CONCORD – John Allen, 63, of Bedford, New Hampshire, pleaded guilty in federal court to wire fraud and money laundering, United States Attorney Scott W. Murray announced Thursday.
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 $2.4 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 at least $2,426,258 from his clients.
Allen is scheduled to be sentenced on February 25, 2021. His license to practice law in New Hampshire was suspended in 2019.
“When clients come to an attorney seeking assistance, they place their trust in that attorney,” said U.S. Attorney Murray. “John Allen betrayed that trust, took advantage of his clients, and stole their money. These are the actions of a white collar criminal rather than a dedicated counselor at law. Accordingly, John Allen is being prosecuted for wire fraud and money laundering. To protect the public and seek justice for victims, we work closely with the FBI and all of our law enforcement partners to identify and prosecute white collar criminals who steal money from clients.”
Today, John Allen finally accepted the blame for betraying his clients’ trust and lying to them, claiming he had more than $2.4 million of their hard-earned money safely tucked away, when in reality he was bleeding them dry to make up for his own bad business decisions,” said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. “This is a teachable moment for anyone who thinks they can take advantage of their position for personal gain. Don’t do it, because the FBI will do everything in our power to ensure you will be held accountable.”
This matter was investigated by the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Matthew T. Hunter.