Lawyers charged for stealing $3 million from 737 MAX victims’ families

Two lawyers were charged with misappropriating funds of the Lion Air 737 MAX victicms' families
Lion Air Boeing 737 MAX landing at Juanda International Airport SUB

A United States attorney’s office indicated that it charged two California-based lawyers with misappropriating over $3 million from the victims’ families of the Lion Air Boeing 737 MAX crash. 

The two lawyers from Pasadena, California, US, were charged with eight counts of wire fraud and four counts of criminal contempt of court, according to the indictment filed in the US District Court of Chicago. A third defendant, working as one of the lawyer’s head of accounting and finance, was also charged with the same offenses. 

“The substantial misappropriation alleged in this indictment compounded the grief and anguish of the clients who lost loved ones in the Lion Air crash,” said John R. Lausch, a United States Attorney for the Northern District of Illinois. “Attorneys who violate the trust of their clients and breach a fiduciary duty that is paramount to the practice of law must be held accountable.” 

The Lion Air accident was one of the two fatal crashes of the Boeing 737 MAX. The aircraft crashed shortly after taking off from Soekarno–Hatta International Airport (CGK) in Jakarta, Indonesia, claiming the lives of 189 people in October 2018. The second accident happened in Ethiopia when an Ethiopian Airlines jet of the same type plunged into the ground several minutes after taking off from Addis Ababa Bole International Airport (ADD) in Addis Ababa, Ethiopia in March 2019, with no survivors of the 157 people onboard. 

Involved in the Lion Air case against Boeing 

The two lawyers represented five clients, who were families of the victims of the Lion Air crash in October 2018, in a federal court in Chicago. 

In that case, Boeing was the defendant. The two sides settled in 2020, and the manufacturer’s counsel wired the $3 million to one of the lawyer’s trust accounts, with the majority of the sum intended to go to the victims’ families. However, according to the charges, the two lawyers and their accountant “misappropriated more than $3 million of the settlement funds by diverting the money for improper purposes, including paying the firm’s payroll and operating expenses”. Those expenses include funding settlements to other clients of the firm, “whose own settlement funds had been misappropriated by the firm,” read the attorney’s office’s document. 

“At one point they falsely told the clients that the Covid-19 pandemic prevented the firm from distributing the settlement funds, while at other times they falsely claimed that “serious issues” had arisen with Boeing that delayed the distributions, the indictment states,” continued the filing. 

According to the Court, “the indictment seeks forfeiture from the defendants in the amount of $3,069,500”. 

Still, “an indictment is not evidence of guilt.” If found guilty, each count of wire fraud is punishable by up to 20 years in federal prison. Contempt count penalties are determined by the Court. 

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