Friday, July 12, 2013

78-Year Old Ex-Lawyer Gets Two Years House Arrest For Screwing Over Clients By Pocketing $400K+ Of Entrusted Funds Intended To Be Used To Pay Off Mortgages; Probe Triggered By Referral From State High Court's Attorney Ripoff Reimbursement Fund

From the Office of the Massachusetts Attorney General:

  • A former Tewksbury attorney has pleaded guilty and been sentenced in connection with stealing more than $400,000 from multiple clients, one of whom was disabled, Attorney General Martha Coakley announced []. The defendant stole money that had been entrusted to him by clients seeking help to pay off mortgages or as part of the probate of an estate.

    Raymond Paczkowski, Jr., age 78, of Tewksbury, pleaded guilty [...] in Middlesex Superior Court to Larceny over $250 from a Disabled Person and Larceny over $250 (7 counts). After the plea was entered, Superior Court Judge Edward P. Leibensperger sentenced Paczkowski to two years of home confinement, with the conditions that he be monitored by GPS and complete 400 hours of community service. Judge Leibensperger also ordered Paczkowski to serve three years of probation upon completion of his period of home confinement and to pay $479,000 in restitution.

    In 2010, the AG’s Office began an investigation after the matter was referred from the Tewksbury Police Department and the Massachusetts Clients’ Security Board, which manages a fund that is supported, in part, by annual fees paid by members of the bar.

    The Clients’ Security Board distributes fund money to members of the public who have sustained a financial loss caused by the dishonest conduct of a member of the bar acting as an attorney or a fiduciary.

    Paczkowski worked as an attorney specializing in conveyancing and probate work, and also did some work with insurance claims and litigation. In 2008, Paczkowski began stealing from several of his clients.

    According to investigators, Paczkowski received $75,000 in 2008 from a disabled client in order to pay off a mortgage on her home. Several months later, however, the client received a letter indicting that the loan was still outstanding. Investigation revealed that Paczkowski never gave the money to the lender and instead stole it for his personal use.

    Paczkowski also took money from several other clients who had sought help in paying off their mortgages. In one case, a client gave Paczkowski $175,000, with the intent that Paczkowski immediately use those funds to pay off the existing mortgage on his property. The client, however, continued to receive monthly mortgage statements and investigation revealed that Paczkowski stole the money instead of paying off the clients’ mortgage.

    In other instances, Paczkowski stole money from clients who had hired him to assist with the handling or disposing of estate property after experiencing a death in the family. In one case, a client who assumed the full title to his mother’s property after she passed sought Paczkowski’s assistance in paying off a mortgage in order to refinance. The client’s mother owed roughly $109,000 to the company that held a mortgage on the property and Paczkowski received $158,100 from a new lender. According to investigators, Paczkowski forwarded the proceeds to the client, but failed to pay off the original mortgage company. The client realized the theft when he received multiple late notices on his mother’s mortgage statement.
For the Massachusetts AG press release, see Former Tewksbury Attorney Pleads Guilty, Sentenced in Connection with Stealing More Than $400,000 from Clients (Defendant Stole Money Entrusted to Him by Clients for His Personal Use; Stole from Disabled Client).

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