Ex-BigLaw attorney once 'consumed with remorse' over $10M client theft sentenced in new scheme
Disbarred lawyer Douglas Raymond Arntsen, 45, of Staten Island, New York City, was sentenced to nine years in prison Tuesday after pleading guilty in a scheme to defraud the government out of $1.4 million in COVID-19 relief funds. (Image from Shutterstock)
A disbarred New York lawyer who served time for stealing $10.7 million from clients is facing more prison time after pleading guilty in a scheme to defraud the government out of $1.4 million in COVID-19 relief funds.
Douglas Raymond Arntsen, 45, of Staten Island, New York City, was sentenced to nine years in prison Tuesday for his scheme to defraud the Small Business Administration out of relief money through its Economic Injury Disaster Loan Program, according to a May 21 press release, Law360 and Reuters.
He was also sentenced to three years of supervised release, ordered to pay restitution of $1.43 million and ordered to forfeit the same amount.
Arntsen recruited others to submit false loan applications claiming that they owned businesses with substantial revenue, according to the U.S. attorney’s office for the Southern District of New York. Often, the applicants had no connections to the named businesses at all.
Some of the people recruited by Arntsen trusted him because they thought that he was still a lawyer, prosecutors say.
Arntsen, a former Crowell & Moring associate, had told a judge in 2012 that he was “consumed with remorse” for the client theft before he was sentenced to four to 12 years in prison.
According to a March 2013 disbarment order, Arntsen had transferred escrow-account money belonging to two corporate clients into accounts that he personally controlled.
Law360 had coverage of the latest sentencing hearing Tuesday.
During the hearing, U.S. District Judge P. Kevin Castel of the Southern District of New York said Arntsen “has not gotten the message” that he should not steal, according to Law360.
Castel said Arntsen’s presentence report did not list an outstanding restitution order for the prior client theft. Rather than use money from his new crime to repay the former victims, he kept the money, Castel said.
Castel said Arntsen did not provide “a simple yes or no” when asked whether he had repaid the prior victims. Instead, Arntsen discussed artwork that he had given them.
Arntsen’s lawyer, Aaron Rubin, said his client “didn’t pay restitution, but he did at least make efforts,” according to Law360.
