Attorney Misconduct, Crime, Divorce Train Wrecks, Legal Ethics, Lindquist & Vennum, Scott Rothstein, White House Counsel, White-Collar Crime

A Trio of Misbehaving Lawyers: Some Updates

Bad boys, bad boys, whatcha gonna do? Left to right: John Michael Farren, Scott Rothstein, Michael Margulies.

For some reason, today brings lots of news about lawyers and the criminal justice system. And we’re not talking about lawyers representing clients, but lawyers who are the clients: John Michael Farren, the former White House lawyer accused of attempting to murder his wife; Scott Rothstein, the Florida attorney who ran a massive Ponzi scheme; and Michael Margulies, the former Lindquist & Vennum partner who misappropriated millions in client money. We’ve decided to hit this rogues’ gallery in a single, omnibus post.

Let’s start with John Michael Farren, the former Bush Administration lawyer and Xerox general counsel charged with attempted murder and first-degree strangulation of his wife, Skadden counsel Mary Margaret Fadden. As reported by the ABA Journal, John Farren has posted $750,000 bail and been released to the “Institute of Living” — which sounds like a fancy spa where you eat seaweed and do yoga, but is actually a mental hospital in Hartford.

The news coverage also reveals that the wealthy couple’s divorce has been finalized. How were their millions distributed?

From the Stamford Times (via the ABA Journal):

The divorce proceedings ended in April with Mary Farren winning a $4.1 million settlement. Judge Barbara Brazzel-Massaro ruled that the attack rendered Mary Farren unable to financially provide for her two children. However, John Farren was permitted to keep enough money to post his bond and pay his attorneys.

The Farrens had impressive assets, including a $4 million mansion and $2.8 million in various bank accounts. But they probably weren’t doing as well as our next subject, Scott Rothstein, formerly a high-flying Florida attorney.

At the peak of his powers, Rothstein owned lavish real estate and two Rolls-Royces. But there’s nothing enviable about Rothstein’s current state, as reported by Am Law Daily:

South Florida labor and employment lawyer-turned-Ponzi schemer Scott Rothstein was sentenced to 50 years in federal prison Wednesday. And in handing down the half-century sentence, federal district court Judge James Cohn in Fort Lauderdale ordered Rothstein locked up for a longer term than either the prosecution or defense sought.

Federal prosecutors had requested a sentence of 40 years. Defense attorney and former Rothstein law partner Marc Nurik — noting his client’s cooperation in helping federal authorities untangling Rothstein’s $1.2 billion Ponzi scheme — had asked Cohn that the sentence not exceed 30 years.

Ouch. Rothstein is now a member of what Ashby Jones of the WSJ Law Blog has dubbed “the Half-Century Club.”

(On the positive side, it seems that prison life might agree with Rothstein. The previously paunchy attorney was described in the Sun-Sentinel as looking “much thinner” today.)

Finally, we reach a defendant whose crimes are small potatoes compared to Rothstein’s: Michael Margulies, a former partner at Lindquist & Vennum in Minneapolis. When we last looked in on him, Margulies was accused of misappropriating client money to renovate a million-dollar mansion.

Surprise surprise: Margulies has pleaded guilty. From the ABA Journal:

A former partner at Lindquist & Vennum in Minneapolis admitted in federal court on Tuesday that he began stealing money from clients and his law firm as far back as 1994, taking some $2 million in all.

Michael Margulies, 56, was released after his guilty plea to wire fraud, according to the Minneapolis Star-Tribune and Pioneer Press. A sentencing date has not been set. He faces up to 20 years in prison.

The plea agreement says Margulies stole the money through fraudulent invoices and expense reports and forged checks. A lawsuit claims Margulies used $1.5 million stolen from one client, a real estate development company, to renovate his historic mansion.

In Margulies’s defense, he did a nice job on the house — check out the slideshow at the end of this post.

Perhaps he can spruce up his prison cell in similar fashion. If former inmate Martha Stewart was able to whip up delicious creations using vending machine staples and the prison microwave, then anything is possible.

Ex-White House Lawyer Posts $750K Bail in Case Over Alleged Murder Attempt on Attorney Wife [ABA Journal]
South Florida Ponzi-Scheming Lawyer Scott Rothstein Gets 50-Year Prison Term [Am Law Daily]
Half-Century Club: Rothstein Gets 50 Years [WSJ Law Blog]
Deep Vennum Blues: Lawyer Pleads Guilty to Stealing From Clients [WSJ Law Blog]
Ex-Lindquist Partner Pleads Guilty to Embezzling $2M from Firm and Clients [ABA Journal]

Earlier: All You Ever Wanted to Know About John Michael Farren
Lawyerly Lairs: Partner Accused of Misappropriating Money to Overhaul Minnesota Mansion
Prior ATL coverage of Scott Rothstein

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