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Legal woes continue for firm after associate’s theft arrest

Real estate companies target Crowell & Moring, file lawsuits

Crowell & Moring’s legal troubles are far from over. About a month after one of its associates was arrested for allegedly embezzling millions, the 488-lawyer firm faces two lawsuits, with each seeking $6 million.

The international law firm has been in hot water since September, when Douglas Arntsen was arrested in Hong Kong and charged by the Manhattan District Attorney’s office for the theft of $2.5 million from Regal Real Estate, one of the firm’s clients.

The firm was then hit with a $6 million lawsuit by Regal after the arrest. On Wednesday, Aristone Realty Capital, another company represented by Crowell, amended a complaint to seek $6 million in damages, claiming Crowell, Regal and other companies produced a kickback scheme with Arntsen regarding the purchase of property in Manhattan.

Aristone originally filed a suit in May for $1 million, but in light of the arrest, added Arntsen as a defendant, made additional claims and increased the amount of lost profits. The real estate company accused Crowell of plotting “to cover up Arntsen’s malfeasance up to and before September 23, 2011 – when the real truth began to emerge following Arntsen’s arrest," said Luke McGrath of Dunnington, Bartholow & Miller, who represents Aristone, in an interview.

The Aristone case is set to reach the state Supreme Court on Oct. 24.

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