Retired Bucks County attorney Randolph Scott has been indicted for allegedly diverting nearly $2.4 million from a client’s estate to his law firm’s accounts.
According to the indictment, filed October 3 and announced Thursday by the U.S. Attorney’s Office for the Eastern District of Pennsylvania, Scott has been charged with one count of mail fraud and two counts of aggravated identity theft.
Scott has also been charged with one count of tax evasion, one count of attempting to interfere with administration of internal revenue laws and three counts of failure to file income tax returns for allegedly bilking the Internal Revenue Service out of about $520,000 by failing to file a federal estate tax return.
Scott, 70, is listed by the Disciplinary Board of the Supreme Court of Pennsylvania as retired.
The indictment said Scott, who owned Randolph Scott Associates in Warrington, Pa., represented the estate of John C. Bready Jr., and was responsible for assisting the executor of the estate — referred to as J.D. in the indictment — in its administration.
Under the Bready will, according to the indictment, five beneficiaries were to receive $50,000 per year for the rest of their lives, while a sixth beneficiary, a minor, was to receive $50,000 per year until her 21st birthday.
Any remaining money was to be donated to Penn State University, according to the indictment.
The indictment alleged that, between December 2005 and October 2011, Scott diverted nearly $1.8 million in estate funds to his law firm’s three accounts on top of the nearly $130,000 in attorney fees he charged the estate.
During that period, the indictment alleged, Scott also diverted into his accounts another nearly $570,000 from checks made payable to the estate.
The indictment alleged Scott used the money to pay both law firm and personal expenses.
According to the indictment, Scott prohibited his staff, as well as J.D., from seeing account statements from the Bready estate investment account.
The indictment said Scott also attempted to cover up the theft by continuing to make the $50,000 annual payments to each beneficiary.
In order to maintain enough money to make those payments while diverting estate funds to his law firm’s accounts, the indictment alleged, Scott failed to file an IRS Form 706, which would have required the payment of about $520,000 in federal estate taxes.
The indictment alleged that Scott misled J.D. into believing no taxes were due because the Bready will included a charitable donation to Penn State.
J.D. died in April 2009, according to the indictment, but Scott failed to disclose the death to the Bready estate’s account manager in order to continue receiving checks payable to the estate.
According to the indictment, Scott would forge J.D.’s signature on the checks and then deposit them into his firm’s accounts.
In July 2010, Bready paid the successor executor of the account — referred to as R.B. — $5,000 to sign a document renouncing the position of successor executor, the indictment alleged.
Scott, however, did not file the document with the Montgomery County Court of Common Pleas and instead continued to receive and forge checks, as well as to divert other funds from the estate to his law firm accounts.
However, upon learning in October 2011 that he was under investigation by the IRS, Scott had R.B. appointed successor executor in an attempt to cover up the funds he had diverted as well as his failure to pay the estate taxes, the indictment said.
The indictment includes a notice of forfeiture for nearly $1.8 million.
If convicted on all charges, according to a U.S. Attorney’s Office press release, Scott faces a maximum of 31 years in prison, possible restitution to the IRS in the amount of $520,351 and to the estate in the amount of nearly $1.8 million, three years of supervised release, a $1.4 million fine and a $500 special assessment.
Scott’s attorney, Nino V. Tinari of Nino V. Tinari & Associates in Philadelphia, could not be reached for comment at press time.
A spokeswoman for the U.S. Attorney’s Office also could not be reached.