Legal Industry News
October 11, 2012
Former Crowell & Moring Attorney, After Pleading Guilty to Stealing Millions from Clients, to be Sentenced Next Week
Douglas Arntsen , 34, has entered a guilty plea to charges that he embezzled more than $10 million dollars from two clients of the Manhattan law firm Crowell & Moring LLP, where the he was employed, according to New York County District Attorney Cyrus R. Vance, Jr.
Specifically, Arntsen pleaded guilty to three counts of grand larceny in the first degree, and one count of scheme to defraud in the first degree. He is expected to be sentenced on October 17, 2012.
“The trust between attorney and client is sacred,” said District Attorney Vance. “This defendant utterly betrayed that trust by stealing large amounts of money from his clients before fleeing to Hong Kong.
Today’s conviction holds him accountable for fraudulent conduct that violated the law, abused his clients’ trust, and cost them millions of dollars.”
According to documents filed in court, Arntsen was an attorney at Crowell & Moring between February 2007 and September 2011. During this period, Doina Capital (“Doina”), an investment fund, employed Arntsen to do its legal work.
In early 2009, Arntsen began transferring millions of dollars of Doina’s escrow funds into accounts that he opened and controlled without his client’s knowledge. Then he began using the funds to support a lavish lifestyle that included visits to expensive restaurants, sporting events, and strip clubs. Arntsen also used the money to purchase businesses for himself, friends, and family members.
In spring 2010, Arntsen began to steal from a second client, Regal Real Estate, LLC (“Regal”), a real estate management company, to cover the shortfalls he created by his thefts from Doina and to continue funding his lifestyle. Arntsen embezzled more than $7 million of Regal’s money, moving the money into additional bank accounts that he set up for that purpose.
On September 13, 2011, a Regal employee confronted Arntsen about millions of dollars of missing escrow money. Although Arntsen was originally scheduled to fly to Hong Kong out of New York, in order to evade arrest he drove to Philadelphia that evening and flew to Hong Kong, where he was later arrested and extradited to the United States.
Arntsen obtained his bachelor of science degree at St. John’s University in 1999. He finished his J.D. at Seton Hall in 2002, after which he proceeded to Fordham University to completed his LL.M. in 2004.
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