A veteran Lower Manhattan bankruptcy attorney pleaded guilty in a Manhattan federal court to embezzling funds. The attorney admitted to embezzling funds from a client’s bankruptcy estate and transferring the funds to himself. In addition to the federal case, the State of New York charged the man as well but he has yet to plead in the state case.
Misappropriation of escrow funds
The initial charges came about in November 2017 after a discovery of misappropriated funds. The attorney oversaw funds in an escrow account for a client involved in a bankruptcy related real estate transaction. Over a period of five months, the attorney transferred funds to himself. He pleaded guilty to embezzling $30,000 of client funds.
Federal prosecutors expect sentencing to commence in July. The man faces five years in prison and three years of supervised release with the possibility of added penalties from the state charges. He was also suspended from practicing law for misconduct.
Severity of embezzlement consequences
The severity of embezzlement charges, much like any other type of theft crime, correspond to the alleged amount stolen. New York penal law does not address embezzlement specifically. Rather embezzlement charges fall under the larceny umbrella, which address wrongfully taking another’s property.
Charges range from a Class E to a Class B felony, depending on the amount stolen. Larceny charges carry steep penalties with prison time ranging from three to 25 years along with fines of $5,000 up to double the amount stolen. In this case the state court could charge the man with a Class D felony, used for theft crimes of $3,000 to $50,000.
Long term aftereffects of a felony conviction
In addition to the threat of prison time and fines, felony charges have long-term implications for those convicted. Those with a felony record face difficulty finding employment and housing. A felony conviction also results in the loss of civil rights including the ability to vote.