Statement Of The United States Attorney Concerning United States V. Anthony J. Lupas, Jr., 3:CR-12-114
In 2012 Lupas, a long time prominent Wilkes-Barre attorney and school district solicitor, was taken into custody by federal agents and then indicted for mail fraud and conspiracy by a federal grand jury. The initial indictment, and a superceding one, alleged that Lupas, since at least 2006, carried out a scheme to defraud clients by soliciting them to enter into trust agreements with him for investment purposes. Lupas promised to hold the money in an account with a minimum of 7% interest tax-free for the benefit of the clients and their heirs.
The charges alleged that the agreements were a massive fraud and that Lupas knowingly and intentionally betrayed the trust placed in him by taking and using the money for his own purposes and benefit. Lupas pleaded not guilty and, on his behalf, a claim of incompetency was raised with the court.
After examinations of Lupas by doctors and a competency hearing in 2013, U.S. District Court Judge Robert D. Mariani ordered that Lupas be committed to the custody of the Attorney General to receive further treatment pursuant to the governing statute. In June 2014, physicians at the U.S. Bureau Of Prisons facility at Butner, North Carolina, issued a report stating that Lupas was suffering from a mental disease or defect rendering him incompetent to stand trial and there was a strong probably that his competency will not be restored in the foreseeable future. The details of the report are included in a Motion to Dismiss the Superceding Indictment Without Prejudice filed by the Government on August 4, 2014.
In its motion, the government stated:
No additional facts can be provided at this time in support of maintaining the criminal charges against the defendant. The defendant is 80 years old. Multiple mental health experts and this Court have determined that the defendant is not competent to stand trial, and that there is no substantial probability that his competency will be restored in the foreseeable future. As such, the Government is left with no other alternative but to move this Court to dismiss the pending criminal matter against the defendant, Anthony J. Lupas, Jr., without prejudice.
WHEREFORE, for the foregoing reasons, the Government respectfully requests that the pending charges against the defendant be dismissed without prejudice.
Yesterday, Judge Mariani filed an Order granting the government’s motion to dismiss without prejudice and directed that Lupas be release from the Butner facility.
The government regrets that the prosecution of the case will not be able to go forward. However, under the law, no defendant can be put on trial after he has been found incompetent.
The allegations were extremely serious and many trusting people were deceived and grievously hurt through a pattern of deceit and dishonesty. During the investigation, agents obtained, by search warrant and/or with consent, client records from Lupas’ former law firm and seized, or discovered, funds that maybe subject to further legal action by the government or the victims to obtain at least partial restitution.
Within the next few days, our Victim-Witness Unit will soon provide information, by mail and through our website, to the victims concerning what they can do and what steps they should follow to obtain their particular client files and to seek any funds, accounts and assets that may be subject to restitution.
We appreciate the efforts of lawyers for the victims in this case to expose this long-running fraud and to help their clients recover their money. We also note the action taken by the Pennsylvania Supreme Court and the Pennsylvania Crime Victims Fund to help recover at least a portion of the losses.
This is not the only time in the past year that massive fraud against clients by trusted lawyers has been uncovered in this federal district. Most lawyers act honestly and responsibly in the handling of their clients’ funds. Obviously there was a major failure here. I urge the legal community and, in view of this case, especially the legal community in Northeastern Pennsylvania, to do everything in its power to prevent a repetition of this conduct.
Such efforts could include more education and outreach, fostering greater awareness of investment fraud schemes and establishing reasonable and appropriate limits, oversight and disclosure requirements concerning investment activities on the part of lawyers using client funds.