A Billings attorney disbarred last year for mishandling a client’s $300,000 settlement is now facing federal fraud charges from the case.
Appearing for arraignment in U.S. District Court on April 29, Randy Scott Laedeke pleaded not guilty to two charges of wire fraud.
An indictment accuses Laedeke of embezzling about $65,497 for personal expenses from a client who had received a $300,000 settlement over the death of her husband. The fraud ran for six years, from 2008 until Dec. 31, 2014, the indictment said.
Prosecutor Colin Rubich alleged that Laedeke was hired to represent the estate of “W.N.,” who was killed in a car crash in 2005, and settled the case for $300,000. The heirs included the deceased’s wife and daughter.
Laedeke, under the terms of his contract, deducted $184,599 for his fee and legal expenses, leaving $115,401 to distribute among the heirs. He dispersed $49,903 to W.N.’s wife, leaving $65,497 that should have been distributed among the other heirs, Rubich said.
Instead, Laedeke used the money for personal expenses, the prosecutor said.
Last year, the Montana Supreme Court disbarred Laedeke over his handling of the case, in which W.N. was identified as William Newberg.
Laedeke had been on an indefinite suspension since January 2015 for another complaint and had requested an additional suspension, not disbarment. The court said no.
The Supreme Court justices, in their ruling, agreed with the recommendations from the Commission on Practice, which said Laedeke’s actions “reflect blatant disregard of his obligations as an attorney, and bring disrespect to the profession as well as harm the public.”
Disbarment is not permanent in Montana. A lawyer can petition the Commission for reinstatement after five years of disbarment.
If convicted of wire fraud, Laedeke faces a maximum 20 years in prison and a $250,000 fine. U.S. Magistrate Judge Carolyn Ostby continued Laedeke’s release pending trial.
In an unrelated matter in 2005, a federal jury found that Billings police officers did not violate Laedeke’s civil rights when they used force to arrest him while responding to a fight downtown at bar closing time. Laedeke had sued the police department seeking $547,832 in damages, claiming the officers arrested him without probable cause and used excessive force in this 1999 arrest on misdemeanor charges.
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