White-Collar Crime

Ex-partner of K&L Gates gets 12 years in $1B embezzlement scheme

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As a senior K&L Gates partner, working in the law firm’s Hong Kong office, Navin Kumar Aggarwal was earning up to $1 million annually.

But that wasn’t enough to pay his gambling debts in Macau, so the solicitor stole from the firm and its clients to cover the shortfall. His record-breaking embezzlement scheme—8.5 billion Hong Kong dollars ($1.1 billion at the current exchange rate)—resulted in actual losses to clients and would-be investors of around 572 million Hong Kong dollars ($74 million) and left his law firm to repay victims and deal with resulting litigation, the South China Morning Post reports.

Aggarwal, now 47, pleaded guilty to fraud and money laundering and was sentenced last week to 12 years by a judge in Hong Kong’s Court of the First Instance.

“How does a man get through at least [500 million Hong Kong dollars] of other people’s money? The answer in your case was gambling,” Justice Peter Line told Aggarwal. “So the money has gone forever, lost in the casinos of Macau, wasted in the pursuit of your own pleasure.”

According to the judge, Aggarwal’s scheme lasted about four years and represents the country’s worst case of embezzlement. Much of his scheme involved persuading 92 would-be investors to deposit money with the law firm, which Aggarwal misappropriated by forging signatures and giving transfer instructions to staff under his authority. Using a dormant client’s account, he then funneled the money to casinos, relatives in India and other companies, the newspaper says.

The Am Law Daily (sub. req.) also has a story.

See also:

ABAJournal.com: “Facing Multiple Suits re $32M in Client Funds, K&L Gates Sues Ex-Partner in Custody in Hong Kong”

ABAJournal.com: “BigLaw Firm Seeks to Recover Stolen Client Money with Suit Against Casino”

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