Lawyer steals from clients, gets 86 months prison
NEW YORK (Reuters) - An Arkansas lawyer who once specialized in securities fraud litigation was sentenced in Manhattan federal court on Monday to 86 months in prison for stealing $9.3 million from clients.
Steven Eugene Cauley, 41, was sentenced by U.S. District Judge Paul Crotty, who also ordered him to serve three years of supervised release and pay $9.3 million in restitution, U.S. Attorney Preet Bharara said in a statement.
Cauley pleaded guilty on June 1 to wire fraud and criminal contempt. He has also surrendered his law license.
Prosecutors said Cauley illegally diverted funds held in escrow from a $65.8 million class-action settlement against insurance services company Bisys Group Inc to a variety of ventures, including car washes.
At his plea hearing, Cauley said; "I always made a good deal of money in my law practice, and knowing I had some additional money coming in, I took a short cut."
Cauley had been a partner at Cauley Bowman Carney & Williams LLC, and was caught after a former partner at the Little Rock, Arkansas firm reported the missing funds U.S. District Judge Jed Rakoff, who was overseeing the Bisys case.
The National Law Journal in 2005 had named Cauley one of the top young U.S. lawyers.
Bisys eventually became a unit of Citigroup Inc.
The case is in re Bisys Securities Litigation, U.S. District Court, Southern District of New York, No. 04-3840.
(Reporting by Jonathan Stempel; Additional reporting by Edith Honan; Editing by Richard Chang)
