$870K Kickback Scheme Gets NY Attorney Mathew Sheldon Disbarred

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Although convicted attorney Sheldon was DISBARRED, a different issue is how was he sentenced by federal court to only 3-years supervised released after STEALING $870K.

$870K Kickback Scheme Gets NY Attorney Mathew Sheldon Disbarred

The New York Appellate Division for the Second Judicial Department has disbarred a convicted attorney.

Law360 reported the criminal conviction

A New Jersey federal judge sentenced the former part-owner, underwriter and legal counsel for New York litigation funding company The Law Funder LLC to 2 1/2 years in prison on Monday, for participating in a kickback scheme that defrauded his former business partners of nearly $870,000. 
U.S. District Judge Dennis M. Cavanaugh sentenced Mathew Sheldon to three years of supervised release as well and ordered him to pay $869,492 in restitution and forfeit $869,492 for his role in the scheme, according to a statement from Paul J. Fishman, the U.S. attorney for New Jersey.

Sheldon previously pled guilty to a superseding information charging him with conspiracy to commit wire fraud through the deprivation of honest services.

According to the U.S. attorney’s office, The Law Funder, which extends loans to plaintiffs in pending civil litigation, did business with Montclair Funding Group LLC and its owner Rory Donadio. MFG was a broker between plaintiffs seeking advances against potential recoveries in pending litigation and private entities such as The Law Funder. In exchange for a broker’s fee, MFG would, among other things, gather necessary information and documents in support of funding opportunities so The Law Funder could evaluate whether to fund a case and for how much. Indicted in May 2012, Sheldon was a 25 percent owner in The Law Funder and supervised the underwriting process for the company.

Sheldon admitted that from February 2005 through July 2009, he conspired with Donadio to design and execute a secret kickback scheme in which Sheldon would offer certain The Law Funder investment opportunities to MFG in exchange for personally receiving a portion of each broker’s commission that The Law Funder paid MFG, according to the U.S. attorney’s office. Sheldon and Donadio agreed to conceal their fee-splitting arrangement from The Law Funder and Sheldon’s three other partners. The kickback scheme resulted in $869,492 in fraudulent payments to Sheldon, which were paid by wire transfer and other means, according to the U.S. attorney’s office.

Sheldon also admitted that he regularly communicated with Donadio to identify coded transactions and calculate the amount payable to Sheldon pursuant to the kickback scheme. Donadio also has pled guilty in connection with the scheme and awaits sentencing.

Sheldon is represented by assistant federal public defender Patrick N. McMahon.

The case is U.S. v. Sheldon, case number 2:12-cr-00324, in the U.S. District Court for the District of New Jersey.

Source: Professional Legal Blog