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N.Y. real estate lawyer stole millions from clients, Manhattan D.A. charges

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The entrance to the The New York County District Attorney's office at 1 Hogan Place is seen in Manhattan in New York City, New York, U.S. REUTERS/Andrew Kelly

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  • Prosecutors have said they expect Mitchell Kossoff to plead guilty
  • Kossoff surrendered passport Friday, cannot leave New York state

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(Reuters) - New York real estate lawyer Mitchell Kossoff turned himself into authorities on Friday and is facing charges that he stole more than $2.7 million in client funds.

Kossoff was released on his own recognizance, but a criminal court judge ordered him to surrender his passport and not leave the state, the Manhattan district attorney's office said.

Prosecutors alleged in a complaint that Kossoff took client funds totaling $2.76 million from his firm's escrow accounts. But at Friday's hearing, prosecutors told the court they believed Kossoff had taken $14 million in a scheme that lasted more than three years, a spokesperson for the Manhattan D.A. said.

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Kossoff's next appearance in court is scheduled for Dec. 9, when Manhattan prosecutors told a U.S. bankruptcy judge last month they expect him to plead guilty. His attorney, Walter Mack of Doar Rieck Kaley & Mack, declined to comment.

Prosecutors say between 2017 and 2021 Kossoff emptied an escrow account holding $2.425 million that belonged to client 118 Duane LLC and $241,966.74 belonging to Ambassador Hotel LLC. They also allege he took all but $56,584.93 in escrow funds belonging to Irwin Ostrega.

Kossoff, once a fixture in the New York real estate scene, is charged with grand larceny in the first, second and third degrees, and scheme to defraud in the first degree.

Kossoff's law firm, Kossoff PLLC, was forced into bankruptcy in May, after 118 Duane LLC and other former clients claimed it had misappropriated more than $8 million from its escrow accounts. An attorney for 118 Duane LCC did not respond to a request for comment.

Read More:

N.Y. real estate lawyer Kossoff to plead guilty, Manhattan DA says

Dewey & LeBoeuf bankruptcy vet tapped for Kossoff case

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David Thomas reports on the business of law, including law firm strategy, hiring, mergers and litigation. He is based out of Chicago. He can be reached at d.thomas@thomsonreuters.com and on Twitter @DaveThomas5150.

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