Thursday, August 03, 2023
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According to the lawsuit, Leach was supposed to receive 33% of any settlement amount that he negotiated on behalf of clients, and was required to pay the remainder of the settlement minus any expenses to his client.
The Department of Justice says Leach had “Interest on Lawyers’ Trust Accounts (“IOLTA”) accounts at Webster and Citizens Banks intended to hold “nominal” amounts of clients’ funds or “funds that are held for a short period of time on behalf of clients.”
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In 2019, Leach had been suspended by the state Supreme Court over allegations that he spent his clients’ money on personal expenses including golf club membership fees and personal travel.
This week, the federal government in its suit said that Leach spent money from his IOLTA accounts “for personal expenses at Wheeler School, Syracuse University, Pitzer College, Metacomet Country Club, travel expenses, and restaurants” — in violation of federal law.
The lawsuit asserts that Leach failed to pay required taxes — and that Leach attempted to evade the IRS.
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“LEACH attempted to prevent the IRS from collecting his unpaid liabilities for the tax years 2013 – 2017 by numerous means, including, but not limited to, using his business IOLTA accounts to pay personal expenses, ceasing the use of his personal bank accounts, using bank accounts of family members, submitting false Form 433-A to the IRS in which he failed to disclose assets, and withdrawing large sums of money from his IOLTA accounts in cash. In total, LEACH evaded payment of over $300,000 in taxes,” according to the suit.
The U.S. government also in its lawsuit accused Leach of fraud, claiming the following:
“Leach embezzled settlement funds owed to his clients from settlement payments received by him on their behalf. Over the years, he misappropriated over $500,000 of his clients’ settlement funds causing over $250,000 in losses to those of his clients who were never paid some or all of the settlement funds to which they were entitled.
Leach forged his clients’ signatures on the back of settlement checks received by him. He then deposited those checks into his IOLTA accounts without notifying his clients that he had received the settlement checks.
Leach used the funds he obtained from his clients’ settlement checks to repay earlier clients whose funds he had previously misappropriated, and to pay for personal expenses out of his IOLTA accounts.”
Intent to Plead Guilty
On Monday, Leach entered a plea agreement — he intends to plead guilty to both charges, and the federal government said it “agrees to recommend a two-level reduction in the offense level for acceptance of responsibility.”
The maximum statutory penalty for wire fraud is 25 years imprisonment and tax evasion is five years imprisonment.
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