Disbarred Lawyer Sentenced to Federal Prison for Stealing Escrowed Funds
Former Mableton attorney Carla Gaines was sentenced to two years in federal prison after the Supreme Court of Georgia disbarred her last year for using client funds to pay personal and law firm expenses.
July 21, 2020 at 02:54 PM
2 minute read
A disbarred Mableton attorney was sentenced to two years in federal prison for stealing client funds she was supposed to have held in her law firm's escrow account.
Carla Gaines, who was stripped of her bar license by the Supreme Court of Georgia last year, was sentenced Friday for stealing $337,400 from client Clayton County, according to U.S. Attorney Byung J. "BJay" Pak. In addition to a two-year prison term, Gaines was ordered to pay $330,900 in restitution, according to Pak.
In pronouncing the sentence via a video conference, U.S. District Chief Judge Thomas Thrash ruled that Gaines will not have to report to prison until Oct. 17.
A sentencing memorandum submitted by her public defender said that Gaines, 61, has high blood pressure and diabetes and, because of that, is at greater risk if she should contract COVID-19 in prison.
Gaines' sentence follows her guilty plea last February after she was indicted on theft and multiple wire fraud charges. Gaines' disbarment stemmed from the theft that was the basis of her federal conviction.
Clayton County retained Gaines as an escrow agent in 2014 and transferred $712,400 to her to hold for Kelete Inc., a business from which the county had secured an easement, according to federal prosecutors and court records.
When the easement deal closed the following year, Gaines paid Kelete $375,000 but withheld the balance until certain property improvements were complete, according to prosecutors and court records. But after Kelete fulfilled the required work in 2016, Gaines never forwarded the outstanding funds, prosecutors said.
Instead, the attorney diverted the money to pay for personal and law firm expenses "and then repeatedly lied about it" to Kelete, Pak said.
When Kelete sued her, Pak said the Mableton lawyer lied again during two depositions. In 2016, a civil judgment entered against her directed her to repay the missing funds as well as Kelete's legal fees and costs, according to her sentencing memorandum submitted by her public defender.
Gaines, who has been working as a paralegal, was already repaying the stolen funds when she was indicted, the memorandum said.
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