By Lauren Johnson
A lawyer from the white shoe law firm Crowell & Moring is facing extradition from Hong Kong amidst allegations that he embezzled $2.5 million from a New York real estate investor.
Douglas R. Arntsen, a counsel at the global firm, resigned from Crowell & Moring on September 12, a day before the Manhattan District Attorney’s office advised the firm that he was under investigation for the misappropriation of client funds.
According to reports, Arntsen was involved in a duplicitous scheme that saw him shuttle hundreds of thousands of dollars around Manhattan in a suitcase.
It is alleged that he fled for Hong Kong after his client, Regal Real Estate, discovered missing funds from an escrow account. Regal is a real estate investment firm based in New York headed by Maurice Laboz.
Regal alerted local law enforcement officials and executives at Crowell and Moring when it became aware of the discrepancy. However, by that time Arnsten was on a flight to the Far East.
The Manhattan District Attorney’s office said Arnsten was subsequently arrested and is currently awaiting extradition.
A spokeswoman for Crowell & Moning told Real Estate Weekly that the firm is co-operating fully with the DA’s investigation into Arntsen’s activities and is conducting its own investigation.
“We are conducting a thorough investigation into Mr. Arntsen’s activities, and we are taking appropriate steps to rectify this matter,” said Jessica O’Neil, communications manager at Crowell.
Regal Real Estate had reportedly provided Arntsen with around $4 million to hold as deposits on $40 million worth of real-estate deals.
The DA said full charges against lawyer would not be made public until the time of arraignment.
Regal Real Estate declined to comment.