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Former Tampa Attorney Charged with Conspiracy, Bankruptcy Fraud, and Defrauding Clients of $1.3 Million

pexels-photo-534204-300x167The U.S. Attorney’s Office for the Middle District of Florida announced the unsealing of an indictment charging former attorney James Lee Clark of Wilton Manors with conspiracy and fraud charges.

Clark, 59, is accused of conspiracy, bankruptcy fraud, and defrauding his clients of over $1 million. He was charged with conspiracy to commit bankruptcy fraud, bankruptcy fraud, falsification of records in a bankruptcy proceeding, and wire fraud. It is unclear if he has acquired the services of an attorney.

According to the indictment, the former Tampa attorney allegedly conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors, such as Fannie Mae, who were holding mortgage notes on properties that were to be foreclosed.

The indictment claims that the accused party falsely represented to distressed homeowners facing foreclosure that they would negotiate with the mortgage creditors to prevent their properties from being foreclosed if the homeowners gave their warranty deeds to an entity that the paralegal man controlled. The pair reportedly convinced the homeowners to pay them rent or agree to put their property up for sale.

In order to continue to collect rent or profit from the sale of the properties, the indicted allegedly filed fraudulent bankruptcy petitions in the homeowners’ names to prevent the mortgage creditors from foreclosing the properties. In some cases, he allegedly filed multiple bankruptcy petitions in the names of the homeowners. It is not currently known how many victims were caught up in the alleged scheme.

Both of the above allegations constitute bankruptcy fraud, which is a serious crime that is thoroughly investigated by the Internal Revenue Service (IRS) and prosecuted by the Department of Justice. Bankruptcy fraud usually takes place in one of four general forms:

  • The filer tries to hide assets in an effort to avoid forfeiting them.
  • The filer deliberately submits incomplete or false documents.
  • A person files multiple petitions using real or false information in multiple jurisdictions.
  • The filer bribes a court-appointed trustee.

In addition to the bankruptcy fraud allegations, the former attorney’s indictment also claims that he defrauded his clients out of approximately $1.3 million through his law practice from 2012 to 2017. He purportedly acted as a trustee for his clients and had access to their money as the arbiter of their trust funds. Instead of using the funds for their intended purpose, he allegedly diverted the money into his law firm’s bank accounts and used it to pay for personal expenses, such as travel, cars, and gambling.

If convicted, the said former attorney faces up to 20 years in federal prison for falsifying records and for each count of wire fraud. He additionally faces up to five years in prison for conspiracy and for each count of bankruptcy fraud. The prosecution is also seeking a money judgment of $1.3 million, which are the proceeds of his alleged criminal conduct.

The former attorney together with his paralegal, already pleaded guilty to one count of conspiracy to commit bankruptcy fraud on September 24, 2019. His sentencing hearing is scheduled in January next year.

South Florida Fraud Attorney

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