A rash of crooked attorneys has descended upon real estate finance.
From Chicago to Connecticut, lawyers are facing charges of stealing from clients, ripping off churches and withholding funds from lenders.
In the most recent case, Stephen Gionfriddo, 55, the former mayor of Middletown, Conn., and a longtime prominent attorney, pleaded guilty Thursday to stealing more than $600,000 from clients of his law firm.
Much of the money was supposed to pay off mortgages. But instead, federal prosecutors say Gionfriddo used the cash to cover gambling losses.
“Unfortunately, this case is just the latest example of an individual who finds himself in a federal courtroom for stealing to feed an out-of-control gambling habit,” Kevin O’Connor, the U.S. attorney in Connecticut, said in a statement.
In one instance, Gionfriddo was supposed to pay off an $110,000 mortgage for a client, but instead used the money “for his own personal use,” according to federal court documents.
Another time, Gionfriddo represented a client at a real estate closing, the prosecutor said. But he took the money to cover losses from a Connecticut casino and then temporarily made payments on the mortgage to hide the scheme, court records show.
In that case the client lost $128,347.
Gionfriddo also bilked family and friends out of $209,500 to “conceal and continue the scheme,” O’Connor. Several clients are also suing him.
He faces up to 20 years in prison and a fine of up to $250,000.
Another Connecticut lawyer is also in trouble, convicted of embezzling more than $2.2 million in client funds. Once again, several of the thefts involved mortgage transactions.
New Haven, Conn., lawyer John H. Peck Jr., has pleaded guilty to the thefts, according to a statement from Chief State’s Attorney Christopher L. Morano.
Peck, 52, was first accused of stealing more than $270,000 from an elderly woman he represented in a series of four real estate transactions beginning in 2002, Morano said.
He even used her identity to steal more money, Morano said.
“During the course of the transactions, Mr. Peck diverted the proceeds from the sale of properties to himself and applied for a mortgage on the victim’s behalf, embezzling funds for his own use,” Morano said.
Peck hid his crime by having the woman make her mortgage payments directly to him, Morano said.
During that investigation investigators discovered thefts totaling more than $2 million. Morano has recommended that Peck be sentenced to up to 14 years in prison and pay restitution to his victims.
In Florida, a lawyer has been disbarred for allegedly stealing more than $100,000 by not paying off a mortgage that dated back to 1992.
According to a report from the Florida Supreme Court, Barney John Cummins of Broward County lost his license for engaging in “conduct involving dishonesty, fraud, deceit or misrepresentation;” for failing to comply with the rules and regulations of handling trust accounts; and for not keeping a client up to date with information.
The court found that Cummins had never satisfied a $107,000 mortgage that was originally recorded in 1992. He also allegedly tried to cover his tracks by filing false documents with a mortgage company.
Cummins could not be reached to comment. He was also ordered to cover the court’s $3,660 cost for the investigation.
Allentown, Pa., lawyer Michael D. Kasprenski, 43, has been charged with using money he stole from mortgage transactions to buy a Canadian vacation home and to board horses.
Kasprenski has been indicted by a federal grand jury on 11 counts of wire fraud, three counts of filing false income tax returns and one count of bank fraud.
U.S. Attorney Patrick Meehan said Kasprenski stole more than $1.5 million from the heirs of estates he represented.
“He saw an opportunity to profit from someone else’s pain,” Meehan said in statement. “Instead of representing the interests of his clients during difficult times, he exploited their anguish and vulnerability and built a vacation home.”
The 24-count indictment alleges that Kasprenski forged clients’ names on checks and documents he then submitted to financial institutions and investment firms to get access to their money.
Checks and wire transfers Kasprenski arranged to have sent to himself ranged from $500,000 to $8,000, according to the indictment.
Kasprenski is also accused of failing to pay off a client’s mortgage and taking the money for his own use.
Kasprenski is free on bail. He could not be reached to comment.
Kasprenski stands accused of stealing money from the heirs of the dead. The three other lawyers allegedly stole from clients.
But an Illinois lawyer has been charged with stealing from churches.
Phillip Radmer, a disbarred lawyer from the Chicago area, has been charged with two felonies for his role in a scheme to bilk churches in a phony land deal, John Gorman, a spokesman for the Cook County State’s Attorney, confirmed to MortgageDaily.com.
Radmer is accused of organizing an ongoing financial crime. He faces up to 30 years in prison and could not be reached.
Gorman said Radmer was charged as part of a scheme where 20 vacant parcels of land owned by 12 churches were sold without the churches’ knowledge.
State and federal investigators used a search warrant to get into Radmer’s home. Gorman said they left with bank and land records, a notary seal linked to the deals, $100,000 in cash, bank records showing a balance of $177,000 and a 9 mm handgun.
The phony land deals may have totaled as much as $655,000, authorities said.
