CONCORD, NH – Former Manchester attorney John Allen pleaded guilty Thursday to charges of money laundering and wire fraud for taking $2.4 million from several clients.
Allen, 63, of Bedford, appeared in the United States District Court in Concord on Thursday for the plea hearing. He allegedly took the money clients gave him for real estate transactions of other uses, trusting him to dispose of it in the way they wanted.
“John Allen betrayed that trust, took advantage of his clients, and stole their money,” said United States Attorney Scott Murry. “These are the actions of a white-collar criminal rather than a dedicated counselor at law.”
Allen was arraigned last week on the charges, the culmination of an investigation that started when the New Hampshire Attorney Discipline Office found red flags in the way he dealt with client monies.
The Attorney Discipline Office moved to have his law license suspended via an emergency order from the New Hampshire Superior Court, which stated Allen should not be working with clients.
“Mr. Allen’s conduct demonstrates that he presents a danger to the public if allowed to continue to practice (law,)” the state Supreme Court order states.
Allen’s legal practice included commercial real estate acquisition and development, and secured lending transactions, according to court records. Allen maintained two Interest on Lawyer Trust Accounts (commonly known as IOLTA) in order to handle client monies.
Starting in January of 2014 and through October of 2019, Allen engaged in a scheme to defraud several of his clients of more than $2.4 million, according to court records. Allen’s clients gave him money to hold in escrow for specific purposes, including private lending, real estate transactions, and particular business deals. Allen told his clients he would hold the funds in his IOLTA for these purposes, he transferred those funds between his IOLTAs and into another bank account he controlled, without telling his clients, according to court records.
Once the money was out of the IOLTAs, Allen used it for his own personal expenses and for unrelated business expenses, according to court records.
Allen convinced one client to invest more than $1.5 million in fake promissory notes that Allen created using other peoples’ identities, according to court records. Allen did not invest the money and instead kept it for himself, according to the case file. Allen also stole nearly $1 million from other clients by transferring money they had provided for specific real estate transactions from his IOLTA to other accounts he controlled, court documents state.
“This is a teachable moment for anyone who thinks they can take advantage of their position for personal gain,” said Joseph Bonavolonta, Special Agent in Charge of the FBI Boston Division. “Don’t do it, because the FBI will do everything in our power to ensure you will be held accountable.”
In total, Allen stole at least $2,426,258 from his clients, prosecutors have alleged. Allen is scheduled to be sentenced on Feb. 25. His license to practice law in New Hampshire was suspended in 2019.
