is a difficult day for Mr. Dunlea, a highly successful professional and caring family man, who made a terrible decision that he regrets and for which he will pay for the rest of his life,” Ricardo Solano Jr., director and co-chair of the White Collar & Investigations Group for Gibbons PC, who is representing Dunlea, told NJBIZ in a statement. “Mr. Dunlea has always been willing to accept responsibility for his actions when he is wrong, and today is no different. His goal is to serve his punishment, move past this, and hopefully rebuild his personal and professional life.”

Sentencing is scheduled for June 14, 2024.