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Press Release

Brooklyn Attorney Convicted Of Conspiracy To Obstruct A Federal Proceeding

For Immediate Release
U.S. Attorney's Office, Eastern District of New York
Defendant Schemed to Help Client Obstruct Enforcement of Restitution and Forfeiture Order

Lydia Hills, an attorney admitted to practice in the state of New York since 2011, was convicted today by a federal jury in Brooklyn of obstructing an official proceeding, and conspiring to do the same.  Specifically, Hills attempted to influence the U.S. Attorney’s Office for the Southern District of New York (USAO-SDNY) to remove a lien on her client’s real properties by misrepresenting that the properties would be sold and that the client would not receive any proceeds from the sale.  The verdict followed a three-day trial before United States District Judge I. Leo Glasser.  When sentenced, Hills faces up to 20 years’ imprisonment on each count of the indictment.

Richard P. Donoghue, United States Attorney for the Eastern District of New York, and William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the verdict.   

“As proved at trial, Hills violated her oath as an attorney by participating in a corrupt scheme to impede the collection of forfeiture and restitution owed to the government by her client,” stated United States Attorney Donoghue.  “Today’s verdict holds her responsible for attempting to undermine the laws she was sworn to uphold, and serves as a message to others that this Office will not tolerate such conduct.”

“When the government imposes a restitution and forfeiture agreement in response to a crime that’s been committed, the best course of action is to pay up.  In this case, Lydia Hills masterminded a scheme so her client could skirt the system. At one point, Hills expressed concerns about the deal that was about to go down.  As evidenced by today’s conviction, she had every reason to fear the inevitable outcome,” stated FBI Assistant Director-in-Charge Sweeney.

Hills’ client was convicted in 2010 in federal court in the SDNY of conspiracy to commit wire fraud and bank fraud.  The client was sentenced to 70 months’ imprisonment and ordered to pay more than $4.9 million in restitution (the Judgment) and more than $13.5 million in forfeiture (the Forfeiture Order).  The USAO-SDNY filed a lien against four properties in Queens, New York, to prevent Hill’s client from selling the properties without first satisfying the Judgment and Forfeiture Order.

Hills, who was also a licensed as a real estate broker, subsequently represented the client in a mortgage “short sale” of the properties.  In a short sale, the mortgage holder can pay off the mortgage with the proceeds of the short sale, but the mortgager does not receive any of the proceeds.  During March and April 2016, Hills conspired with her client to sell the four properties in a transaction where the client would receive the sales proceeds in a hidden cash transaction and conceal it from the USAO-SDNY, which was entitled to the proceeds to partially satisfy the Judgment and Forfeiture Order.  On March 15, 2016, Hills faxed a letter to the USAO-SDNY requesting that the lien be released in order to proceed with the sale, falsely representing that the client would not receive any financial benefit from the short sale. However, on April 6, 2016, Hills, the client and the buyer met at the closing, and the buyer gave Hills a bag containing $33,100 in cash, representing $25,000 for one property and Hills’ broker fee of $8,100.  At the closing, which was recorded by FBI agents, Hills told the buyer with regard to her client, “I’m afraid.  I’m an attorney… I don’t want her to say something… The wrong thing on the phone one day and it’s being recorded and I’m screwed.”

The government’s case is being handled by the Office’s Public Integrity Section.  Assistant United States Attorneys Martin E. Coffey and Alexander Mindlin are in charge of the prosecution.

The Defendant:

Age:  38
Brooklyn, New York

E.D.N.Y. Docket No. 16-cr-204 (ILG)


John Marzulli
Tyler Daniels
United States Attorney’s Office
(718) 254-6323

Updated March 20, 2019