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The Criminal Courts Building, which houses the state courthouse at 100 Centre Street, is seen in New York. REUTERS Chip East

Crowell & Moring settles lawsuits as fugitive lawyer seeks deal

5/22/2012 COMMENTS (0)

NEW YORK, May 22 (Reuters) - The law firm Crowell & Moring has settled two civil lawsuits filed by former clients alleging that one of its attorneys stole millions of dollars from their escrow funds.

The suits, brought by real estate companies Aristone Realty Capital and BCN 16th St, both claimed that attorney Douglas Arntsen embezzled money from their escrow funds.

A third lawsuit, brought by Regal Real Estate, was settled late last year.

Crowell and the three companies released a joint statement Tuesday saying they had "resolved all disputes" but did not offer details of the settlements.

Meanwhile, Arntsen, 34, is discussing a plea agreement with prosecutors over charges of grand larceny and scheme to defraud, eight months after prosecutors say he fled to Hong Kong in an effort to avoid arrest.

During an appearance by Arntsen in state criminal court in Manhattan Tuesday, his defense lawyer, Alan Lewis, said he was working on a memo to prosecutors that would offer both a reconciliation of Arntsen's assets and a recommendation for prison time in an effort to resolve the criminal case.

Lewis said he would press for a sentence at the "bottom of the scale" for first-degree grand larceny, which can carry anywhere from one to 25 years in prison. Arntsen is due back in court on June 1.

Prosecutors have accused Arntsen of embezzling more than $7 million from client accounts beginning in 2010, when, they claim, he started moving money into bank accounts he controlled.

A graduate of Seton Hall University School of Law, Arntsen resigned from Crowell & Moring on Sept. 12, just a day before the Manhattan District Attorney's office told the firm that he was under investigation. He had already fled to Hong Kong when authorities tried to arrest him on Sept. 14, prosecutors said.

At Arntsen's arraignment, Lewis said the trip to Hong Kong was planned and was not an attempt to flee.

Arntsen has been held without bail since he was brought back to the United States in January by federal authorities.

The criminal case is People v. Arntsen, New York State Supreme Court, New York County, No. 01399/2012.

For the prosecution: Assistant District Attorney Sophi Jacobs

For Arntsen: Alan Lewis of Carter, Ledyard & Milburn

The Aristone case is Aristone v. 9 East 16th Street et al., New York State Supreme Court, New York County, No. 651302/2011.

For Aristone: Luke McGrath of Dunnington, Bartholow & Miller

For Crowell: Celia Goldwag Barenholtz of Cooley

The BCN case is BCN 16th St. v. 9 East 16th Street et al., New York State Supreme Court, New York County, No. 151394/2012.

For BCN: David Pfeffer of Tarter Krinsky & Drogin

For Crowell: Celia Goldwag Barenholtz of Cooley

(Reporting by Joseph Ax)

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