Disbarred Lawyer Pleads Guilty To Stealing Client Escrow Funds

Thursday, June 4, 2015


Disbarred Lawyer Pleads Guilty To Stealing Client Escrow Funds

Defendant Will Be Sentenced To One Year in Jail and Make $280,000 Restitution

Brooklyn District Attorney Ken Thompson today announced that a former attorney has pleaded guilty to stealing money from 25 clients whom he had represented in personal injury cases.

District Attorney Thompson said, “Today’s guilty plea ensures justice for the victims in this case who retained the defendant because they suffered injuries in car accidents or falls. Instead, he victimized them again when he violated their trust and stole their much needed settlement money.”

District Attorney Thompson identified the defendant as Kenneth Gellerman, 58, of 2596 Ocean Avenue in Bellmore, L.I.  He pleaded guilty yesterday to one count of third-degree grand larceny and one count of scheme to defraud before Brooklyn Supreme Court Justice Danny Chun, who indicated he would sentence the defendant to one year in jail if he makes restitution of $280,000.

The defendant made restitution of $100,000 today. He is expected to pay an additional $180,000 in restitution by his next court date of August 12, 2015. If he makes the agreed upon restitution the case will be adjourned to September at which time he will receive one year in jail. If he does not make the agreed upon restitution, he could face the maximum sentence of 2 1/3 to 7 years in prison.

The District Attorney said that, according to the plea, from December 3, 2008 until September 30, 2013, the defendant engaged in a scheme to embezzle money from more than 25 clients by depositing checks received from negotiated settlements into his escrow account, or into other accounts that he controlled.

The defendant withdrew money from these accounts, according to the indictment, by drafting checks and transferring money into his business account.  He failed to pay his clients some or all of the money to which they were entitled, and in at least one case, he failed to pay money to a third party having a claim secured by the settlement.

After he was suspended from practicing law in January 2013, according to the indictment, the defendant continued to collect settlements without forwarding the money to clients. To conceal these thefts, the defendant often allegedly settled cases without informing clients, and he signed endorsements on the reverse sides of the checks in order to deposit those checks into his accounts. He was disbarred following his arrest last year.

The case is being prosecuted by Assistant District Attorneys Joseph DiBenedetto and John Holmes of the District Attorney’s Investigations Division, under the supervision of Felice Sontupe, Chief of the Frauds Bureau, and William E. Schaeffer, Chief of the Investigations Division.