New York Attorney Convicted Of Fraud And Perjury In $5 Million Advance Fee Scheme
Schemers Used Phony HSBC Documents And Attorney Escrow Account To Dupe Lone Victim
Robert Bardey, an attorney in New York, was convicted yesterday by a federal jury in Brooklyn on all four counts of the indictment, including wire fraud and perjury, for defrauding an individual entrepreneur of $5 million through, among other things, false representations about the disbursement of funds placed in his purported escrow account and then lying in a federal grand jury. Co-defendant Theodore Sweeten pleaded guilty in June 2013 to wire fraud and was sentenced to 48 months in prison in January 2014. Co-defendant Thomas Bannon pleaded guilty in June 2014 to wire fraud and will be sentenced on November 7, 2014.
The guilty verdict was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York, and George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).
“Robert Bardey had a license to practice law, but used it instead as a license to steal. Instead of protecting clients’ deposits placed in his attorney escrow account, he stole from that account. Bardey abused his position of trust and defrauded a sole investor of $5 million, and when questioned about it in a federal grand jury, he lied under oath. This conviction sends a strong message to attorneys in positions of trust that we will vigorously pursue them and bring them to justice if they use their positions to perpetrate fraud,” stated United States Attorney Lynch. Ms. Lynch expressed her grateful appreciation to the FBI, the agency responsible for leading the government’s investigation.
Bardey, together with co-defendants Bannon and Sweeten, falsely represented to the victim, among other things, that they had access to hedge funds and wealthy investors who were willing, in exchange for a substantial fee, to “lease” funds and set up bank accounts in their clients’ names that contained the leased funds. Based on this and other misrepresentations, Bardey and his co-conspirators induced the victim to invest $5 million in order to “lease” a credit line of $100 million, which in turn would enable them to generate millions of dollars in profit through special investment programs. In furtherance of that scheme, Bardey and his co-conspirators falsely represented that the victim’s funds would be held in an attorney escrow account pending confirmation of the posting of $100 million in the leased-funds account. In fact, Bardey and his co-conspirators distributed the victim’s $5 million among themselves and falsely represented that a $100 million account had been created at HSBC by sending the victim fabricated bank documents on HSBC letterhead.
When the victim discovered that the bank documents on HSBC letterhead were phony, he requested a refund of the $5 million that he had deposited into Bardey’s attorney escrow account. In response, Bardey and his co-conspirators told the victim that the money had been disbursed to the investors who created the $100 million account. In particular, Bardey concealed from the victim the fact that he had begun withdrawing the escrowed funds for his personal use on the same day that the victim had deposited the $5 million into the escrow account.
When sentenced by United States District Judge Nina Gershon, Bardey faces a sentence of up to 20 years’ imprisonment for wire fraud conspiracy and wire fraud counts and five years’ imprisonment for the perjury count.
The government’s case is being prosecuted by Assistant United States Attorneys Jack Dennehy and Marcia M. Henry.
This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets, and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants. For more information on the task force, visit http://www.StopFraud.gov.
Residence: New York, New York
E.D.N.Y. Docket No. 12-CR-471