Out Of Trust
The New Hampshire Supreme Court has disbarred an attorney who had misappropriated “at least $690,444.95 in client funds, transferred $943,496.09 from an IOLTA account to his operating account without client designation, commingled more than $350,000 of operating-account funds with IOLTA accounts and otherwise caused client matters to be out of trust.”
The Union Leader reported on related criminal charges
John L. Allen, 63, of Bedford, used to provide legal services related to real estate and debt restructuring.
According to a plea agreement, Allen told his clients he would hold their money in escrow accounts, to be used for specific transactions. But the agreement said Allen instead used clients’ money for credit card bills, his rent and vacations, including a nearly $12,000 stay at a luxury hotel in Miami.
“Allen spent all of the $1,567,134 on his own personal and unrelated business expenses,” the agreement says.
A second client hired Allen to help with a real estate deal in Claremont. Allen was supposed to hold $170,000 in an escrow account. The plea agreement said Allen spent $105,000 of that money on himself. A few months later, the same client hired Allen as he was developing a subdivision in Hooksett. Allen was supposed to hold $525,000, to be used to build a road to the subdivision. Allen pocketed the money, the plea agreement reads, and the road was never built.
A third client had Allen hold $15,000 in an escrow account in May 2019, and designated the money for costs related to the purchase of a house in Newport. A month later, she had Allen keep another $58,518 in an escrow account as she bought another property in Franklin. Allen disbursed $10,000 on the Franklin property, but kept more than $63,000 of that client’s money.
Two more clients hired Allen as they bought a house in Wolfeboro, and gave him two checks for a total of $165,000 to purchase the property. Allen kept the money for himself, according to the plea agreement.
To hide the theft, prosecutors said, Allen made many transfers back and forth between multiple bank accounts, and spent money from those accounts both on business and personal expenses.
Allen’s law license was suspended last year, after clients David Moore and Manchester developer Autumn Frost LLC notified the state Attorney Discipline Office that Allen had failed to turn over $895,000 of their money.
In filings from the Attorney Discipline Office, Moore described Allen’s odd behavior.
“Mr. Moore described that Mr. Allen began taking vacations with his significant other, and appeared to be spending large sums of money on these trips,” the Discipline Office wrote. In those filings, Moore said Allen told him he had buried another client’s money so it would never be found.
Allen was charged in September with wire fraud and money laundering, and he pleaded guilty on Thursday.
He is set to be sentenced on Feb. 25. The plea agreement proposes a sentence of 57 months and restitution payments of at least $2.43 million, but prosecutors agree they would not oppose a lighter sentence if Allen accepted responsibility for his actions.
(Mike Frisch)