Martin Weisberg, a former corporate partner in the New York office of an international law firm, pleaded guilty today to one charge of money laundering and one charge of conspiracy to commit securities fraud. The money laundering charge is based on Weisberg’s theft of money from an escrow account established on behalf of one of his clients for which Weisberg served as escrow agent. The securities fraud conspiracy charge is based on Weisberg’s involvement with a fraudulent scheme in which he received kickback payments from co-conspirators in connection with the issuance of publicly traded securities by two of Weisberg’s former corporate clients. The guilty pleas arise from unrelated criminal schemes committed by Weisberg as alleged in two separate indictments. The proceedings were held before U.S. District Judge Nicholas G. Garaufis at the U.S. Courthouse in Brooklyn, New York.
The guilty pleas were announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, and Janice K. Fedarcyk, Assistant Director in Charge of the FBI’s New York Field Office.
With respect to the money laundering charge, Weisberg was engaged by a corporate client to establish a $30 million escrow account. He advised the client that the account could not earn interest for the client’s benefit. In fact, Weisberg caused the $30 million to be placed into an interest-bearing account. During a 14-month period, the account earned approximately $1.6 million in interest, and Weisberg spent approximately $1.3 million of it without the client’s knowledge. Weisberg concealed the fraud by telling his client that the bank did not send monthly account statements; Weisberg instead sent the client letters on law firm letterhead stating false account balances.
FBI press release link: here