Ponzi Scheme Leads To Disbarment

The Pennsylvania Supreme Court has accepted an attorney’s consent to disbarment

WFMZ TV 69 reported

When a Lehigh Valley attorney realized he was running out of money from one phony company to pay investors, he started taking money from investors in a second, similar Ponzi scheme, according to federal prosecutors.

Todd H. Lahr pleaded guilty Thursday to fleecing his own clients out of more than $2.7 million they thought was being invested in an international mining operation and European property leases. U.S. Attorney William McSwain announced in a news release that the 60-year-old pleaded guilty to four counts of wire fraud, two counts of securities fraud and one count of conspiracy to commit securities fraud and wire fraud.

U.S. District Judge Edward G. Smith accepted the guilty plea via video teleconference. Lahr is a Nazareth-area resident, who maintained a South Whitehall Township law practice. Federal authorities announced his indictment late last month.

“Lahr targeted the very people to whom he owed a duty of loyalty: his own law clients,” McSwain said in a prepared statement. “He stole millions of dollars from innocent victims who trusted him to serve as their lawyer and provide wise counsel.

He betrayed them and served his own greedy impulses instead,” McSwain said. “My office will continue to aggressively pursue securities and other financial frauds, particularly when perpetrated by lawyers and other industry professionals who are supposed to protect the rule of law, not defile it.”

Investigators said Lahr initially pushed his clients to invest in THL Holdings, promising their money would go toward investments in mining operations in Papua New Guinea and the purchase of shares of a penny stock, according to authorities. The money, however, went to Ponzi scheme payments to earlier investors and Lahr’s personal expenses.

Realizing he was running out of money to pay THL Holdings investors, Lahr started a second company, Ferran, promising investments in Papua New Guinea mining operations and residential property leases in Spain and England. The money raised through Ferran was used to pay THL investors and Lahr’s personal expenses, including his mortgage, debt, tuition and utility bills.

Investigators said Lahr lied in sworn testimony to the Securities and Exchange Commission, denying that he wrote at least 25 personal checks from the THL Holdings accounts.

The SEC has also filed a civil action against Lahr and Thomas Megas for securities and fraud violations. It’s not clear from the news release whether Megas also faces criminal charges.

Sentencing is scheduled for Aug. 3.

(Mike Frisch)