A former Crowell & Moring associate who admitted last year to embezzling more than $10 million from clients was disbarred yesterday by a unanimous panel of the Appellate Division, First Department. Douglas Arnsten pleaded guilty on Oct. 2, 2012, to three counts of first-degree grand larceny and one count of first-degree scheme to defraud, both felonies. On Oct. 17, he was sentenced to four to 12 years in prison and ordered to pay $10.7 million in restitution. The felony convictions trigger automatic disbarment under Judiciary Law §90(4)(b).
Arnsten stole the money from two corporate clients, investment fund Doina Capital and real estate management company Regal Real Estate. He used the money to make loans and investments, go to sporting events, restaurants and strip clubs, and to buy businesses, including a laundromat and cookie and potato chip distributorships.
After he was terminated by Crowell & Moring in September 2011, Arnsten fled to Hong Kong. He was extradited and arraigned in Manhattan Supreme Court last January.
Matter of Arnsten, M-147, was decided by Justices Peter Tom (See Profile), John Sweeny (See Profile), Dianne Renwick (See Profile), Sheila Abdus-Salaam (See Profile) and Sallie Manzanet-Daniels (See Profile).