Posted May 19, 2009 02:23 pm CDT
Prominent Arkansas plaintiffs securities lawyer Gene Cauley is expected to plead guilty for failing to pay clients $9.3 million in settlement funds he was supposed to be holding as their escrow agent.
Cauley will plead guilty to wire fraud and criminal contempt for failing to safely hold the money, the Wall Street Journal Law Blog reports. The blog says the expected plea was revealed in an Arkansas Supreme Court filing.
Cauley’s lawyer, John Wesley Hall, told the Law Blog his client is expected to file the guilty plea in June. Hall said the missing money “could be in all kinds of things,” such as real estate and business ventures. So far, Hall said, he has recovered about $500,000 and he hopes to find the other missing funds.
Cauley revealed to co-counsel last month that he can’t produce the money. It was supposed to be held in U.S. Treasury bonds.
The Law Blog cites this explanation in Cauley’s court filing: “I now understand I have been faced with issues of depression and am seeking appropriate help for them. I do not offer this situation as any form of defense for my actions detailed here. I accept full responsibility for my actions.”