Bedford: John Allen Sentenced for Wire Fraud, Money Laundering

Bedford: John Allen Sentenced for Wire Fraud, Money Laundering

Bedford Attorney, John Allen Sentenced to 72 Months for Wire Fraud and Money Laundering Related to Theft of Client Funds

CONCORD (STL.News) John Allen, 63, of Bedford, New Hampshire, was sentenced to 72 months in federal prison for wire fraud and money laundering, Acting United States Attorney John J. Farley announced today.

According to court documents and statements made in court, Allen was a New Hampshire attorney who provided legal services related to, among other things, commercial real estate acquisition and development and secured lending transactions.  As an attorney in New Hampshire who handled clients’ funds, Allen was required to maintain two Interest on Lawyer Trust Accounts (commonly known as IOLTA).

From approximately January of 2014 through October of 2019, Allen engaged in a scheme to defraud several of his clients of over $2.5 million.  Allen’s clients gave him funds to hold in escrow for specific purposes, including private lending, real estate transactions, and particular business deals.  Although Allen told his clients he would hold the funds in his IOLTA for these purposes, he transferred those funds between his IOLTAs and, without authority to do so, into another bank account he controlled.  He then spent the funds on his own personal expenses and for unrelated business expenses.  All the while, he misled these clients by representing that the funds were in one of his IOLTAs or were being used for their intended purposes.

For example, Allen caused one client to invest more than $1.5 million in fraudulent promissory notes that Allen created using other persons’ identities.  Allen did not invest the money and instead kept it for himself.  Allen also stole nearly $1 million from other clients by transferring money they had provided for specific real estate transactions from his IOLTA to other accounts he controlled.  To hide the sources of the funds he stole from his clients, Allen comingled fraud proceeds and legitimate funds, made many transfers back and forth between accounts, and spent the funds in those accounts on unrelated business and personal expenses.  In total, Allen stole more than $2.5 million from his clients.

Allen pleaded guilty on November 12, 2020 and was originally scheduled to be sentenced at 10:00 am on February 25, 2021.  Allen failed to appear at his sentencing hearing.  The Court issued a warrant and investigators arrested Allen at around noon in a hotel in Manchester.  While trying to locate Allen, investigators learned that after pleading guilty to defrauding his clients, Allen stole $10,000 from his girlfriend’s father by stealing a check from his girlfriend’s father’s checkbook and writing himself a check.

Allen’s license to practice law in New Hampshire was suspended in 2019.  He was disbarred in February 2021.  In addition to his prison sentence, Allen was ordered to pay restitution and forfeit $2,561,258.15.  This restitution and forfeiture amount includes the $10,000 Allen stole after pleading guilty.

“John Allen not only stole his client’s money, but he betrayed their trust and violated his obligations as an attorney,” said Acting U.S. Attorney Farley.  “While any white collar crime is unacceptable, this defendant’s actions were particularly reprehensible because he used his status as an attorney to take advantage of his clients for his own personal benefit.  Thanks to the hard work of the FBI, we have sought justice for Allen’s victims.  This substantial prison sentence should serve as a warning to other attorneys that stealing from clients is a serious crime.”

“John Allen had no reservations about lying to his clients, doing so deliberately and repeatedly, while pocketing more than $2.4 million of their hard-earned money for his own personal use,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division.  “While we can never make his victims whole financially or emotionally, today he is being held accountable and that is some measure of justice for those he’s wronged.  Rest assured, the FBI is working hard every day to shut down schemes like this one in order to protect others from being fleeced.”

This matter was investigated by the Federal Bureau of Investigation.  The case was prosecuted by Assistant U.S. Attorney Matthew T. Hunter.

SOURCE: USDOJ.Today

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Waqar Nawaz has published content for STL.News for approximately three years. He is dedicated to publishing news released by the US Department of Justice. He actively monitors the web for fresh releases to help keep the public informed.