As Crowell & Moring continues to reel from the misconduct of one of its former employees, the law firm is making strides to amend relationships with its wronged clients.
In September, Regal Real Estate discovered that $4 million was missing from one of its escrow accounts maintained by Crowell & Moring. The discovery coincided with the resignation of Douglas Arntsen, who had been an associate at the firm since 2007. Arntsen admitted to taking some of the missing money and promised to return it. Instead, he fled to Hong Kong, where authorities arrested him on charges of first-degree grand larceny.
Regal and two other real-estate companies—Aristone Realty and BCN 16th St.—have filed lawsuits related to Arntsen’s financial misdeeds.
On Friday, a Crowell & Moring spokesperson contacted InsideCounsel to announce that the firm had reached a resolution with Regal. Following is the official statement:
We are pleased to confirm that Crowell & Moring and Regal have resolved their disputes concerning escrow funds that were diverted by Crowell & Moring’s former employee Douglas Arntsen. Crowell & Moring has fully reimbursed Regal for the escrow funds that were lost as a result of Arntsen's misconduct.
We were appalled to learn that a former employee seems to have been involved in an elaborate plot to defraud our client and his colleagues at Crowell & Moring. The alleged conduct of this former employee is in stark contrast to everything we stand for as a firm and is entirely inconsistent with the strong reputation of trust we have built among our clients over the years. We are grateful to our client Regal for their patience in this matter and are pleased finally to be in a position to honor our obligations to them through this settlement.