Crowell & Moring has settled all litigation in the fallout from the legal work of an ex-associate who faces felony grand larceny charges for allegedly stealing more than $7 million from clients. The firm has signed stipulations of discontinuance in three separate actions, one of which alleged legal malpractice for inadequate supervision of former real estate associate Douglas Arntsen. Arntsen, who was extradited from Hong Kong, faces two counts of first-degree grand larceny and first-degree scheme to defraud (NYLJ, Jan. 24).
Two of the now-settled actions focus on the attempted sale of a Manhattan building where Arntsen was one of the attorneys representing the seller, Regal Real Estate, BCN 16th St. v. 9 East 16 Street, 151394-2012, and Aristone Realty Capital v. 9 East 16th Street, 651302-2011. One possible buyer alleged breach of contract; another sought damages and specific performance under the contract it entered with Regal. In the third suit, Regal Real Estate v. Crowell & Moring, 151536-2012, Regal argued the firm’s lack of supervision of Arntsen exposed it to unnecessary litigation. Regal had already settled a separate action against the firm seeking reimbursement of $5.5 million in escrow funds allegedly stolen by Arntsen (NYLJ, Dec. 12).
