Ex-Crowell & Moring Lawyer Pleads Guilty to Client Theft

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Ex-Crowell & Moring Lawyer Pleads Guilty to Client Theft


By Andrew KeshnerContactAll Articles



New York Law Journal

October 2, 2012



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A former Crowell & Moring associate who fled to Hong Kong to avoid arrest and had to be extradited has admitted embezzling $10.7 million dollars from clients over a two-year period.



Douglas Arntsen, 34, pleaded guilty Tuesday before Acting Manhattan Supreme Court Justice Jill Konviser (See Profile) in connection to the theft from an investment fund and a real estate management company he advised.



In exchange for a sentence of 4-to-12 years, Arntsen pleaded guilty to three counts of first-degree grand larceny, a B felony, and one count of first-degree scheme to defraud, an E felony. He also agreed to a restitution order for the $10.7 million, which he used to make loans and investments, but also on sporting events, strip clubs, meals at restaurants and the purchase of businesses for friends, family and himself including a laundromat and cookie and potato chip distributorships. Read the arrest warrant.



Arntsen, who has been incarcerated since his extradition in January, has returned just over $151,000, according to court papers filed by prosecutors, who urged a five- to 15-year sentence. Sentencing is scheduled for Oct. 17.



"The trust between attorney and client is sacred. This defendant utterly betrayed that trust by stealing large amounts of money from his clients before fleeing to Hong Kong. Today's conviction holds him accountable for fraudulent conduct that violated the law, abused his clients' trust, and cost them millions of dollars," Manhattan District Attorney Cyrus Vance, Jr. said in a statement.



Arntsen answered, "Yes, your honor" over and over as Konviser questioned him about whether he had committed the crime to which he was pleading guilty and whether he was pleading guilty of his own free will. Arntsen did not elaborate.



His attorney, Alan Lewis of Carter Ledyard & Milburn, told reporters outside the courtroom that his client "always indicated his intent to resolve the case and put it behind him."



As an associate at Crowell & Moring's New York office, Arntsen represented Doina Capital, a closely held corporation and investment fund, and Regal Real Estate, a closely held real estate management company.



Arnsten drafted Doina's incorporation as a limited liability company, naming himself as "vice president" and "secretary," prosecutors said in court papers.
KawamotoDragon.com



In a July 31 letter to the court, Arntsen said he was asked to be "directly involved in the making of investment/loan decisions" but that was disputed in a witness impact statement by Doina principal, Dr. Adrian Alexandru, a 73-year-old veterinarian and Roumanian immigrant.

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