EVERETT ATTORNEY SENTENCED FOR DEFRAUDING CLIENTS
Lied to His Clients, Taking more than $400,000
BARRY HAMMER, 62 , an attorney who practiced in Snohomish County, Washington was sentenced today in U.S. District Court in Seattle to three years in prison, three years of supervised release and 250 hours of community service for Wire Fraud. HAMMER will also have to pay hundreds of thousands of dollars in restitution -- the exact amount will be determined next month. At sentencing U.S. District Judge Marsha J. Pechman told HAMMER “the appearances of being successful were so important to you that you kept getting in deeper and deeper and ignored the red flags.” Judge Pechman said HAMMER had abused his clients while being in a position of trust.
According to records filed in the case, from about October 2002, until August 2004, HAMMER convinced clients of his law practice to invest with him in various properties, but HAMMER failed to disclose the risks involved. HAMMER told various clients that if they released their security interest on certain real estate, it would be replaced with another security interest. That didn’t happen, and in fact HAMMER used the proceeds from the sale of the property for his own interests. HAMMER made false statements to the clients and used money from later client/investors to repay earlier investors. For example, HAMMER convinced one long time client to invest more than $300,000 from an inheritance with him. HAMMER used the money to pay off earlier investors, and the client lost the entire investment. HAMMER convinced a second client to invest in real estate with him, but after he sold the real estate never paid any proceeds to the investor. HAMMER convinced a third client to invest nearly $700,000 of an inheritance with him, and misled the client about the risks of the investment.
In asking the court to impose prison time, prosecutors stated HAMMER “knew how much many of his clients and investors were depending on the funds they entrusted to him; nonetheless, he recklessly put their money at risk and ultimately lost most of it without performing his most basic obligations as a lawyer and in some cases going so far as to lie to his clients about whether their investments were secured by property.”
“It is important for investors to investigate before investing,” said Michael Stevenson, Director of the Department of Financial Institution’s Securities Division. “Even when investing with someone they trust, it is good to get a second opinion from an independent source.”
The case was investigated by the Washington State Department of Financial Institutions (DFI) and the FBI.
The case was prosecuted by Assistant United States Attorney Mark Parrent.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.