Showing posts with label Disbarred attorney. Show all posts
Showing posts with label Disbarred attorney. Show all posts

Monday, October 3, 2016

New York Lawyer Gets Prison Time for Stealing $5 Million From Clients

New York Lawyer Gets Prison Time for Stealing $5 Million From Clients
Stuart A. Schlesinger, a disbarred lawyer
A lawyer who practiced for half a century in New York and built one of the city’s leading personal injury practices was sentenced to six and a half years in prison on Friday for stealing more than $5 million from clients.

The lawyer, Stuart A. Schlesinger, 76, misappropriated the funds from settlements he had negotiated in cases involving medical malpractice and other injuries, and then used the money to pay expenses including mortgage bills, the government had alleged.

“He converted his law license to a license to steal,” said Judge William H. Pauley III before imposing the sentence, which included an order that Mr. Schlesinger forfeit more than $5 million and pay restitution.

The proceeding was highly charged, with rows of victims observing from the spectator gallery. Some wept openly. Others made angry comments. More than a half-dozen victims addressed the judge personally, recounting the hardships Mr. Schlesinger had caused them, as well as his never-ending excuses, as one victim put it.

The victim, Margaret Last, rattled off some of Mr. Schlesinger’s excuses: “He was short-staffed. He was making sure everything was in order. He had a virus. He had problems with his back and his knee. The office was moving. He didn’t know how to work a fax machine.”

Ms. Last is still owed $660,000, her share of a settlement of a medical malpractice lawsuit that Mr. Schlesinger negotiated on her behalf, according to Christopher Cobb, a lawyer who now represents her.

Another victim, Kenneth Lawler, who is owed $900,000 from the settlement of a lawsuit alleging medical malpractice in the death of his son, said, “Every time I have to return to this matter, it brings back sad memories.”

Matthew J. Laroche, a prosecutor in the office of Preet Bharara, the United States attorney for the Southern District of New York, told the judge that Mr. Schlesinger did not care that his victims were plaintiffs who were already “suffering from life-altering injuries or the death of a loved one.

“He stole their money and lied to them and left them revictimized and broken,” Mr. Laroche said.

Murray Richman, Mr. Schlesinger’s lawyer, said his client’s actions had been reprehensible.

“I’m also angry at what he’s done to the legal community,” Mr. Richman said. “He’s made every lawyer’s word less meaningful.”

Mr. Schlesinger, who ran a firm called Julien & Schlesinger and who is now disbarred, made a rambling apology, facing the judge at times and also turning to the victims. “I know what I did,” he said. “I know the extent of what I did, and I know how terrible it is.”

He added: “I’ve lost everything that I’ve earned in 50 years. I lost my license. I lost my respect. I have terrible issues with family.”

Judge Pauley, of Federal District Court in Manhattan, observed that Mr. Schlesinger had become a prominent lawyer who was “at the apex” of the personal injury bar in New York. But the case revealed “that under the veneer of an accomplished and highly respected attorney, Mr. Schlesinger was really a predator — his conduct was long running and devastating to the individuals he victimized,” the judge said.

He also noted that Mr. Schlesinger had amassed a fortune in real estate, selling an elegant brownstone on the Upper East Side of Manhattan for more than $20 million about a decade ago, and earlier buying a property on Quogue, on Long Island, that is appraised for more than $11 million.

The Quogue property, which according to real estate listings is an eight-bedroom house on five and a half acres, with a pool and a hot tub overlooking the ocean, is for sale, currently priced at $10 million.

The judge also suggested that Mr. Schlesinger had been hiding assets, noting he had not disclosed that he had borrowed more than $2 million against the Quogue property. He said that Mr. Schlesinger had also “apparently been busy selling personal property, including artworks,” and after selling some, he had deposited more than $65,000 in his wife’s account.

Judge Pauley said the court’s probation department reported that bank statements reflected other significant deposits for which the sources were unknown.

“So it really seems, Mr. Schlesinger, that the fraudulent conduct continues,” the judge said.

Full Article & Source:
New York Lawyer Gets Prison Time for Stealing $5 Million From Clients

Tuesday, April 19, 2016

Disbarred KC lawyer pleads guilty in $1.2 million theft from St. Luke’s Health System

Editor's note:  This Shark watches lawyers stealing from wards in the Probate Court of Cook County yet the IARDC does nothing to stop them.  Lucius Verenus, Schoolmaster, ProbateSharks.com


Disbarred KC lawyer pleads guilty in $1.2 million theft from St. Luke’s Health System
Alan B. Gallas pleaded guilty in federal court
His firm served as a collection agency for patients who were behind on payments to the hospital system

Thursday, October 15, 2015

Petoskey lawyer took trips, fixed his cottage with pilfered funds

Editor's note: This Shark observed Alice R. Gore's GAL feathering his Malibu beach house with Alice's estate. No cottages for Cook County probate lawyers.  Lucius Verenus, Schoolmaster, ProbateSharks.com

 

Petoskey lawyer took trips, fixed his cottage with pilfered funds

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GRAND RAPIDS, Mich. (WZZM) -- A disbarred attorney from Petoskey accused of financing lavish vacations and home repairs with an elderly client's money is facing new charges of mail fraud and tax evasion.
Michael Aho Kennedy, 67, was indicted Thursday on federal charges linked to the disappearance of an estimated $1.2 million from a long-time family friend and client, who died in August from Alzheimer's disease.
Kennedy used the money to buy a horse, fix his cottage, pay college tuition bills and to finance family vacations to Madrid, Turkey and Tahiti, the federal indictment alleges. He's also accused of using the woman's money to pay his taxes.
Kennedy already faces up to 20 years in prison on state charges of embezzlement from a vulnerable adult. He was arraigned in a Petoskey courtroom on Monday.
The federal indictment sheds more light on the scope of the alleged financial crimes against Virginia R. Weber, a longtime friend of the Kennedy family who appointed him trustee of her trust account in July, 2006.
At the time, Weber's savings and investments had a value of nearly $1 million, federal court records show.
Kennedy regularly withdrew money from the widowed woman's bank accounts and paid her monthly bills, but also channeled money to a separate business account for his law practice, the government says.
Kennedy mailed Weber five account statements between Nov. 2010 and March, 2012 showing a trust balance that averaged slightly more than $1 million, even though Bank of Northern Michigan statements showed the account was empty, federal documents show.
In addition to mail fraud, Kennedy is charged with understating his adjusted gross income by an average of $292,600 over a three-year period, court records show.
His made an average of about $47,600 over the three-year period, but the undeclared balance "was actually money that he embezzled from the trust,'' the indictment alleges.
The government has launched forfeiture proceedings against Kennedy's home on Hill Crest Drive in Petoskey and is seeking $1.2 million, less whatever proceeds it gets for the house.
The Internal Revenue Service contacted the woman's family in 2012 regarding investments Kennedy had selected for her living trust. Investigators believe the embezzlement dated to 2006 but state charges were limited by the statute of limitations.
Kennedy was disbarred last March. He was arraigned Monday in Emmet County District Court on charges including one count of embezzlement from a vulnerable adult of over $100,000 and one count of embezzlement by a trustee of over $100,000, both 20-year felonies. Kennedy's bond was set at $100,000 cash.

Saturday, April 25, 2015

Disbarred East Valley attorney sentenced to prison in probate theft case

Editor's note: Your ProbateShark would love to see the thieving Probate Court of Cook County attorneys, "sentenced to prison in probate theft case", but alas, they are protected by the corrupt legal system.  Lucius Verenus, Schoolmaster, ProbateSharks.com

 

Disbarred East Valley attorney sentenced to prison in probate theft case

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A disbarred East Valley attorney accused of stealing money from his deceased clients probate accounts has been sentenced to 2 1/2 years in prison after his conviction on theft and fraud charges.
While sentencing Rodney Matheson, 70, on Friday, Maricopa County Superior Court Judge Bruce R. Cohen also ordered that Matheson repay more than $1 million to an attorney representing the Mayo Clinic, and ordered him to "not engage in any service or assistance in or related legal services for any purpose whatsoever.''
Cohen also placed Matheson on probation on a fraudulent schemes and artifaces conviction for seven years, a term that begins when he is released from prison.
Prosecutors accused Matheson of orchestrating an elaborate shell game by taking money from two estates to satisfy a court order for payment of $800,000 to the Mayo Clinic, the major beneficiary of a third estate, according to court documents.
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The theft occurred between November 2005 and August 2013, while the fraud occurred between March and August of 2013, according to court documents. Matheson pleaded guilty in November 2014 to the theft and fraud charges in return for three other counts being dropped, according to his plea agreement.
Matheson, of Queen Creek, was disbarred in September 2013 after an investigation by the State Bar of Arizona and arrested by Gilbert police in February 2014.
At that time, he was charged with two counts of fraudulent schemes and two counts of theft, with investigators accusing him of misappropriating as much as $6 million.
Matheson also was accused of stealing $1.2 million from the estate of Dorothy Thomas, whose estate stipulated that the money be turned over to the University of Arizona Foundation for cancer research in memory of her late husband, David, according to court records related to the civil case. Documents said the foundation never received the money.
The case against Matheson started to emerge when Mayo Clinic filed a civil suit to collect $1.2million left to the hospital as a beneficiary by the Mary Jane Schalow Trust. Judges were not satisfied with Matheson's answers when they demanded to know what happened to the money.
A Gilbert attorney who traced the misappropriations while examining the probate accounts eventually was ordered to turn over the evidence to the State Bar and to the Gilbert police, leading to Matheson's disbarment and eventually to his arrest.

Monday, May 5, 2014

Disbarred attorney accused of stealing from probate clients

Disbarred attorney accused of stealing from probate clients

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Eleanor "Dorothy'' Thomas of Tempe lived a good, long life as a minister's wife. She taught high-school English, helped others, loved dogs and always was ready to debate politics until she died last summer at age 94.
But court records and Thomas' confidants point to one major mistake she might have made in her life — hiring Rodney M. Matheson, a now-disbarred Queen Creek probate attorney, to handle her estate.
About $1.2 million of Thomas' estate was supposed to go to a University of Arizona cancer research fund in memory of Dorothy and her late husband, David. But the money never was paid to the ­University of Arizona Foundation, according to court records.
Matheson, 69, was disbarred in September 2013 and arrested by Gilbert police in February. He is charged with two counts of fraudulent schemes and two counts of theft, with investigators accusing him of misappropriating as much as $6 million.
Prosecutors accused Matheson of orchestrating an elaborate shell game by taking money from two estates to satisfy a court order for payment of $800,000 to the Mayo Clinic, the major beneficiary of a third estate, according to court documents.
Lawyers are fighting in the courts for repayment of funds to the proper beneficiaries, if the money can be located. And Lee Stein, Matheson's new criminal attorney, has received more time to evaluate the complicated case and challenge his indictment.
Stein said it would be inappropriate to comment while a criminal case is pending.
Bonnie Rabin of Tucson said Thomas recommended Matheson to all her friends at Friendship ­Village, an upscale retirement community in Tempe.
"She was so thrilled with him. She said, 'He doesn't even charge me,' " Rabin said.
But Thomas and other clients could not have envisioned the ­misconduct Matheson is accused of committing while handling their trusts.
A Gilbert police detective estimated that as much as $6 million was stolen from three trusts and beneficiaries of deceased people. Attorneys working on the case unraveled the alleged thefts by subpoenaing an escrow account that probate lawyers use in administering estates and by combing through financial records, according to court documents. But even they concede that no one knows for certain how much money might have been misappropriated.
Matheson has been released on a $1 million bond and has a trial date set in October.
The case against Matheson started to emerge when Mayo Clinic filed a civil suit to collect $1.2 million left to the hospital as a beneficiary by the Mary Jane Schalow Trust. Maricopa County Superior Court Commissioner Rick Nothwehr started asking questions, as did Judge Andrew Klein, who took over the case.
Court records say Nothwehr and Klein were not satisfied with Matheson's answers on how he administered the trust. Klein eventually instructed Clare Black, a Gilbert attorney who discovered the reported misappropriations after she subpoenaed Matheson's financial records, to file a State Bar of Arizona complaint against Matheson, in addition to filing a police ­report, according to records.
At one point, Nothwehr ordered Matheson to make an $800,000 payment from the Schalow Trust to the Mayo Clinic, according to court documents.
The state Bar investigation found that more than $1 million had been depleted from the Schalow Trust by Matheson, Arizona Assistant Attorney General Joseph Waters wrote in court documents.
Wells Fargo bank records show "the defendant wrote himself checks totaling $988,231.40 as fees for work he claimed to complete for his various clients," even though an audit found he should not have received most of the fees, Waters wrote.
Matheson was acting as an attorney for St. Paul, Minn., resident Roger Manthey in late 2007 or early 2008 when Matheson told Manthey that administration of the trust was virtually complete, ­according to records.
But Manthey ended up as the initial target of Mayo's efforts to collect the money and Nothwehr issued a fiduciary warrant for his arrest at one point. Manthey wrote in court records that he had no idea that Mayo never received the money from his aunt's estate —or that he had been sued— because Matheson never informed him.
Manthey declined comment, citing the criminal case against Matheson, but he made his feelings clear in court records that are ­included in the probate case.
"This whole experience has been very troublesome to me," Manthey wrote. "I am unable to sleep, and I have a constant knot in my stomach. I am a well-respected, retired school teacher who has always tried to do the right thing."
When a court commissioner ­ordered Matheson to verify that Manthey was the source of a $500,000 payment to the Mayo ­clinic, Matheson produced a letter from Manthey as affirmation, but Manthey had no idea what was ­going on in Arizona, according to records.
"Mr. Matheson went as far to create a false letter from Mr. Manthey that he placed in his file that was allegedly provided with the $500,000 payment," Black wrote in the Bar complaint.
Instead, Matheson used funds from the Loehndorf Trust, another estate he administered, to make a $500,000 payment to the Mayo Clinic, according to Waters' court document. Suspicious about the source of the money, Mayo Clinic eventually turned over the funds to Superior Court for safekeeping, according to court documents. A spokesman for the Mayo Clinic ­declined to comment.
The courts are now attempting to sort out where all the money went and to return it to the rightful owners. On March 12, Klein ordered $337,500 that was misappropriated from the Loehndorf Trust returned to its owners.
The criminal charges against Matheson are unrelated to the Thomas Trust, which was left to the cancer research fund. Tucson attorney Lindsay Brew, who represents the University of Arizona Foundation, wrote in court documents that Matheson also misappropriated $1.2 million from the Thomas Trust to pay off his debts from the depleted Schalow Trust to Mayo Clinic.
Brew wrote in court records that he is seeking repayment of $162,500 that he says was misappropriated from the Thomas Trust. Brew also is arguing that Matheson filed a bogus addendum to Thomas' will shortly before her death, cutting out the University of Arizona and naming Matheson as beneficiary.
Tom Asimou, a probate attorney not involved in the Matheson matter, said he has seen similar cases every few years and his advice is simple:
■ If you don't think your attorney is giving a straight answer, get another attorney to take the matter before a judge
■ Name a bank as either trustee or personal representative of the trust
■ The bank will charge a fee but it also provides protection against stolen funds
"People get penny-wise and pound foolish with these things," Asimou said.