Legal News

Indicted Former Baker & McKenzie Partner Hit With More Charges

By Dan Slater

Martin Weisberg, a former Baker & McKenzie securities lawyer, was indicted today in connection with the alleged theft of $1.3 million from a corporate client’s escrow account. Here’s the indictment.

The allegation: Pursuant to an agreement for a $30 million escrow account formed by three companies in the Bahamas and Anguilla, Weisberg was to deposit the money in either a non-interest bearing bank account or a so-called interest on lawyer account (IOLA) — an interest-bearing bank account for which interest earned is donated to an IOLA fund maintained for the purpose of providing legal advice to low-income people.

Instead, according to the indictment, Weisberg, while telling representatives of the companies that he would place the money into either a non-interest bearing or IOLA account, put the money into an account with an annual interest rate of 4.75%. That’s about $100,000 of interest per-month, which allegedly went into Weisberg’s pocket for a total of $1.3 million.

According to our Dow Jones Newswire colleague, Chad Bray, Weisberg is expected to be arraigned on the charges before a federal magistrate judge in Brooklyn, later today. Barry Slotnick, Weisberg’s lawyer, said his client intends to plead not guilty to the charges at an arraignment hearing before a federal magistrate judge in Brooklyn, N.Y., later Tuesday. ”These monies were a loan and he paid back the loan,” Slotnick said.

Weisberg, who joined Baker & McKenzie in 2005, has been in scrapes with the law before. He resigned from the firm in October shortly after a previous indictment for securities fraud and money laundering, said Joe Linklater, a Baker & McKenzie partner. He has pleaded not guilty to those charges and the case is pending. Click here and here for previous posts on Weisberg.

The current charges “appear to relate to evidence uncovered in course of the firm’s internal investigation and turned over to U.S. Attorney’s office by the firm after Weisberg resigned,” Linklater said. ”Weisberg concealed the escrow account from the firm and did not have firm permission to act as escrow agent.”

The criminal investigation is being handled by the U.S. Attorney’s office in Brooklyn and the FBI.

Full post as published by Law Blog - WSJ.com on May 27, 2008 (boomark / email).