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Ex-Attorney and Friends Stole $5M from Lawyers' Accounts: DA

By Trevor Kapp | May 2, 2016 4:37pm
 Three conspirators were charged as part of the six-year scheme, prosecutors said.
Three conspirators were charged as part of the six-year scheme, prosecutors said.
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MANHATTAN CRIMINAL COURT — A disgraced lawyer and two conspirators laundered more than $5 million from Manhattan-based attorneys’ escrow accounts as part of a six-year scheme, prosecutors said Monday.

Attorney David Katz, 62, misappropriated funds from his own escrow account — which held money in trust for his clients — before getting caught in 2013 and disbarred, prosecutors said.

But he and his two partners in crime, brother, Jay Katz, 68, and fellow-conspirator Eli Luski, 53, kept going, enlisting the help of other attorneys to steal more than $3 million more using a series of transfers over a 3-year stretch, prosecutors said. 

“As alleged, these defendants — one of whom was himself an attorney when much of the criminal conduct occurred — conspired to steal and launder millions of dollars from attorney escrow accounts over the course of a six-year conspiracy,” Manhattan DA Cy Vance said in a statement.

“Not only did these individuals allegedly steal from an attorney escrow account under David Katz’s control, they are also charged with recruiting other attorneys to engage in similar behavior with respect to escrow accounts controlled by those attorneys.”

Luski, who has Israeli citizenship, was ordered held without bail during a court appearance Monday.

“He is a master manipulator,” Assistant District Attorney Sarah Sacks said, referring to Luski. “This defendant has shown he is not only a con man, but has a blatant disregard for authority and rules.”

“It wasn’t enough he took himself down,” Sacks said. “Then he conspired to take others down with him.”

Luski's attorney, James Roth, declined to comment. Lawyers for the Katz brothers also declined to comment.

David Katz was ordered held on $1 million bond. Jay Katz was ordered held on $2 million bond.

The defendants are all due back in court June 2.