Crowell & Moring can finally catch a breath now that the litigation surrounding one of its rogue lawyers has come to an end.
Yesterday, the law firm released a joint statement with three of its former clients—Aristone Realty Capital, BCN 16th St and Regal Real Estate—saying they had settled lawsuits alleging that former Crowell & Moring associate Douglas Arntsen embezzled a total of more than $7 million from the companies’ escrow funds. The statement did not provide details of the settlements.
Arntsen joined Crowell & Moring in 2007, and in September 2011, he resigned. At about the same time, Regal discovered millions of dollars were missing from an account that Arntsen maintained. Arntsen admitted to taking some of the missing money and promised to return it, but instead, he fled to Hong Kong, where authorities arrested him on charges of first-degree grand larceny. Regal, Aristone and BCN all filed lawsuits against Crowell & Moring and Arntsen related to Arntsen’s misdeeds. Crowell & Moring settled with Regal last December, and the firm finally resolved Aristone’s and BCN’s suits yesterday.
Meanwhile, Arntsen’s defense attorney, Carter, Ledyard & Milburn Partner Alan Lewis, is working on a plea deal with prosecutors that would offer a reconciliation of his client’s assets and a recommendation of a lenient prison term. Arntsen faces up to 25 years in prison on charges of first-degree larceny and first-degree scheme to defraud. He is set to reappear in court on June 1.
For more InsideCounsel stories about Douglas Arntsen, read: