RI Feds Score Guilty Plea From Now-Disbarred Closing Attorney In $600K Escrow Ripoff; Loot Intended To Pay Off Existing Liens In Mortgage Refinancings

From the Office of the U.S. Attorney (Providence, Rhode Island):

• A former Rhode Island and Massachusetts mortgage attorney pleaded guilty in U.S. District Court in Providence [] to defrauding mortgage holders and lending institutions of more than $600,000. David L. Spector, 52, of Needham, Mass., admitted that he used the funds to operate a Ponzi scheme.

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• Spector pleaded guilty to three counts of wire fraud and one count of money laundering. He faces up to 70 years in federal prison followed by up to 3 years of supervised release, and a fine of up to $1,000,000 [...].
  
• Spector admitted to the court that between April and October 2007, he conducted real estate mortgage refinance closings for properties in Plymouth and Lawrence, Mass., and Westerly, R.I. As part of the closing process, Spector had the proceeds of the mortgages obtained by his clients transferred to his attorney escrow account for the purpose of redistributing the funds to pay off existing mortgages and other costs associated with the closings.
  
• Spector admitted that rather than properly distribute the funds, he used $601,962 to run a Ponzi scheme to pay his personal expenses and to pay off previous mortgages the he had failed to pay off.
  
• Spector admitted that in order to keep his victims from learning of his scheme, he filed change of address forms with the mortgage companies that had not been paid off so that the bills would go to a post office box that he controlled.(1)

For the U.S. Attorney press release, see Former attorney pleads guilty to fraud and money laundering (Former mortgage attorney’s Ponzi scheme defrauded banks and customers of more than $600,000).
(1) The Rhode Island Bar Association's Client Reimbursement Fund was established to provide a public service and to promote confidence in the administration of justice and the integrity of the legal profession by providing some measure of reimbursement to victims who have lost money or property because of theft or misappropriation by a Rhode Island attorney, and occurring in Rhode Island during the course of a client-attorney relationship.

For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:

• Directory Of Lawyers' Funds For Client Protection (now includes Canadian recovery funds, courtesy of the American Bar Association);
• Check the USA Client Protection Funds Map;
• Check the Canada Client Protection Funds Map.

Maps available courtesy of The National Client Protection Organization, Inc.