Lawyer Faces Prison for $55m Stock Fraud

by jimloxley on June 11, 2012

  • SumoMe

A former lawyer from Baker and McKenzie, Martin Weisberg, is facing a 15 year jail sentence for a role which he played in part of a $55 million stock fraud which is supposed to have taken place whilst the man was working for the now-liquidised Jenkins & Gilchrist law firm. Reuters reported that the man pleaded guilty to his part in conspiring to commit the stock fraud in addition to the charges of money laundering, meaning he was ultimately involved in a number criminal indictments. At the plea hearing, Martin Weisberg stated to US District Judge  Nicholas Garaufis that he deeply regretted his actions and also that they were both wrong morally and a violation of the law.

Mr Weisberg was first indicted back in 2007 after he was accused of conspiring with officers who worked for two other companies, Ramp Corp and Xybernaut Corp,in order to commit the stock fraud scheme which would have illegally earned them $55 million. At the time, the conspiracy took place, Mr Weisberg was working for a law firm which is now defunct, Jenkens & Gilchrist Parker Chapin. Mr Weisberg, who is now 61 years of age, and the legal team representing him declined to make a comment on the legal proceedings at this stage. The most recent hearing took place at the Federal Court in Brooklyn.

When Mr Weisberg is finally sentenced later this year on September 14th, it’s expected that he will be facing a 15-year prison sentence in compensation for his crimes. The second indictment that Mr Weisberg faced was on year after the first, in 2008. The man was accused of siphoning off $1.6 million dollars in interest from escrow accounts owned by clients. At that stage, he was working for a law firm also in New York, Baker and McKenzie, which he had joined back in 2005. At the court hearing, prosecutors stated that this second indictment took place when Mr Weisberg was the agent in charge of an account worth $30 million for Siam Capital Management Inc and two of its affiliated entities. Mr Weisberg is supposed to have placed on the money into an interest-bearing account, but failed to tell the clients and ultimately ended up spending $1.3 million in interest on himself.


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