Deirdre M. Daly, United States Attorney for the District of Connecticut, today announced that JOHN OBRIEN, 53, of North Kingstown, R.I., was sentenced yesterday by Chief U.S. District Judge Janet C. Hall in Bridgeport to 36 months of imprisonment, followed by three years of supervised release, for stealing more than $950,000 from clients of his law practice.
According to court documents and statements made in court, OBRIEN was an attorney with an office located in Fairfield. Between approximately April 2011 and June 2014, OBRIEN defrauded four clients by using funds from one client to pay off debts owed in connection with his representation of other clients, and also to pay for personal expenses, including the tuition for one of his children at a private high school.
In approximately May 2012, OBRIEN accepted $458,343.06 into his Interest on Lawyer Trust Account (IOLTA) as proceeds of a reverse mortgage taken by a client (Client 1) and his clients wife, both of whom are now deceased. The funds from the reverse mortgage were intended to pay debts that would keep the clients family business sustainable. Between June 2012 and February 2014, OBRIEN disbursed only $204,000 to the family business. In approximately July 2013, OBRIEN received an additional $194,636.89 from bank accounts held in the name of his client and one of his clients children. The funds were supposed to be distributed to the clients children. Only $104,008 was distributed. In approximately April 2014, OBRIEN accepted $837,250 into his IOLTA as proceeds of a sale of his clients real property. Only $470,000 of that amount was disbursed to his clients heirs. The first check written from OBRIENs IOLTA account upon receipt of the $837,250 was to a prior unrelated client for a debt owed to that client. In total, OBRIEN defrauded Client 1 of $712,221.95.
In May 2011, OBRIEN deposited $74,250 from a second client (Client 2) into his IOLTA. The money was never disbursed to the client.
In approximately September 2011, OBRIEN agreed to represent a terminally ill woman (Client 3) for estate planning. Upon this clients death in January 2013, OBRIEN received $137,000 from the estate into his IOLTA. After the deposit, OBRIEN paid
personal expenses from the IOLTA, including his sons private school tuition and thousands of dollars to his ex-wife. Only $112,283.20 was distributed to the heirs of O BRIENs client. Upon a review of this matter by the Connecticut Bar Statewide Grievance Committee, OBRIEN produced fraudulent memos allegedly written to the daughter of his client requesting release of various amounts. One of the memos included payment to the family business of Client 1 for a $15,000 lawnmower, which was paid for from Client 3s estate. Client 3 did not purchase a lawnmower from the family business of Client 1.
OBRIEN represented a client (Client 4) in the purchase of the clients deceased mothers home in Westport. In two payments in August 2013 and February 2014, the client transferred to OBRIEN approximately $199,332 for purchase of the home, which OBRIEN was supposed to pay to the fiduciary of the estate to complete the sale. In approximately April 2014, OBRIEN finally paid the fiduciary of the estate to complete the sale. The check to the fiduciary of Client 4s mothers estate was the first check written from the defendants IOLTA upon receipt of the $837,250 in Client 1s real estate sale proceeds. Because of the delay in the defendants transfer of payment to the fiduciary of the estate, Client 4 incurred approximately $13,558.38 in storage fees for belongings while the property was unavailable for occupancy by Client 4.
While OBRIEN was engaged in the above conduct, he made withdrawals of thousands of dollars in cash from his IOLTA. On several occasions, deposits of the same or similar amounts were made into his personal bank account on the same day that the funds were withdrawn from his IOLTA.
Chief Judge Hall ordered the government to submit a proposed restitution order within 14 days.
On Dec. 29, 2016, OBRIEN pleaded guilty to one count of wire fraud.
OBRIEN resigned from the Connecticut bar in June 2015.
This matter was investigated by the U.S. Secret Service and the Connecticut Financial Crimes Task Force, with assistance from investigators of the Connecticut Statewide Bar Grievance Committee. The case was prosecuted by Assistant U.S. Attorney Sarala V. Nagala.
--DOJ District of Connecticut
Source: U.S. Secret Service