FORMER ATTORNEY PLEADS GUILTY TO $800,000 MAIL FRAUD
AGAINST CLIENTS AND TRUST BENEFICIARIES
Ken Hoesch also admits making false statement on federal tax return.
GRAND RAPIDS, MICHIGAN – Ken Hoesch, age 59, formerly an attorney in Zeeland, Michigan, entered guilty pleas to mail fraud and a felony tax offense in a hearing before U.S. District Court Judge Robert J. Jonker. The charges to which Hoesch pleaded guilty stem from an investigation into his embezzlement from trusts and trust accounts he controlled as an attorney on behalf of clients and his failure to report this ill-gotten income on his taxes.
U.S. Attorney Patrick Miles was joined in the announcement of the guilty plea by Special Agent in Charge Erick Martinez, Internal Revenue Service (IRS) Criminal Investigation Division.
In the course of affirming his office’s commitment to protect the integrity of the United States Treasury and to vigorously pursue all tax cheats, U.S. Attorney Miles noted the particular outrage of Hoesch’s crimes. “As a member of the State Bar, Hoesch took an oath to serve his clients loyally and honestly. He violated that oath and victimized vulnerable members of society in the process.”
According to court records, during 2006 through 2010 tax years, Hoesch worked as an
attorney specializing in trusts and estates law. During this time period, Hoesch stole over
$800,000 from his clients and trust beneficiaries and purposely falsified his federal income tax
return when reporting his income. Of the $800,000 Hoesch stole, over $304,000 was embezzled
directly from trust accounts intended for beneficiaries such as the American Cancer Society. His
victim clients include the elderly and even the deceased who could no longer complain that their
wishes and instructions were not being followed. The remaining amount of over $497,000 was
stolen through an Interest on Lawyers Trust Account (IOLTA) controlled by Hoesch. IOLTAs
are a standard type of account where, for example, monies to be directed to clients or
beneficiaries are held pending disbursement. Because he did not report to the IRS the income
that he had stolen from his clients and beneficiaries, Hoesch knew his tax return was not correct.In sum, Hoesch failed to pay over $200,000 in tax due and owing to the IRS.
“Kenneth Hoesch stole from his clients’ trust accounts. He embezzled money from the elderly and denied money to the rightful and deserving beneficiaries,” said Special Agent in Charge Erick Martinez.
Hoesch faces a maximum criminal penalty on the mail fraud offense of twenty years’ imprisonment, a term of supervised release of three years, restitution of over $800,000, a fine of $250,000 and a mandatory special assessment of $100. On the tax offense (the making of a false statement on a tax return), Mr. Hoesch faces a maximum criminal penalty of three years’ imprisonment, a term of supervised release of one year, restitution to the IRS, a fine of $100,000 and a mandatory special assessment of $100.
This case was jointly investigated by the Ottawa County Sheriff’s Department, the United States Secret Service, the United States Postal Inspection Service and the Criminal Investigation Division of the Internal Revenue Service.
The case has not yet been scheduled for sentencing..