Staten Island Attorney Pleads Guilty to Fraud and Extortion Scheme

Earlier today in federal court in Brooklyn, Richard Luthmann, a Staten Island attorney, pleaded guilty to wire fraud conspiracy and extortion conspiracy before United States Magistrate Judge Ramon E. Reyes, Jr.  As part of his guilty plea, Luthmann stipulated that he obstructed justice following his arrest, by sending a threatening letter to a potential witness whom he believed was cooperating with the government and violating a court order regarding discovery materials. 

Richard P. Donoghue, United States Attorney for the Eastern District of New York, William F. Sweeney, Jr., Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Jonathan Carson, Special Agent-in-Charge, U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office (Commerce), announced the guilty plea.

Beginning in summer 2015, Luthmann, co-defendant George Padula and the victim participated in a scheme in which they contracted with overseas companies to sell and ship them containers of valuable scrap metal, but instead packed the containers with cheap filler material, such as concrete blocks.  As part of the scheme, Luthmann registered shell companies, including Omni Metal Corporation, with the New York Department of State and recruited a client of his law practice to be the nominal president of Omni.  At the direction of Luthmann and Padula, the client opened bank accounts to facilitate the fraud, and between October 2015 and December 2015, the over-seas companies wired over $500,000 to those accounts.  That money was then transferred into accounts controlled by Luthmann or a co-conspirator.

On December 5, 2016, Luthmann lured the victim to his law office, ostensibly to sign some paperwork.  Once there, Padula and co-defendant Michael Beck blocked the victim from leaving.  Beck then pulled out a firearm, aimed it at the victim’s head and knee, and claimed the victim owed him $10,000 because Beck had purchased a $7,000 debt that the victim owed Padula, plus a $3,000 “vig,” or interest payment, that Beck had added.  The victim was then permitted to leave, but not before being warned by Padula not to contact the police. 

When sentenced, Luthmann faces a maximum sentence of 20 years’ imprisonment on each count.  

Padula and Beck have previously pleaded guilty, respectively, to wire fraud conspiracy (Padula), kidnapping conspiracy (Beck), extortion conspiracy and use of a firearm in connection with a crime of violence (Padula and Beck).

The government’s case is being handled by the Office’s Organized Crime and Gangs Section.  Assistant United Attorneys Moira Kim Penza and James P. McDonald are in charge of the prosecution. 

The Defendants

RICHARD LUTHMANN
Age:  39
Staten Island, New York

GEORGE PADULA III
Age:  30
Staten Island, New York

MICHAEL BECK
Age:  60
Staten Island, New York

E.D.N.Y. Docket No. 17-CR-664 (JBW)