Press Release: Three Men Charged by Manhattan D.A. with Conspiring to Steal and Launder $5 Million from Attorney Escrow Accounts
Who: Eli Luski, Jay Katz and David Katz, the defendants
What: The defendants were indicted by the Manhattan District Attorney’s Office with several counts of Grand Larceny in the Second Degree and Conspiracy in the Fourth Degree. These charges carry sentences that range from 4 years to 5-15 years in prison.
Luski and Katz were additionally charged with Money Laundering in the First and Second Degrees, and Residential Mortgage Fraud in the Second Degree. These charges carry sentences of up to 15 years and 25 years in prison.
Where: New York, New York
When: The crimes allegedly happened between about January 2010 to February 2016.
Why: The defendants, one of whom was a former attorney (David Katz), are accused of stealing and laundering $5 million from attorney escrow accounts (escrow accounts contain funds that attorneys hold in trust for their clients and others).
How: In the beginning of this alleged crime, David Katz, while he was still an attorney, moved over $900,000 from his own attorney escrow account to Luski. Katz was later disbarred from practicing law for similar conduct.
David Katz, Jay Katz and Eli Luski then enlisted other attorneys to transfer funds from their own attorney escrow accounts to the defendants’ personal and business accounts, as well as to third parties on behalf of the defendants.
Of the total funds stolen, $500,000 was stolen from an escrow account that a Court expressly ordered the attorney to hold on behalf of a client with dementia.
Once they received the funds, Luski and Jay Katz laundered over $1 million through check cashing businesses and through one of Jay Katz’ realty companies.
Many of the funds were used to fund the defendants’ personal living expenses, including millions of dollars in credit card payments and the purchase of a home in New Jersey.
Luski and Jay Katz have also been charged for defrauding the mortgage company they used to finance the purchase of that home because they provided false information regarding the source of the funds as well as Luski’s assets and financial condition.