While some of the general population takes pleasure in poking fun at the legal profession with lawyer jokes, when professional legal services are needed, they trust lawyers and their staff to efficiently advocate and plan for their well being, whether it be financial or physical. When an attorney does an inadequate job, there are several consequences such as discipline by their law licensing body or a civil lawsuit brought by the client or their descendants. But when an attorney breaks the law in the performance of their services, they aren’t immune from criminal prosecution and can end up in federal prison. A Pennsylvania attorney found this out first hand when he was sentenced this week for a number of crimes relating to his representation of a client.
Doylestown, Pennsylvania lawyer, Ralph Scott, 72, was sentenced to four years in a federal prison on September 10th for stealing over $10 million from a client’s estate. The sentencing stemmed from a guilty plea back in March of a single count each of tax evasion, mail fraud, and attempting to interfere with the administration of internal revenue laws. He also pled guilty to three counts of failing to file his own tax returns.
John C. Bready was a client that enlisted Scott’s services with regard to administering his estate. At the time of Bready’s death, the value of the estate exceeded $6 million, which triggered a federal law that required that a tax return be filed on behalf of the estate and also mandated that approximately $520,000 of the estate funds be paid to the Internal Revenue Service. Instead of filing the required return, Scott diverted over $2 million of the money from the Bready estate to infuse money into his own law practice accounts.
According to authorities, Scott wanted to avoid paying the federal tax in order to keep enough money on hand to pay the estate’s beneficiaries. Even after the client’s death, he forged the decedent’s signature in order to deposit fraudulent checks into the law firm’s account. Finally, Scott allegedly coerced Bready’s successor executor into renouncing his duties in an attempt to continue his money siphoning activities.
In addition to the four years that Scott will serve in a federal prison, he was ordered to spend three years in a supervised release program. Further, Scott was ordered to pay restitution in the amount of $2.3 million, forfeit $1.7 million, and pay a $375 special assessment.
This story provides two very important lessons. First, if you a legal or tax professional, it is important to ensure that you are following the law to the letter. Mr. Scott discovered that breaking the law while providing legal services to his clients was a big mistake. His transgressions will likely result with him spending most of the rest of his life behind bars. Second and most importantly, this story should provide an individual or family the necessary level of awareness when choosing an attorney for your tax or estate planning needs. There are thousands of attorneys out there that purport to provide excellent services. But as was demonstrated in the above story, the proper due diligence into an attorney can result in you being taken for a ride.
The tax and accounting professionals at the Tax Law Offices of David W. Klasing have a plethora of experience in representing individuals in a myriad of tax and estate planning situations. From tax preparation and tax disputes to estate, wealth, and successor planning, our team of professionals is here to help. Making a choice as to who will represent you if an important decision and should not be taken lightly. Contact the Tax Law Offices of David W. Klasing today for a reduced-rate consultation.