Posted Jan 23, 2012 05:52 pm CST
A former Crowell & Moring lawyer accused of embezzling $2.5 million in escrowed client funds was arraigned on Friday in criminal court in Manhattan and ordered held without bail as a flight risk.
Douglas Arntsen, 34, faces charges of grand larceny and scheming to defraud. He is also under investigation, prosecutors said at the hearing, concerning an additional $21 million allegedly stolen from another unidentified client, according Reuters and the New York Observer.
Accused of fleeing to Hong Kong to avoid prosecution last year as his alleged scheme was unraveling, Arntsen actually went there on a planned trip, said his attorney. Arntsen is represented by partner Alan Lewis of Carter Ledyard & Milburn, notes a subsequent Reuters article about the defense lawyer.
Arntsen’s wife and parents sat in the New York courtroom as he was arraigned and his parents offered to post their $500,000 home in Staten Island for his bond.
The government said at Friday’s hearing that Arntsen is being investigated concerning an additional theft of $21 million, Reuters reports. As detailed in earlier ABAJournal.com posts, he allegedly traveled to Hong Kong after he was unable to meet a real estate client’s demand for a full refund of the money in its escrow account.
A graduate of Seton Hall University School of Law, Arntsen was with Buchanan Ingersoll before joining Crowell & Moring in 2007, as counsel, with a group of nine distressed debt and finance practitioners from his former firm.
A spokeswoman said the law firm is cooperating fully with the government and has retained outside counsel to probe Arntsen’s activities while he was at Crowell.
ABAJournal.com: “Crowell Client Asked in July re Use of Trust Account By Ex-Counsel Now Accused of Stealing”
ABAJournal.com: “Crowell & Moring Settles $5.5M Client Suit re Ex-Counsel Awaiting Extradition in Hong Kong”
Updated at 6:55 p.m. to include information from subsequent Reuters article.