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Former Orange County attorney Joseph Scali has been sentenced to seven years in prison after being convicted on charges that include mail fraud, structuring cash transactions, making false statements to the IRS, obstructing the IRS, tax evasion, obstruction of justice, and perjury. He must also pay a total of $1,511,534.73 in restitution to his victims.
U.S. Attorney Geoffrey Berman said that from January 2011 through August 2012, Scali, 68, was representing the seller of land and mineral rights in Pennsylvania, who gave him $850,000 to hold in escrow. Scali proceeded to misappropriate those funds from his Attorney Trust Account. During that time, he also engaged in tax evasion by deliberately withholding his Attorney Trust Account records from the IRS, which would have revealed the funds he has misappropriated.
Scali was also convicted of attempting to obstruct the IRS by providing false, incomplete and misleading to revenue officers about his filing history and income. He also mixed client funds and personal funds in his Attorney Trust Account, paid for personal items through that account and structured $32,400 in cash deposits into the trust.
According to Berman, Scali also failed to file tax return forms from 2006 through 2013, making false statements to the IRS and structuring cash deposits to cover himself. When attempting to set aside his disbarment, Berman said that Scali also committed obstruction of justice and perjury when he lied under oath about why in 2013 he had been suspended from practicing law.
In 2014 and 2015, Scali also committed mail fraud by fraudulently undertaking a legal representation of a client for a fee without disclosing his 2013 suspension from the practice of law in New York State. In total, Scali caused the IRS to lose more than $500,000 before interest and penalties. Scali was disbarred by the Second Judicial Department of the Appellate Division of the New York State Supreme Court in 2016.
“Joseph Scali, a former attorney, was convicted of embezzling $850,000 from his attorney trust account that held third-party funds from an uncompleted real estate transaction. Instead of returning the funds – which he was required to do by law – Scali used them on his personal expenses, including sports tickets and international travel," Berman said. "Scali also filed false tax returns and made false sworn statements to the court. Joseph Scali violated his responsibilities as a lawyer and a taxpayer, and now will have seven years in federal prison to reflect on his wide array of financial crimes and failure to act ethically before the court.”
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