Manhattan District Attorney Cyrus R. Vance, Jr., today announced the guilty plea of attorney DOUGLAS ARNTSEN, 34, to embezzling more than $10 million dollars from two clients of the Manhattan law firm Crowell & Moring LLP, where the defendant was employed. The defendant pleaded guilty to three counts of Grand Larceny in the First Degree, and one count of Scheme to Defraud in the First Degree. The defendant is expected to be sentenced on October 17, 2012.
“The trust between attorney and client is sacred,” said District Attorney Vance. “This defendant utterly betrayed that trust by stealing large amounts of money from his clients before fleeing to Hong Kong. Today’s conviction holds him accountable for fraudulent conduct that violated the law, abused his clients’ trust, and cost them millions of dollars.”
According to documents filed in court, ARNTSEN was an attorney at Crowell & Moring between February 2007 and September 2011. During this period, Doina Capital (“Doina”), an investment fund, employed ARNTSEN to do its legal work. In early 2009, ARNTSEN began transferring millions of dollars of Doina’s escrow funds into accounts that he opened and controlled without his client’s knowledge. Then he began using the funds to support a lavish lifestyle that included visits to expensive restaurants, sporting events, and strip clubs. ARNTSEN also used the money to purchase businesses for himself, friends, and family members.
In spring 2010, ARNTSEN began to steal from a second client, Regal Real Estate, LLC (“Regal”), a real estate management company, to cover the shortfalls he created by his thefts from Doina and to continue funding his lifestyle. ARNTSEN embezzled more than $7 million of Regal’s money, moving the money into additional bank accounts that he set up for that purpose.
On September 13, 2011, a Regal employee confronted ARNTSEN about millions of dollars of missing escrow money. Although ARNTSEN was originally scheduled to fly to Hong Kong out of New York, in order to evade arrest he drove to Philadelphia that evening and flew to Hong Kong, where he was later arrested and extradited to the United States.
Assistant District Attorney Sophi K. Jacobs, Senior Investigative Counsel Richard Buckheit, and Senior Investigative Counsel Richard Gary J. Galperin of the Rackets Bureau handled the case under the supervision of Assistant District Attorney Daniel Brownell, Chief of the Rackets Bureau; Daniel Cort, Chief of the Public Integrity Unit; and Executive Assistant District Attorney Adam S. Kaufmann, Chief of the Investigation Division. Supervising Financial Investigator Matthew Paul and Trial Preparation Assistants Michael S. Taddei and Quentin Morgan provided valuable assistance with the investigation, as did Senior Rackets Investigators Reginald Barometre, James Fenrich and Rackets Investigator Jonathan Reid, under the supervision of Chief Investigator Walter Alexander. Assistant District Attorney Madeleine Guilmain is handling the asset forfeiture aspect of the case, under the supervision of Assistant District Attorney Duncan Levin, Chief of the Asset Forfeiture Unit.
District Attorney Vance thanked the U.S. Department of Justice’s Office of International Affairs, the U.S. Marshals Service, the U.S. Department of State, and officials in the People’s Republic of China for their assistance.
DOUGLAS ARNTSEN, D.O.B. 12/6/77
Staten Island, NY