Ex-partner gets 64 months in $2.7M client theft case
A former litigation partner at a well-known Michigan law firm was sentenced Wednesday to 64 months in federal prison for stealing $2.7 million from clients between 2004 and 2013.
Under the guise of providing legal services to Dawda, Mann, Mulcahy & Sadler clients, a criminal information says, Kenneth Flaska used “fraudulent pretenses, representations and promises” to obtain funds payable to clients from various banks and divert them to his own accounts. The 62-year-old pleaded guilty in April to bank fraud and money laundering, according to the Detroit News and the Macomb Daily. An earlier Crain’s Detroit Business article provides additional details.
An avid sailor who regularly participated in yacht races, Flaska used the money he stole to fund an extravagant lifestyle, the government said. He has been ordered to make restitution of $2.7 million. The feds have obtained $352,000 toward that amount from selling his home in Grosse Pointe Park; another $256,000 from selling his two boats; and $345,000 by seizing funds from a bank account.
Flaska voluntarily resigned his license to practice law in Michigan.
It isn’t clear from news reports what alerted the law firm to his fraud. Co-founder Edward Dawda told Crain’s the firm immediately expelled Flaska, who acted alone, as soon as it was aware he had diverted client funds.
