Tuesday, January 6, 2015
Today an attorney was sentenced to sixteen months in prison for siphoning $262,000 from the estate of a disabled Army veteran.
Cuyahoga County Common Pleas Judge Timothy McCormick sentenced Kevin Purcell, 62, after hearing how the attorney stole the money from the estate of John Kane, who suffered from schizophrenia. “There is a special place in hell waiting for attorneys who steal from the defenseless,” said an assistant Cuyahoga County prosecutor.
Purcell served as a guardian for Kane since 1993 and administrator of his estate after he died in 2012. Last month, he pleaded guilty to aggravated theft and agreed to never practice law again. He also was ordered to pay restitution to Kane’s estate.
See John Caniglia, Lawyer Gets 16 Months in Prison for Fleecing the Estate of a Disabled Army Vet, Cleveland.com, Jan. 6, 2015.
Monday, December 29, 2014
Hired to oversee the estates of deceased loved ones, Robert DePalma, 53, is now accused of stealing $700,000 by Queens County District Attorney Richard A. Brown.
DePalma, who has a law office in St. George and is a former prosecutor at the Staten Island District Attorney’s Office, was charged with second-degree grand larceny and first-degree scheme to defraud during his arraignment in criminal court.
According to the charges, one of DePalma’s clients sold a home for $274,00 but never saw the proceeds. Another client was scammed out of $150,000 following the sale of their deceased mother’s Staten Island property. DePalma also told another client that proceeds from a real estate sale was being held in escrow, when in reality it was deposited into his bank account.
“The defendant is accused of breaching his fiduciary duty and unjustly enriching himself at the expense of his clients. Such allegations cannot go unpunished.” If convicted, DePalma faces up to fifteen years in prison.
See Mira Wassef, Staten Island Attorney Accused of Embezzling $700,000 From His Clients, SI Live, Dec. 26, 2014.
Wednesday, October 29, 2014
Whitney Ball plays a large role in the conservative movement. She controls DonorsTrust, a fund that has distributed more than $400 million to underwrite right-wing operations such as the National Rifle Association, the Heritage Foundation, and Americans for Prosperity.
Ball set up this fund fifteen years ago to act as a cashbox for wealthy conservatives who wanted to be sure their money would be used for conservative causes after they die. The priority of DonorsTrust is to “safeguard donor intent.”
A few years ago, Ball became involved in an estate controversy when her father, a lawyer in Virginia, unethically handled the wills of three elderly people and Whitney Ball and her brother personally benefitted from his misconduct, with almost half a million dollars deposited into their bank accounts.
According to the West Virginia Supreme Court of Appeals, which conducted a disciplinary proceeding regarding this matter, John Ball prepared wills for two octogenarian sisters. The court ruled that the “evidence in this case clearly established that Mr. Ball drafted three wills in which he gave himself excessive fees as an executor, drafted two wills that improperly conveyed property to himself and his wife, and assisted in changing a client's annuity to benefit" his children.
The court noted that Ball’s conduct was intentional and violated the rules of professional conduct. Ball’s misconduct resulted in him receiving millions of dollars. The court annulled Ball’s law license and ordered he pay restitution of nearly $3 million to the three estates. This amount included the money that went to his children.
While Whitney Ball and her brother were not accused of wrongdoing or misconduct, the court acknowledged they did receive hundreds of thousands of dollars that had been transferred to them due to the unethical action of their father.
See David Corn, How a Top Conservative Strategist Ended Up With More Than $200,000 in Shady Money, Mother Jones, Oct. 27, 2014.
Tuesday, October 21, 2014
An Austin lawyer and her firm have been sued by fifteen family members, alleging she failed to hire a handwriting expert to show their deceased matriarch’s will was forged and they should have received more from the estate.
The lawyer representing the plaintiffs, William Robertson, commented, “My clients disputed it from day one. The allegation against the lawyer in this case is that there should have been a careful expert examination of the handwriting. That was not done.”
The October 10 original petition and request for disclosure said the plaintiffs hired Holly Gilman and her firm to contest the handwritten will of decedent Carolina Torres. A woman named Lisa Navarro offered the will for probate. Gilman contested the will, arguing it “was fabricated and provided that Lisa Navarro was to receive the largest portion of the assets of the estate of Carolina A. Torres.” At the will contest hearing, no expert testimony was provided, rather writing samples were utilized.
The court ruled against the plaintiffs and found the will to be valid. The plaintiffs subsequently hired a new lawyer and continued to probate the case. The court then made a final ruling and distributed assets in accordance with the will. However, Robertson noted that the “distribution in the will was real lopsided.”
After a handwriting expert was hired, the plaintiffs became aware that the holographic will of Carolina A. Torres was forgery and that Lisa Navarro had perpetrated fraud. The plaintiffs are now suing for negligence, gross negligence and breach of contract.
See Angela Morris, Handling of Handwritten Will Lands Lawyer In Legal-Mal Lawsuit, Texas Lawyer, Oct. 17, 2014.
Wednesday, September 10, 2014
On Monday, Judge Paul Gardephe handed down one of the longest prison sentences for insider trading. Mathew Martoma, the portfolio manager who worked for an affiliate of Steve Cohen’s SAC Capital Advisors hedge fund firm, was found guilty of obtaining material non-public information about the development of an Alzheimer’s drug from a doctor and trading the information to make more than $200 million in profits. The judge sentenced Martoma to nine years and ordered that he pay back the $9 million he received in bonuses for himself.
The evidence accrued against Martoma was large, including the testimony of an 81-year-old doctor. Although some lawyers and reporters were baffled by Martoma’s decision not to settle the case, some suggest his ability to obtain a good settlement was hindered after it was discovered he had been expelled from Harvard Law School for doctoring his transcript to make up better grades.
See Nathan Vardi, Mathew Martoma Sentenced to Nine Years For Insider Trading, Forbes, Sept. 8, 2014.
Friday, August 15, 2014
As I have previously discussed, financial abuse of elders has been deemed “the crime of the 21st Century.” On Thursday, a Fairfax County attorney was sentenced to six years in prison for embezzling nearly $500,000 while he was entrusted to care for an elderly woman and her estate.
James Kincheloe, 67, was convicted of a single count of embezzlement in which he entered an Alford plea (he did not admit guilt but acknowledged prosecutors had enough evidence for conviction). Judge Jane M. Roush ruled that Kincheloe must repay more than $483,000 to the estate of Pearl Buckley, a Fairfax City resident who passed away in 2009.
Prior to Ms. Buckley’s death, Kincheloe entered into an agreement with her to manage her personal affairs at a rate of more than $9,700 a month, which is three times Ms. Buckley’s income.
See Justin Jouvenal, Attorney James Kincheloe Jr. Gets Six Years for Embezzling from Elderly Woman, The Washington Post, Aug. 14, 2014.
Friday, June 27, 2014
Paul Daugerdas, a former partner at the defunct law firm Jenkens & Gilchrist, has been sentenced to fifteen years in prison in what prosecutors are calling the largest criminal tax fraud in U.S. history.
Daugerdas, who once ran the law firm’s Chicago office, was found guilty by a New York federal jury on charges including conspiracy, tax evasion and mail fraud. It is alleged that Daugerdas obtained $95 million dollars from a scheme which involved fraudulent tax deductions or benefits exceeding $7 billion and $1.63 billion lost in U.S. tax revenue. Prosecutors say Daugerdas devised and supervised the promotion of fraudulent tax shelters over almost two decades.
U.S. district judge William Pauley ordered Daugerdas to forfeit $164.7 million and pay $371 million in restitution jointly with other co-conspirators. The judge described him as being at “the apex of tax shelter racketeers.”
See Reuters, Former Law Firm Partner Gets 15 Years Prison for Record US Tax Fraud Scheme, The Guardian, June 25, 2014.
Jamal and Leda Khoury thought they were investing their life savings wisely when they transferred $2.3 million into their attorney’s escrow account to buy commercial real estate property three years ago. Yet within hours of the cash transfer, their attorney, Kathleen Niew, was stealing from the supposedly secure account to invest in her own scheme.
Over the course of several weeks, Niew wired millions of dollars to mining investors in places such as Singapore, expecting to make huge profits for herself. The mining companies failed miserably and Niew never earned a dime. By the time the Khoury’s realized something was wrong, their retirement was completely gone.
On Wednesday the couple watched as Niew pled guilty to ten counts of fraud. Under federal sentencing guidelines, Niew faces up to eleven years in prison, but the judge is free to sentence her whatever he deems appropriate.
See Jason Meisner, Former Attorney, Radio Host Pleads Guilty in $2.3 Million Fraud, Chicago Tribune, June 25, 2014.
As I have previously discussed, Tennessee attorney John E. Clemmons is serving a prison term after admitting to stealing $1.3 million from conservatorship clients. Now, Paul Gontarek, the victim’s court-appointed attorney, is suing the Metro government claiming that the probate master negligently failed to monitor the reports filed, and not filed, by Clemmons. The government is claiming immunity from the claims and asking for dismissal of the case. The family of one of the victim’s is calling for criminal charges to be brought, claiming that they believe the failures by the probate court was not negligent, but criminal in nature.
See Walter F. Roche Jr., Metro Sued in Probate Court Scandal, The Tennessean, June 19, 2014.
Special thanks to Brian Cohan (Attorney at Law, Law Offices of Brian J. Cohan, P.C.) for bringing this article to my attention.
Friday, May 23, 2014
Former Robeson County Attorney Hal Kinlaw has been linked with forging two wills. Judge Mary Ann Tally, in Robeson County Superior Court, ruled in favor of petitions submitted by Jessie McFadyen Tolar, who requested that the wills of her mother, Louise McFadyen, and father, Robert McFadyen, be “removed and set aside” and authentic wills be put in their place.
According to the petitions, Kinlaw would not have received anything of value in either of the forged wills. Kinlaw resigned as Robeson County attorney in June 2013 after it became public that he is being sued by BB&T for almost $18 million in unpaid loans. He had been the county’s attorney for more than 20 years. Although he has officially resigned his position, County Manager Ricky Harris confirmed that Kinlaw is still on the county payroll, receiving a monthly stipend of $5,000.
See Bob Shiles, Ex-Attorney For County Linked With Forged Wills, Robesonian.com, May 21, 2014.