close
close

Attorney Wheeler indicted, law license suspended

Russellville attorney Stewart Wheeler was indicted Friday by a grand jury meeting in Logan County and his law license has been suspended after allegations surfaced that he misused funds meant for clients.

The indictment, which was announced by the Kentucky Attorney General’s Office, charges Wheeler with a count of theft by unlawful taking ($10,000 or more) and a count of theft by unlawful taking ($1,000 or more but less than $10,000).

Attorney Wheeler indicted, law license suspended | News | bgdailynews.com

The charges carry a maximum combined penalty of 15 years in prison.

Wheeler, 68, is set to be arraigned April 14 in Logan Circuit Court.

A day before he was indicted, the Kentucky Supreme Court suspended Wheeler’s law license after receiving information that he was under criminal investigation.

The Supreme Court’s order calls for a temporary suspension of Wheeler’s license and restricts him from handling any client funds currently in escrow accounts belonging to him or his law firm, which is based in Russellville.

Prior to the announcement of the indictment, a message was left with Wheeler’s office Friday seeking comment. He did not respond to a subsequent email requesting comment.

The Supreme Court’s order contains allegations that Wheeler used cashier’s checks to “siphon funds from accounts.”

The Kentucky Bar Association’s website lists Wheeler as a former member whose membership has been suspended for disciplinary reasons.

Wheeler, who gained admission to the bar in 1979, intended to resign his membership, according to the Supreme Court’s order.

Wheeler’s suspension had been sought by the state bar association’s Inquiry Commission, which is appointed by the state Supreme Court to receive and process complaints from any source who alleges professional misconduct by a lawyer.

The Inquiry Commission petitioned the court to suspend Wheeler’s license after being informed in October of the criminal investigation by the attorney general’s office.

The court concluded the commission “demonstrated probable cause exists to believe Wheeler has misappropriated client funds.”

According to the order, Wheeler “conceded some guilt” in his response to the commission’s petition.

“But he insists that he has not maliciously committed any wrongdoing and that he has taken steps to rectify his admitted mishandling of funds,” the court’s order said.

The alleged misuse of funds took the form of using cashier’s checks as payments to third parties, then returning the checks to the bank and marking them as “not used,” according to the court’s order.

“There is no proof yet in the record these checks were even sent to the ostensibly intended recipient,” the order said. “He then deposited the checks into a different account and used the funds for personal benefit.”

The order notes that transactions associated with three clients have come under scrutiny.

The court’s order features an allegation that Wheeler misappropriated $207,000 of a $300,000 settlement he obtained for James Simmons, a client he represented in a personal injury case.

Instances of alleged misappropriation of those funds listed in the order include $38,000 to Wheeler’s wife to fund a vehicle purchase, $37,000 to Big Boy Auto Sales, $6,452.32 to Mercedes Benz Financial Services, $18,302.42 to the U.S. Treasury and $3,644 to the Kentucky Department of Revenue.

Indeed, the Inquiry Commission states there is no indication from Simmons’ bank records that he financially benefited from the settlement at all,” the Supreme Court said in its order.

Wheeler denied wrongdoing in that instance, saying Simmons was a close family friend who had no interest in the settlement money for himself and wished Wheeler to use it for the benefit of the attorney’s son and daughter.

Wheeler also asserted that Simmons, who had to live in an assisted living facility due to his injury, could not accept the funds and still accept Medicaid benefits, according to the order.

Another allegation focuses on a trust established in the name of the late Margie Gibbs, a former client.

Wheeler settled two probate cases totaling $148,577.91 while representing Gibbs.

On the day he became executor of Gibbs’ estate in 2017, Wheeler closed out some of her bank accounts and the bank issued a $4,498.96 cashier’s check to Wheeler, who used $900 of it to buy another cashier’s check for an unrelated client, according to the order, which adds that the remaining funds from the check were cashed out and are unaccounted for.

Wheeler is also alleged to have received $14,174 from the Gibbs trust account by two withdrawals made payable to him and a cashier’s check made payable to Price Funeral Home for $5,824, which was then deposited into Wheeler’s escrow account with “not used” written on the endorsement line.

“These funds were then used to pay off Wheeler’s loans and credit cards,” the court’s order said.

A $60,000 trust set up by Wheeler to benefit Gibbs’ disabled great-grandson is alleged to have been another money source for Wheeler.

The Inquiry Commission alleged that Wheeler personally benefited from that account to the tune of $43,531, while the legal guardian of Gibbs’ great-grandson has received just $7,600 from the account.

The commission also alleged that Wheeler withdrew $10,000 from the trust to repay a personal loan he made to himself from his escrow account, siphoned off another $14,000 via cashier’s check to make two credit card payments and used a third cashier’s check in the amount of $6,000 from the trust to help pay for a furniture set.

Wheeler admitted “inadvertently commingling” some funds from the Gibbs account with his own, but denied any other wrongdoing in that instance.

Further allegations involve the son of another former client, the late Gary Hines.

As a result of a dispute between Hines’ heirs, $78,450 was deposited into a Wheeler escrow account associated with Hines.

A $30,000 cashier’s check was issued from that account by Wheeler and made payable to Hines’ son, but it is alleged that Wheeler misappropriated $18,320 of that money by making cashier’s checks payable to Hines’ son, marking them as “not used,” depositing them and repurchasing new cashier’s checks for smaller amounts.

Wheeler asserted he lacked authority to deliver the checks to Hines’ son and that the case involving Gary Hines’ estate had been settled.

The order notes transactions totaling $342,990 received by Wheeler from Kevin Robertson and Big Boys Auto Sales 2.

Several checks made by Robertson to Wheeler had the names of various Wheeler clients on the memo line.

“Wheeler asserts that Robertson would advance retainer fees on behalf of clients who could not afford to pay,” the Supreme Court’s order said. “In return, Wheeler would sign a promissory note agreeing to repay Robertson if any clients defaulted in paying him back.”

 

 

0 comments:

Post a Comment