Attorney suspended after $17 million oil and gas Ponzi scheme


By Cory Shaffer - cleveland.com (TNS)



CLEVELAND, Ohio — The Ohio Supreme Court on Wednesday indefinitely suspended a former Northeast Ohio attorney who served 18 months in federal prison for his role in a Ponzi scheme that bilked investors out of a combined $17 million.

Mark George must complete his supervised release, take a three-hour legal course on handling client accounts and pay $51,000 to a fund for victims of dishonest lawyers before he can apply to have his law license reinstated.

He is one of the people to plead guilty to federal charges in 2016 in the scheme that centered around the Akron-based company KGTA Petroleum Ltd.

The company’s founders and namesakes — Kenneth Grant and Thomas Abdallah — said they could buy crude oil and refined fuel products at deeply discounted prices and resell the products to buyers in the petroleum industry for a substantial profit, according to court records. The men, with the help of two brokers, used promises of 5-percent monthly returns to convince dozens of people to invest more than $20 million, prosecutors said.

Grant and Abdallah did not use the money to buy petroleum but instead purchased a Mercedes Benz, a boat and made payments on a high-end home. They also made more than $200,000 in cash withdrawals, according to court records.

George, who had previously represented one of the men in a legal matter, took $2,500 a month from the company to pass some of the investments through his attorney escrow account to make the payments look legitimate to investors, court records said.

The Securities and Exchange Commission filed a lawsuit in 2014, and the U.S. Attorney’s Office in Cleveland filed charges in 2015. Grant and Abdallah were each sentenced to more than six years in prison.

George pleaded guilty to conspiracy to commit wire fraud and received a to 21-month prison sentence. He served about 16 months behind bars, spent a year in a halfway house. He moved to home confinement in May 2019.

The judge ordered him and the other five defendants to pay back more than $17 million in restitution jointly. The judge also ordered him to repay more than $140,000 to account for his earnings from his role in the scheme, records say.

The court’s Board of Professional Conduct determined that George was not a key player in the company and did no legal work for them. He testified at a hearing in September 2019 that he did not initially know KGTA was illegitimate, but eventually witnessed impropriety and left. He then said he returned to the company every month after being assured his concerns were addressed. He also upped his monthly fee from $2,500 to $4,000, according to the court.

The board noted that George, now 63, showed “profound regret” during the disciplinary hearing, and offered no excuses for his behavior.

“I don’t know if I should be allowed to practice law again because so many people got hurt,” George said during the hearing, according to court records.

The court chose not to permanently disbar George, citing his genuine remorse, his relatively minor role in the fraud and several letters of support filed on George’s behalf, including from former U.S. Congresswoman Mary Rose Oakar, former Cuyahoga Common Pleas Court Judge Jeff Hastings and Independence City Council Member James P. Trakas that detailed George’s Orthodox Christian faith and his family’s prominence in Northeast Ohio’s Lebanese community.

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By Cory Shaffer

cleveland.com (TNS)

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