June 29, 2018 / 11:38 PM / 4 months ago

Former fugitive ex-lawyer pleads guilty to U.S. fraud scheme

BOSTON (Reuters) - A former partner at a major U.S. law firm who spent two decades as a fugitive while avoiding charges that he ran a fraudulent investment scheme pleaded guilty on Friday to having carried out a different scam while living in Massachusetts under an alias.

Scott Wolas, 69, pleaded guilty in Boston federal court to defrauding 20 investors in two real estate projects out of $1.7 million while he was using someone else’s identity.

He faces a mandatory minimum sentence of two years in prison after pleading guilty to 10 counts that included wire fraud and aggravated identity theft. He is scheduled to be sentenced on Oct. 2.

The plea capped years of investigations of Wolas, who in the 1990s was a litigator in the New York office of Hunton & Williams, one of the country’s largest law firms.

He disappeared amid claims he defrauded investors who had poured tens of millions of dollars into a fraudulent liquor exporting scheme, which became the basis of a 1997 indictment in New York charging him with fraud and grand larceny.

Authorities said Wolas went to Florida, where he became a broker with Securities America Inc while utilizing a college roommate’s name.

In 2001, amid complaints by investors that he had stolen their money, the Federal Bureau of Investigation obtained a warrant for Wolas’ arrest, according to court papers.

By then, Wolas had gone to Massachusetts, where he lived under various names, including that of a man he knew in Florida, Eugene Grathwohl, whose records, birth certificate and military discharge papers Wolas had stolen, prosecutors said.

Under Grathwohl’s name, Wolas worked as a licensed real estate agent. In that role, prosecutors said, Wolas from 2014 to 2016 collected the $1.7 million from the investors that he largely used for personal expenses.

A week before the scheduled close on one of the properties in September 2016, Wolas disappeared, prosecutors said.

He was arrested in April 2017 at a condominium in Delray Beach, Florida, that his ex-wife helped him rent, prosecutors said.

Assistant U.S. Attorney Sandra Bower on Friday said in court that Wolas told a federal agent after he was arrested that he fled because he was “concerned if there was a probe into his identity that it would all ‘come down like a house of cards.’”

Reporting by Nate Raymond in Boston; Editing by Dan Grebler

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