Disbarred Lawyer Sentenced to One Year in Jail for Stealing Escrow Funds from Clients


Wednesday, December 2, 2015


Disbarred Lawyer Sentenced to One Year in Jail for Stealing
Escrow Funds from Clients

Defendant Embezzled Settlement Checks; Paid $280,000 in Restitution

Brooklyn District Attorney Ken Thompson today announced that a former attorney was sentenced to one year in jail and also paid $280,000 in restitution for stealing money from over 25 clients whom he had represented in personal injury cases.

District Attorney Thompson said, “This defendant re-victimized people who suffered personal injuries by stealing their settlement money, abusing their trust and betraying his profession. He paid back a substantial amount in restitution and now deserves to spend time behind bars.”

The District Attorney identified the defendant as Kenneth Gellerman, 58, of 2596 Ocean Avenue in Bellmore, L.I.  He was sentenced today by Brooklyn Supreme Court Justice Danny Chun to one year in jail following a guilty plea to one count of third-degree grand larceny and one count of scheme to defraud, which was entered on June 3, 2015.  The defendant today also made a final restitution payment to reach the sum of $280,000 that was contemplated as part of his plea agreement.

The restitution payments were made to the Lawyers’ Fund for Client Protection, a trust that reimburses people who were embezzled by their lawyers. The Fund will distribute the money to the defendant’s former clients.

District Attorney Thompson 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 for mostly personal injury lawsuits 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 the overall supervision of William E. Schaeffer, Chief of the Investigations Division.