Monday, March 31, 2014

Joplin lawyer pleads guilty to embezzling more than half a million from clients

Joplin lawyer Daniel Whitworth, 58, pleaded guilty today in federal court to embezzling $586,739.84 from clients between January 2004 and October 18, 2013.

A federal grand jury indicted Whitworth on the charge. He waived the reading of the indictment today and entered the guilty plea.

"In his capacity as an attorney, the defendant received funds from his clients for the explicit purpose of resolving legal matters. The defendant was required to deposit funds provided by his clients into his attorney trust account. The defendant's clients had authorized him to withdraw those funds to pay expenses related to or to resolve legal cases.

"The defendant maintained an attorney trust account at Mid-Missouri Bank. The defendant also maintained personal bank accounts with Southwest Missouri Bank and Commerce Bank.

"The defendant represented LP&F Trucking, Inc., who hired the defendant to settle a lawsuit with Lyddon Aero Center.

"At various times between January 2004 and October 18, 2013, the defendant took money from clients and deposited those funds into his attorney trust account, or a personal account. At various times, without the knowledge and approval of his clients, the defendant withdrew client funds from this trust account or a personal account to spend on personal expenses.

"These transactions resulted in a wire transmission between the defendant's accounts and either a client's accounts or the account of a party receiving an unauthorized payment.

"None of the defendant's clients gave the defendant authority to use any of the funds to pay his personal expenses."

According to the indictment, during an eight-day period in June 2012, Whitworth took $60,000 from LP&F Trucking, Inc.

He told the IRS he made only $40,242 in income for 2011,  when he "well knew and believed, he had received additional unreported income of approximately $120,776."

Sentencing will take place at a later date.

(This is the news release from the U. S. Attorney for the Western District of Missouri.)

Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Joplin, Mo., attorney pleaded guilty in federal court today to stealing more than $586,000 from his clients.

Daniel D. Whitworth, 58, of Joplin, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a three-count federal information that charges him with wire fraud, money laundering and false statements on tax returns.

Whitworth was the owner of a law practice in Joplin. By pleading guilty today, Whitworth admitted that he embezzled approximately $586,739 from 22 of his legal clients between 2004 and Oct. 18, 2013. Whitworth spent these embezzled funds on personal loans and items unrelated to the legal matters of his clients.

Law enforcement officers investigated complaints made to the Office of Chief Disciplinary Counsel of the Missouri Supreme Court about Whitworth’s theft of client money. Investigators determined from bank records and speaking with former clients that Whitworth repeatedly took money from and for clients. He claimed that money would be used to resolve the matter that the client had pending before the court. In many instances, Whitworth deposited the client’s money either into his attorney trust account or into his personal bank accounts. After depositing his client’s money, Whitworth would then withdraw money and pay for personal expenses and items that were entirely unrelated to his client’s legal case.

Whitworth also admitted that he failed to report the embezzled funds on his personal income tax returns for the years 2009-2011, which the plea agreement says totaled $448,835. Whitworth did not file an income tax return for 2012, according to the plea agreement, and therefore did not report the embezzled funds during this year as well.

Under the terms of today’s plea agreement, Whitworth must surrender his license to practice law in any and all jurisdictions and forfeit to the government a $586,739 money judgment.

Under federal statutes, Whitworth is subject to a sentence of up to 33 years in federal prison without parole, plus a fine up to $750,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the Missouri Highway Patrol and IRS-Criminal Investigation.

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