A disbarred Queens lawyer who defrauded real estate clients out of millions of dollars for gambling and personal expenses pleaded guilty last week to wire fraud in federal court in Brooklyn.
The charges against Hyun W. Lee, also known as Michael Lee, stem from his involvement in a scheme to withdraw funds held in attorney escrow accounts from clients, according to a press release from the U.S. Attorney’s Office.
Lee, who entered the plea before U.S. District Judge Pamela K. Chen, could face up to 20 years in prison. As part of his plea deal, he promised to forfeit a staggering $3.27 million.
U.S. Attorney Breon Peace said Lee exploited members of the Korean American community while posing as a licensed attorney despite being suspended and disbarred.
Mr. Lee’s actions included the misappropriation of millions of dollars that were entrusted to him for safekeeping.
According to court documents and statements made during the judicial proceeding, Lee deceived clients and counterparties into depositing funds for real estate transactions, falsely promising that the funds would be released from escrow accounts.
In reality, he diverted these funds to personal uses, such as gambling at casinos and defraying expenses at restaurants in which he had a partial ownership interest.
Additionally, Mr. Lee falsely represented himself as a licensed attorney in real estate transactions even though he lost his right to practice law in New York due to his suspension and subsequent disbarment.
To perpetuate this scheme, Mr. Lee fabricated documents that misled customers about the safety of funds in escrow accounts. Documents presented showed a balance of nearly $3 million, but the actual amount was reduced to about $25,000. Despite already depleting the account, Mr. Lee falsely claimed that efforts were ongoing to fairly distribute the remaining funds and consistently failed to respond to requests for the release of funds. Ta.
Sometimes New York real estate lawyers do terrible things.
In September, 44-year-old New York-based attorney Robert Wisnicki used his law firms, Wisnicki & Associates LLP and Wisnicki Neuhauser LLP, to guide investors into buying real estate. Pleaded guilty to concealing proceeds of health care fraud. , according to a press release from the U.S. Attorney’s Office.
Each of these charges carries a maximum penalty of five years in prison. As part of the plea agreement, Wisnicki agreed to pay $18.8 million in restitution.
In Ponzi schemes, Wisnicki Law Firm specialized in real estate transactions. He started his real estate investment business in 2007 and existing customers, called “investor clients”, entrusted their funds to him.
Wisnicki identified real estate investment opportunities for clients and represented them in resulting transactions.
But when the customers started losing money, instead of letting them know, Wisnicki used funds from other customers kept in trust accounts to cover up the losses. He falsely assured customers that their funds were still safe, even though he transferred his funds to other customers.
In addition, Wisnicki used funds from new customers to repay previous customers and misled customers about the purpose of their investments. The fraud continued through at least 2022 and resulted in approximately $18.8 million in debt for customers.