Stealing $335K From Dead Client's Estate Among Allegations Facing Now-Disbarred NC Lawyer Accused Of Fleecing Six Clients Of $600K+

In Moore County, North Carolina, The Pilot reports:

• A Moore County grand jury has indicted former Pinehurst attorney and Moore County Board of Education member Lu Pendleton “Penny” Hayes for felony embezzlement of more than $607,000 and related charges. The indictments stemmed from an investigation by the State Bureau of Investigation. [...]
  
  Hayes, who was disbarred by the North Carolina Bar in October of 2014, was indicted on five counts of felony embezzlement, three counts of forgery of instrument, four counts of uttering forged instrument, counterfeiting of instrument, and four counts of obtaining property by false pretense.
  
  ***
  The indictments are related to incidents that allegedly occurred between November 2011 and March 2014 and affected six individuals or their estates.
  
  In four indictments for embezzlement, the grand jury found that Hayes “unlawfully, willfully and feloniously did embezzle, fraudulently and knowingly misapply and convert to her own use” $335,843.64 from the estate of Joseph George Wilson between October 2012 and March 2013 and another $213,712.76 from Andrea Fabiana Ale between March 12, 2014 and March 17, 2014.
  
  Both are “Class C” felonies and carry a prison sentence between 44 to 182 months each.
  
  Hayes also faces three “Class H” felonies for embezzlement of additional funds totaling $58,283.57 from other clients. Class H felonies carry a possible prison sentence of 4 to 25 months.
  
  The other charges against Hayes are all “Class I” felonies and carry a possible prison term of 3 to 12 months.
  
  ***
  Hayes was disbarred after she acknowledged misappropriating more than $400,000 in entrusted funds and engaging in fraudulent bank transactions. That action came seven months after the state bar took action against Hayes, forbidding her from serving as an attorney-in-fact, escrow agent, settlement agent, trustee, executor, personal representative or in any other fiduciary capacity.
  
  She was also forbidden from accepting an further funds from clients or third parties in a fiduciary capacity, withdrawing any funds from and/or writing any checks against any account into which a client deposited money, and directing others to withdraw money or write a check against any account into which funds had been deposited until permitted by order of the court.
  
  The organization’s case file against Hayes detailing the infractions in not public record.
  
  Disbarment means Hayes is no longer licensed to practice law in North Carolina.
  
  Hayes previously served one four-year term on the Moore County School Board beginning in 2000.
  
  Prior to the actions against her, Hayes had been licensed to practice law in North Carolina since 1984. She abruptly “retired” in mid-March 2014, and the court appointed a local attorney to serve as a trustee of Hayes’ practice.

Source: Former Attorney Charged With Embezzlement.

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(1) The Client Security Fund was established by the North Carolina Supreme Court with its purpose being to reimburse, in whole or in part in appropriate cases and subject to the provisions and limitations of the Supreme Court's orders and State Bar rules, clients who have suffered financial loss as the result of dishonest conduct of lawyers engaged in the private practice of law in North Carolina.

For attorney escrow funds/trust account ripoffs, generally, see:

• N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;
  
  When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),
  
  Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.

For similar "attorney ripoff reimbursement funds" that attempt to clean up 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 a listing for Canadian client protection 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.