Legal News

Atlanta-Area Lawyer Pleads Guilty To Leading $2M Fraud

By Chris Herring

Last week, a Georgia man became the latest attorney to fall from grace by pleading guilty to felony charges.

Stephen Ballard, 53, pleaded guilty to a count of wire fraud after having run a $2 million Ponzi scheme funded by his clients. He now faces up to 20 years in federal prison. Click here to read the story in the Atlanta Journal-Constitution.

According to the story, Ballard ran the real estate scheme between 2002 and 2006, swindling 24 clients from three states in the process. Both Assistant U.S. Attorney Gale McKenzie and Ballard’s attorney said he’d been upfront about his dealings since being charged.

"He came with legal documents and deeds, showing the transactions that occurred," McKenzie said. "There were forged sales contracts from bogus sellers."

According to the AJC: Ballard told his clients he was making lucrative investments, often promising profits exceeding 50 percent of the initial investment. He would then deposit the closing fees in his law firm's escrow account instead of turning them over to the seller, prosecutors said.

Said Ballard’s attorney, Michael Martin: "He came in and accepted responsibility for his conduct. He's never denied what took place."

A number of other high-profile attorneys have entered guilty pleas on felony charges as of late. Last month, Gene Cauley admitted to two felonies (wire fraud and criminal contempt) and now faces 78 to 97 months in jail. He’d been accused of misappropriating more than $9 million in funds that was supposed to go to clients.

Cauley’s former mentor, former attorney Bill Lerach, pleaded guilty in Feb. 2008 and is currently in prison. New York attorney Marc Dreier, who in May pleaded guilty to scheming to sell $700 million in fake promissory notes, is to be sentenced today.

In other attorney news, Above the Law pointed us to this Philadelphia Inquirer story on an attorney who was arrested and charged with allegedly trying to smuggle heroin into a jail.

Full post as published by Law Blog - WSJ.com on July 13, 2009 (boomark / email).