Monday, November 5, 2018

A 14-Year Interim Suspension Ends In Disbarment

An attorney who was convicted of wire fraud in 2004 has been serving an interim suspension in New Hampshire as a result.

 The Attorney Discipline Office advised the court that the criminal proceedings were completed in May 2018. 

The New Hampshire Supreme Court ordered disbarment. 

The United States Court of Appeals for the Second Circuit affirmed and remanded for resentencing in 2006

Viewing the facts in the light most favorable to the government, as we must following the jury's verdict, see United States v. Ford, 435 F.3d 204, 206 (2d Cir. 2006), we are presented with the following. Males is a New Hampshire attorney who engineered a fraudulent scheme in order to bilk investors out of millions of dollars. He identified himself to potential investors as the lawyer for a firm named the Bailey Group and promised exorbitant returns on their investments — upwards of 100% per week — if the investors would agree to allow him to freeze or reserve their accounts in favor of the Bailey Group and add two of his "traders" as signatories to the accounts. Males presented both requirements to potential investors as somehow protecting them. In order to freeze the accounts, Males had investors execute a "non-depletion letter" which confirmed that the account would be held for the Bailey Group and that its funds could not "be removed or encumbered and shall be utilized exclusively for a private placement business transaction." One of the investors turned out to be FBI Special Agent Michael Keeley, posing as James Webber, a pension fund manager who controlled $164 million in pension assets. Males repeatedly touted the investment scheme to Agent Keeley through telephone and e-mail communications. Agent Keeley agreed that he would commit the $164 million to the care of the Bailey Group and would allow Males to list the Bailey Group traders as signatories on the account.

During this time, as part of an unrelated investigation, FBI Special Agent Gregory Coleman telephoned Males, identified himself as an FBI agent, and spoke to him about the Bailey Group. In that conversation, Males denied having met personally anyone in the Bailey Group, although he admitted that he worked with the Group on occasion.

After the conversation with Agent Coleman, Males continued to pursue Agent Keeley to become an actual participant. Males repeatedly requested that Agent Keeley complete and execute a non-depletion letter and that Agent Keeley add the Bailey Group's traders as signatories to the $164 million account. Males was then arrested and charged with eleven counts of wire fraud, each count based on a telephone call or e-mail message in which Males attempted to convince Agent Keeley to participate in the Bailey Group's investment plan. Following a jury trial, during which the government presented substantial evidence that Males' trading program was nothing more than a fraudulent scheme and Males' only defense was his own testimony, the jury convicted Males on the wire fraud charges. The court sentenced him principally to 78 months' imprisonment pursuant to a sentencing agreement that he entered into with the government.

(Mike Frisch)

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