Thieving Lawyer Gets 5 Years

After bilking clients out of millions of dollars, a New Haven bankruptcy attorney said that he didn’t have money for restitution — even while he was able to pay off half a million dollars in debt for a five-bedroom house in Woodbridge and a 33-foot motorboat.

When questioned about how he could afford those purchases, the disbarred lawyer invoked the Fifth Amendment and refused to answer, prompting the federal judge to find in him contempt of court.

Those continued difficulties finding out where Peter Ressler, 70, a sought-after figure in New Haven’s bankruptcy court for four decades, stashed $3.4 million that he’d embezzled from his clients were factors weighing on Senior Judge Alfred V. Covello’s mind as he decided on the right sentence to reflect Ressler’s fickle cooperation.

Prosecutors contended that Ressler took $3,401,452 in total, which he used to ​“support his law practice and a lifestyle he could not afford, which included a beach condo in Florida, frequent travel to the Sunshine State, and multiple boats,” Christopher W. Schmeisser, an assistant federal prosecutor, wrote in a pre-sentencing report.

Ressler pleaded guilty in June to charges of embezzlement and fraud. ​“I am a broken man who has caused much pain for many people,” Ressler subsequently told a probation officer.

After weighing character evidence, Covello last week sentenced the attorney to 5.25 years in a federal penitentiary and 3 years of supervised release. That prison term represented the lighter end of the advisory guidelines prosecutors suggested, but it didn’t give Ressler the break that his defense team wanted.

Covello also ordered Ressler to pay back $4,856,931 in restitution, reflecting all he had taken from 48 defrauded clients and additional debts he owed to 60 more clients.

According to court filings, Ressler pulled off the scam through several illegal practices.

Sometimes, he required clients involved in bankruptcy cases under Chapter 11 (a highly complex procedure for large businesses to reorganize and continue operating) or Chapter 13 (an easier process for individuals to leverage future income against their debts) to deposit funds into a trust he’d manage. But rather than following through on his duties, Ressler dipped into the pools of cash.

Other times, Ressler took money from his clients and attempted to settle up with creditors directly, without involving the courts. He told these clients — many of whom were on the brink of financial ruin — that he’d manage their money in a trust, but he took the cash for himself instead.

According to Vincent M. Marino, a trustee who took over his law practice, in one case an elderly couple who’d defaulted on their mortgage borrowed $8,000 from their daughter — nearly everything she had in her bank account — for Ressler to negotiate with the lender. The lawyer pocketed all the money. When it looked like they’d lose their house, the man died in a convalescent home, and the woman had a mental breakdown; the home was foreclosed, anyway.

To hide his wrongdoing, Ressler sometimes filed false reports, and he lied about it when asked directly in hearings, according to the government’s case. But in early 2016, the U.S. Bankruptcy Court caught on when monthly balance sheets that were supposed to represent debtors’ assets didn’t match up with the actual funds. That March, Ressler gave up his law license.

One of the defense attorneys, Eric M. Soehnlein, argued that voluntary decision reflected Ressler’s remorse.

“Mr. Ressler understands that what he did was wrong,” Soehnlein wrote in a pre-sentencing report. ​“He has acknowledged his misconduct, he has done all he can to provide redress to his victims, and he intends to accept the consequences for his actions.”

Prosecutors actually agreed, saying that Ressler had done ​“markedly more” than typical defendants. They admitted it might have been tough to piece together a case that could convince a jury.

“Here, where Ressler stole from scores of clients over a number of years, the case presented literally hundreds of individual fact patterns, thousands of potentially relevant documents, and a host of other issues relating to determining applicable losses,” Schmeisser wrote in his memo. ​“The steps Ressler and his counsel have taken … deserve credit.”

But other lawyers who took over his law practice and managed his involuntary bankruptcy had a notably different view.

Marino, the trustee who interviewed many of the victims, said the court shouldn’t be fooled by Ressler’s admission of guilt. ​“Mr. Ressler is now trying to outsmart the system again by throwing himself on the proverbial sword,” he wrote. ​“A formal declaration of Mr. Ressler’s guilt was inevitable in this matter, whether through his own admission or through the announcement of a jury foreman, given the overwhelming evidence against him.”

Julie A. Manning, the chief federal bankruptcy judge in Connecticut, noted that Ressler had been in contempt of court multiple times. She said the court reprimanded Ressler for continuing to give legal advice to his old clients and for invoking his Fifth Amendment right against self-incrimination to avoid disclosing his hidden assets.

That’s what happened with the 2007 Formula 330 Sport Sun boat that Ressler refused to explain how he could afford and with a Wells Fargo safe deposit box that had to be drilled open, revealing gold jewelry in a safe Ressler said would be empty, said Barbara H. Katz, another New Haven lawyer who’s managing his assets in the bankruptcy case.

“At no time have I heard remorse or contrition over what his criminal conduct did to his former clients and victims,” she wrote. ​“What I have heard is how terrible things are for him, how he does not have any money, that he cannot travel freely, that his wife and older son are now in a bad situation because he’s no longer earning an income.”

Katz said the one time that she’d seen Ressler look most upset was when he talked about how his boat had sunk this May during a ​“sea trial” after repairs. The examination that day actually had to be cut short because Ressler was so distressed that he was unable to continue, she noted. ​“He appears to be more concerned with the boat than with the impact of his actions on his former clients,” Katz wrote.

Judge Covello ordered Ressler to report to prison on Jan. 15, 2018.