U.S. can seize convicted ex-Hunton partner's retirement account: judge
2/17/21 REUTERS LEGAL 20:06:33
Copyright (c) 2021 Thomson Reuters
Nate Raymond
REUTERS LEGAL
February 17, 2021
The exterior of John Jospeh Moakley U.S. Courthouse, where Alec Burlakoff, former vice president of sales at Insys, appears in federal court after reaching a plea deal with prosecutors, in Boston, Massachusetts, U.S., November 28, 2018. REUTERS/Katherine Taylor
(Reuters) - A federal judge in Boston on Wednesday rejected a bid by the ex-wife of a once-fugitive former law firm partner to challenge the U.S. government's seizure of $788,290 in his retirement account after he was convicted of fraud.
The ruling concerned the only known asset of former Hunton & Williams partner Scott Wolas, who spent two decades as a fugitive avoiding charges that he helped run a $100 million pyramid scheme in New York before being arrested over a different fraud in Massachusetts.
While he was a fugitive, Wolas left behind a wife, Cecily Sturge, and a son, as well as his retirement account at Hunton & Williams, where he was a litigation partner before the investment scheme collapsed in 1996 and he fled. Hunton & Williams is now Hunton Andrews Kurth after a 2018 merger.
Wolas ran a different scam during his fugitive years in which he defrauded 24 investors in two real estate projects out of $1.9 million while living under an alias and working as a real estate agent in Quincy, Massachusetts.
A week before the scheduled close on one of the properties in September 2016, Wolas fled to Florida, where he was arrested in April 2017 at a condominium in Delray Beach that Sturge helped him rent.
He was sentenced in 2019 to 81 months in prison after pleading guilty to fraud charges. The case also led to charges against Sturge, who pleaded guilty to lying to a federal agent about whether she had been in contact with Wolas.
Federal prosecutors earlier had moved to seize Wolas' Hunton retirement account in order to compensate his victims. But Sturge challenged the forfeiture, arguing she had a valid ownership interest in the account.
Her lawyers pointed to a Florida divorce court order Sturge obtained that transferred the account to her. In seeking the order, she claimed she did not know Wolas's whereabouts and that he was dead.
In Wednesday's ruling, U.S. District Judge F. Dennis Saylor cited that false claim and Wolas' role in seeking the transfer in finding the transfer was fraudulent.
He said that Wolas made the transfer in order to hinder or defraud his creditors.
Sturge's lawyers argued that even if Saylor found the transfer was fraudulent, he should divide the retirement account between her and the government. But the judge rejected that proposal, saying she "clearly engaged in inequitable conduct."
William Fick, Sturge's attorney at Fick & Marx, declined to comment.
The case is U.S. v. Wolas, U.S. District Court, District of Massachusetts, No. 17-cr-10198.
For the United States: Carol Head of the U.S. Attorney's Office for the District of Massachusetts
For Sturge: Daniel Marx and William Fick of Fick & Marx
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