[ by Melanie Gretchen ]

A former Crowell & Moring attorney made money for his firm and his clients.  Unfortunately, the money he made for himself was (illegally) more than either were aware.

Federal Findings and Allegations. Douglas Arntsen pled guilty in October to charges of grand larceny and scheme to defraud.  He stood accused of siphoning millions of dollars from escrow funds into bank accounts he controlled. 

As authorities went to arrest him, he flew to Hong Kong, 2 days after his resignation and 1 day after the Manhattan district attorney's office told the firm that he was the subject of a criminal investigation.  While prosecutors accused him of fleeing, Arnsten's lawyer countered that the trip had been planned for some time.

Federal Sanctions. On Tuesday, the Appellate Division, First Department removed Arnsten's name from the bar, retroactive to the day he first confessed to his crimes.  In addition, he was sentenced to between 4 and 12 years in prison.  Unlike Allen Stanford who tearfully protested his innocence at his 110-year prison sentencing, Arnsten tearfully apologized to the firm, his victim, and his family, accepting responsibility for his crime.

The case: Matter of Arntsen, Appellate Division, First Department, No. 147.

For further details, go to [Reuters, 3/19/13] and our What Went Wrong story, [Allen 'Ponzi' Stanford Gets Long Prison Sentence, 6/14/12].

To contact Melanie Gretchen: melanie@compliance-insights.com.