PONZI NOTES: (1) Kansas Lawyer Allegedly Ran Scheme Out Of Trust Accounts And Scammed Intended Beneficiaries, Including Clients’ Children And Grandchildren And Prominent University, Feds Say; (2) Former Texas Attorney Pleads Guilty In $7.8 Million Caper
In Kansas, attorney Robert M. Telthorst, 52, of Topeka, was charged with wire fraud and money-laundering amid allegations he ran a Ponzi scheme for all or parts of seven years with clients’ trust accounts.
After a man identified in court documents as “Otto K.” died, Telhorst was appointed to administer payments to two of the man’s daughters and entrusted with $463,344, prosecutors said.
One of the daughters was to receive a lump sum, the other a monthly allotment, prosecutors said.
In the trust for the daughter who was to receive monthly income, “the balance dropped from more than $208,500 to less than $150 after Telthorst removed most of the funds for his own benefit,” prosecutors said.
Separately, Telthorst scammed three granddaughters of a client by raiding their educational trusts that had been set up with $10,000 each.
“He depleted all three trusts, leaving them each with balances of less than $350,” the office of U.S. Attorney Barry Grissom of the District of Kansas said.
Beyond that, two other clients had set up an $80,000 trust to benefit the Business School at the University of Kansas.
“The balance in the account dropped to less than $1,750 after Telthorst diverted funds to his own benefit,” prosecutors said.
Assisting in the Telthorst probe were the the FBI and the Shawnee County District Attorney’s Office, prosecutors said.
Meanwhile, former attorney Billy Frank Davis of Houston pleaded guilty to wire fraud in a case that alleged he held himself out as a real-estate professional for 10 years but actually was running a Ponzi scheme with “a substantial portion of the funds he solicited.”
“Davis admitted to using a variety of ploys to perpetuate his Ponzi scheme, all of which involved falsely representing to investors the existence or nature of various real estate investment opportunities, accepting funds from investors under such false pretenses, and then using the investor funds in a manner other than as represented to investors,” the office of U.S. Attorney Ken Magidson of the Southern District of Texas said.
Davis, also known as Bill F. Davis, is 67. The scheme fetched $7.8 million, prosecutors said.
Sentencing is scheduled for Jan. 11 before U.S. District Judge David Hittner. Davis faces up to 20 years in federal prison, and the FBI led the probe, prosecutors said.