He entered the court room looking stockier and better-dressed than he did in January. Back then, fresh off a plane from Hong Kong, attorney Douglas Arntsen was gaunt and thin, wearing a black track suit and a look of exhaustion following the extradition that brought him to 100 Centre Street to stand charges for his larcenous ways.
This afternoon, inside the court room of Judge Jill Konviser, Mr. Arntsen, the Staten Island kid who grew to become an accomplished corporate barrister at Crowell & Moring LLP, was ready to admit his guilt. Through his own attorney Alan Lewis, and after an initial not guilty plea and months of negotiations with Manhattan prosecutors, Mr. Arntsen agreed to plead guilty to three counts of grand larceny in the first degree and one count of scheming to defraud in the first degree. He is expected to face 4-12 years in state prison. He will be sentenced on October 17.
In doing so, the 34-year-old attorney admitted to an unusual crime spree in which he stole $10,781,185 from his unwitting clients, using the money to pay for several cookie distributorships for relatives and trips to strip clubs for himself, among other illicit expenditures.
The two companies he stole millions from, Doina Capital and Regal Real Estate, were both headed by septuagenarians who had hired Mr. Arntsen for legal counsel.
Doina Capital, an investment fund, was headed by Dr. Adrian Alexandru, a Romanian immigrant and practicing veterinarian who had hired Mr. Arntsen to help incorporate Doina Capital as an LLC, according to court documents. In a cheeky stroke, Mr. Arntsen “wrote himself into the LLC agreement,” prosecutors said, and even gave himself the titles “Vice President” and “Secretary.”
In the agreement, Mr. Arntsen included language that gave the attorney “active management of the operations of the Company,” according to court documents. After the agreement, Doina transferred $22 million to an escrow account set up by Crowell & Moring. Mr. Arntsen went about setting up several corporate accounts in Doina’s name, using his client’s millions “as his own personal ATM, casting aside his ethical, moral, and legal obligations in favor of his own greed,” prosecutors said in court documents.
Regal Real Estate, headed by 74-year-old Maurice Laboz, had worked with Mr. Arntsen when he was at Buchanan Ingersol and again when at Crowell & Moring. Mr. Arntsen stole from the infirm Mr. Laboz (he had suffered a stroke and was dealing with cardiac troubles) twice: the first in 2010, when he stole $3 million from Regal Real Estate’s 1031 account (those funds were the proceeds of a building condemnation award). Mr. Arntsen had used that money to help Doina purchase an office building in Philadelphia, prosecutors said.
He stole from Regal again by stealing the deposits, valued at $4.385 million, from the sale of six buildings in the company’s portfolio and transferring the funds to accounts controlled by Mr. Arntsen.
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