Bankruptcy Law

Pa. Lawyer Gets 33 Months for Embezzling Money From Clients Under Guise of Legal Fees

A suspended Pennsylvania lawyer has been sentenced to a 33-month federal prison term for embezzling more than $100,000 from clients.

Kenneth Reidenbach, 61, was convicted last year of multiple felonies including bankruptcy fraud concerning money allegedly taken from four bankruptcy and divorce clients, under the guise of attorney’s fees, between 2003 and 2006, in a scheme operated from his Lancaster, Pa., law office, reports Lancaster Online.

His former law partner, Herbert Henderson, pleaded guilty and testified against Reidenbach at trial. He has not yet been sentenced.

In addition to the prison term imposed Friday by a federal judge in Philadelphia, Reidenbach must also pay $8,700 in restitution, the newspaper website recounts. His lawyer, Samuel Stretton, said he was disappointed by the length of the sentence, which he said exceeds federal guidelines, and plans to appeal.

A Sept. 15, 2011 indictment (PDF) provides further details about the case against Reidenbach, who was accused of transferring client assets including proceeds from real estate sales to the law firm’s trust account and then applying the money to inflated legal bills considerably in excess of what clients agreed to pay. The clients, who subsequently filed for Chapter 7 bankruptcy, allegedly were told that they would get money back after their debts were discharged.

Additional coverage:

Lancaster Online (Dec. 2010): “Two Lancaster County lawyers face felony charges”

Lancaster Online (Nov. 2011): “Attorney pleads guilty; partner opts for trial in $50K fraud”

Lancaster Online (Nov. 2011): “Jury convicts attorney of fraud”

Lancaster Online (May 2012): “Convicted attorney wants a new trial”

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