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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