Virginia Lawyers Weekly

Brushing aside pleas for leniency, U.S. District Judge Claude M. Hilton this month ordered an 11-year prison sentence for a former Woodbridge lawyer blamed for stealing more than $4 million from clients and others in a “broad criminal enterprise” over the course of four years of practice.

Stephen T. Conrad, 40, of Purcellville, admitted to “settling” hundreds of claims for injured clients, forging their signatures on settlement documents, and using the settlement money for himself.

A receiver appointed in the case reported that Conrad’s defalcations totaled $4,009,402 and affected 315 clients. The Virginia State Bar reported spending more than $455,000 in expenses related to the receivership.

The prosecutor in the case argued that, beyond the financial losses, Conrad’s conduct “ruined lives.”

“Conrad engaged in a lengthy scheme to defraud a vast number of victims out of millions of dollars. He abused the trust of clients, many with life-altering injuries, leaving them without the resources to pay for treatments they received or, in numerous instances, still need,” wrote Assistant U.S. Attorney Timothy D. Belevetz.

Conrad’s arrest and prosecution left a complex tangle of unresolved claims and unhappy clients for attorney Richard S. Mendelson, appointed to serve as receiver for Conrad’s law practice. Virginia State Bar Counsel Edward L. Davis said, “It was the most complicated case I had ever seen.”

“The biggest problem was the very large number of clients who were suddenly without a lawyer,” Mendelson said. “I’ve been a receiver in many other instances. I haven’t had one with this many clients in similar circumstances. I would say this one is particularly egregious.”

On behalf of the bar, VSB President Manuel A. Capsalis wrote to Belevetz to urge a substantial sentence. “I strongly believe the Court at sentencing should be informed not only of the devastation which Mr. Conrad has wrought upon his clients, but also of the harm – beyond shame to our profession – which this one former member of the Bar, via his broad criminal enterprise, inflicted upon his attorney colleagues and the legal profession.”

Capsalis noted that the Conrad receivership in nine months consumed twice the bar’s budget for all receiverships for the fiscal year. Moreover, Capsalis wrote that it was “certainly probable” that the bar’s clients’ protection fund would sustain a loss of $400,000 from awards to Conrad’s former clients.

A sentencing brief filed by Conrad’s lawyer sheds only a little light on what led to such a pervasive pattern of dishonest dealing.
“Mr. Conrad became overwhelmed with financial obligations that he could never satisfy,” wrote public defender Michael S. Nachmanoff. “He also succumbed to addictions to gambling and prescription drugs which clouded his judgment. He took from his clients, all while maintaining the vain hope that he would be able to pay all of his clients back with the resolution of one large case.”

In addition to the 11-year prison term for Conrad, Judge Hilton imposed a three-year period of probation and ordered payment of restitution.

Also this month, a former Henrico County attorney was sentenced to two years in prison for embezzling more than $500,000 from client trust accounts. Michael D. Hancock, 51, of Mechanicsville, reportedly took client funds to cover office expenses and was never able to pay it back. He was sentenced Nov. 18 by Henrico County Circuit Judge George F. Tidey.

In Christiansburg, former attorney Gerard Marks pleaded guilty Nov. 13 to forgery in a deal he hopes will limit his prison time to two years. Marks admitted providing his clients with false legal documents, including property easements, divorce decrees, and adoption orders.

In exchange for Marks’ plea, special prosecutor Joel Branscomb dropped a number of charges and agreed to recommend that Marks serve no more than two years in prison.

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