Former Fayette County prosecutor admits to stealing $242k from law clients - Pittsburgh Post-Gazette
A former assistant district attorney and private lawyer in Fayette County charged in 2019 with state drug offenses were charged Monday in federal court with stealing $242,000 of his clients' money over a four-year period, which authorities said he eventually repaid after securing personal loans.
John William Eddy, 39, has signed a plea agreement with the U.S. attorney's office in Harrisburg under which he will waive indictment by a grand jury and enter a plea to a criminal information charging him with wire fraud for misappropriating funds between 2016 and 2020.
No date has been set for the plea hearing.
Criminal information is typically filed by federal prosecutors when someone has cooperated in an investigation, allowing them to bypass the usual grand jury procedure.
Eddy, a former prosecutor and former solicitor for Uniontown as well as a private attorney running Eddy Law Office, was required, like all lawyers, to maintain an Interest on Lawyer Trust Account to secure client funds from legal services, fees for services not yet performed and money for court fees.
According to the FBI and the U.S. attorney's office in Harrisburg, Eddy stole money from the family of a woman who died in a car crash and also stole from a variety of other clients, then obtained loans to repay those he defrauded after his arrest on state DUI and drug charges in June 2019.
Eddy had been retained in 2016 by the executor of the estate for a woman identified in court papers only as D.B.F., who died following a car crash in 2015. His role was to represent the estate in its pursuit of a personal injury claim resulting from the crash that killed DBF, with Eddy to receive a third of any money recovered from the suit, according to the criminal information.
Eddy settled the case for $100,000 and put the money in his IOLTA account on June 27, 2016. The following month, he paid himself about $33,000 and paid the executor $15,000 for her fees. Eddy was entrusted with about $51,000 on behalf of the estate, but a dispute then arose with the state over more than $10,000 in taxes owed by the estate.
Eddy appealed the amount in June 2017 and the Department responded that it might take six months to resolve the issue. In September 2017 Eddy forwarded the response to BF, the son of DBF, and issued a payment of about half the money due to the estate from the court settlement.
In 2018, according to the information, the state Supreme Court's disciplinary board sent Eddy a letter requesting an answer to a complaint made by a former client.
Eddy said in response that he had "not maintained proper bookkeeping records or monthly reconciliations for individual clients' funds," according to the information.
Prosecutors said that his IOLTA account was out of balance because he had stolen client money for personal use. The deficit was initially $6,000 less than the amount entrusted and grew steadily over the years as he stole more.
When BF contacted Eddy to ask when he could get the rest of his family's money, Eddy told him that certain "tax issues" had to be resolved first, according to the information.
BF sent an email on May 31, 2019, asking about the status of the tax dispute and Eddy said he was waiting for "one final approval" and he would then send a check.
State police arrested him a few days later on charges of DUI and drug possession. In that case, troopers said they were surveilling a bar in Uniontown and saw a drug deal in the early morning of June 4 in which Eddy sold cocaine to another man. According to court papers, Eddy was representing the man in an unrelated case.
From the time of that arrest, federal prosecutors said, Eddy received a series of personal loans, which he used to repay his clients a total of $242,975.
Among those payments was $26,156 to the DBF estate.
The case was prosecuted in Harrisburg because the U.S. attorney's office in Pittsburgh recused.
First Published January 10, 2022, 1:16pm
source: https://www.post-gazette.com/news/crime-courts/2022/01/10/Former-Fayette-County-prosecutor-admits-to-stealing-242k-from-law-clients/stories/202201100119
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