White-Collar Crime

Texas Lawyer Accused in $2.3M Theft From Disabled Veterans Takes Plea re 2 of 21 Counts

A Texas lawyer accused of stealing some $2.3 million from 49 disabled veterans whose finances he handled, has taken a plea as a trial was about to begin in federal district court in Houston on Tuesday.

Joe B. Phillips, 73, pleaded guilty to two of the 21 charges he faced and admitted that between 2003 and 2007, he had transferred over $1.36 million from client accounts to a joint checking account for himself and his wife the Houston Chronicle reports.

Phillips’ wife, a self-described gambling addict who was also charged, took a plea earlier this year that made it harder for Phillips to defend himself, the newspaper says. Phillips could get eight years in prison and a $500,000 fine when he is sentenced in December, in addition to being expected to make restitution.

After working briefly for the U.S. Department of Veteran’s Affairs in Houston in the 1980s, Phillips has been in private practice for years, primarily representing disabled veterans, with his wife as his legal assistant, and was authorized both by the VA and the Social Security Administration to receive his clients’ checks and oversee their finances.

He was never audited until 2007, when fake accounts and falsified balances were discovered. Further investigation by court-appointed lawyers then revealed fraud and theft that had gone on for at least a decade, the newspaper reports.

In the past, Phillips has blamed the VA for a lack of oversight and said others were responsible for missing funds for which he was held liable as a fiduciary. He declined to comment when contacted by the Chronicle after his guilty plea.

Earlier coverage:

ABAJournal.com: “Lawyer, 71, Awaits Trial in Record Alleged $2M Theft as Guardian for Disabled Veterans”

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