Massachusetts Attorney Disbarred for Fraud
Summary: A Massachusetts attorney was officially disbarred and required to pay the IRS $300,000 in restitution for taking money from clients to pay bills in lieu of a reportable income.
A month after being sentenced to a year of probation and a $300,000 fee, a Topsfield lawyer has been officially disbarred. John Molloy Jr, 53, surrendered his license last month for defrauding clients and misconduct with the IRS.
Molloy was ultimately disbarred for his conduct regarding his federal tax fraud case and his conduct towards his clients and their treatment providers. He admitted in an affidavit to “intentionally misuing” over $57,000 in client funds beginning in 2008.
During the sentencing memorandum filed in the criminal case, federal prosecutors claimed that Molloy used his law firm’s business accounts to pay his personal bills instead of giving himself a salary, with which he would have to report his income.
In order to provide enough money for his personal expenses, Molloy would keep portions of settlements and judgments from clients, instead explaining to his clients that the funds were used to reimburse third-party providers.
Molloy was never criminally charged for his conduct towards clients. In the federal tax case, Molloy entered a guilty plea. His license has been suspended since September. Molloy had his law license suspended back in 2003 as well. The punishment was a three month suspension for signing an affidavit in the name of a client, filing it in court, and making misrepresentations to officials from the Office of Bar Counsel.
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