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Disbarred Queens lawyer pleads guilty to defrauding clients out of millions in real estate scheme: Feds

Dec. 1, 2023 By Bill Parry

A disbarred Murray Hill lawyer on Dec. 1 pleaded guilty to defrauding his clients in Brooklyn federal court.

Hyun W. Lee, 51, also known as “Michael Lee,” of Closter, New Jersey, was accused of stealing millions of dollars from his clients in real estate transactions while operating at his law office at 163-07 Depot Rd. in Murray Hill. He pleaded guilty to wire fraud in connection with a scheme to defraud his real estate clients and their counterparties of funds held in his attorney escrow account.

According to court filings and facts presented during the plea proceeding, Lee induced clients and counterparties to entrust funds to him for the purchase of real estate based on misrepresentations that Lee would release the funds deposited into his escrow account. Instead, Lee misappropriated these funds and used them for his own benefit, which included gambling at casinos and expenses at a restaurant that he partially owned.

Lee also misrepresented that he was an attorney authorized to represent clients, including in connection with the purchase and sale of real estate, and to receive and hold funds in his escrow account in connection with real estate transactions. In reality, Lee had been suspended and was subsequently disbarred from engaging in the practice of law in the State of New York. As a result, Lee was not permitted to accept funds from clients and third parties.

Lee misled clients about the status of funds held in his escrow account by fabricating documents, leading them to believe their funds were secure. While documentation Lee showed to clients reflected a balance in his escrow account of nearly $3 million, he had actually depleted the escrow account down to only approximately $25,000. He then failed to honor requests by clients and their counterparties to release funds from his escrow account, falsely claiming that he was in the process of working out an equitable way to distribute funds that remained when, in reality, he had already spent virtually all of the funds in the account.

“With today’s guilty plea, Lee has admitted that he preyed upon members of the Korean-American community by holding himself out as a licensed attorney after his suspension and disbarment, only to steal millions of dollars entrusted to him for safekeeping,” U.S. Attorney Breon Peace said. “Protecting the community while holding accountable those who use their positions of trust to defraud others is, and will remain, a priority of this office.”

Lee pleaded guilty before U.S. District Judge Pamela K. Chen. Lee also agreed to pay $3.27 million in forfeiture. When sentenced, he faces up to 20 years in prison.

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