Trump Lawyer Helped Other Client Hide Cash, U.S. Says

(Bloomberg) -- New York attorney Alan Futerfas helped a client who was convicted in a pump-and-dump scheme 16 years ago hide more than $1 million that was supposed to be paid to the federal government as part of a $25 million fine, U.S. prosecutors said.

Futerfas was cited for improper conduct by Richard Donoghue, the U.S. Attorney in Brooklyn, New York. In a letter to a judge Wednesday, Donoghue said Futerfas assisted a client named Myron Gushlak “in diverting” money he'd been ordered to pay.

Futerfas, a veteran criminal defense lawyer, has gained attention for other, higher-profile clients in recent years -- Donald Trump Jr. and the Trump Organization.

“Mr. Futerfas has, at all times, conducted himself in accordance with the highest professional and ethical standards,” Futerfas attorney Steven Kessler said. “From my point of view, the government's conduct in filing this letter is absolutely inexcusable. Given the meetings and communications that we've had, this is really coming as a shock to my client.''

“There was nothing whatsoever improper about anything that Mr. Futerfas did in this regard,'' Kessler said. “During this time, Mr. Futerfas obtained advice from two legal experts before making any transfers that the government discusses in its letter.''

U.S. Fugitive

The conduct at issue occurred in 2011 and it's unclear why it's surfacing now. As of last year, Gushlak was believed to be in Dubai and was a fugitive in another case in Florida.

Gushlak pleaded guilty in 2003 to conspiracy to commit securities fraud and two counts of conspiracy to commit money laundering. In 2010 he was sentenced to six years in prison.

At his sentencing, U.S. District Judge Nicholas Garaufis ordered Gushlak to pay the $25 million fine "immediately" and "in a lump sum," according to the government. Garaufis also later directed him to repay victims of his fraud almost $17.5 million.

Several months later Futerfas received $1.14 million in his attorney's escrow account that Gushlak had put up as bail in another case. Futerfas used the money to pay Gushlak's credit card bills, legal bills and sent $100,000 to Gushlak's son Ryan, Donoghue wrote.

Those disbursements “undermined the government's ability to enforce the criminal fine judgment that was ultimately entered against Gushlak,” Donoghue wrote.

Garaufis has the discretion to find Futerfas in civil contempt as a result, Donoghue said in his letter.

In a separate letter filed Wednesday with the court, Kessler said the civil division of the U.S. Attorney's office first contacted Futerfas in May 2018 to help them locate Gushlak's assets. In a series of letters after that, lawyers in the civil division “espoused one theory or another regarding Mr. Futerfas' disbursements of funds as an escrow agent for his client.”

Futerfas and his lawyer met Feb. 26 with lawyers from the civil division and were promised another meeting that never took place, according to Kessler's letter.

“I am disappointed that the civil division chose to avoid meetings that they had promised,” Futerfas said in an interview. “They would have received factual information and legal authorities which refute their claims.''

John Marzulli, a spokesman for Donoghue, declined to comment on the timing of the government's letter to the court.

The case is U.S. v. Gushlak, 03-cr-833, U.S. District Court for the Eastern District of New York (Brooklyn).

To contact the reporters on this story: Patricia Hurtado in Federal Court in Manhattan at pathurtado@bloomberg.net;David Voreacos in New York at dvoreacos@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider, Jeffrey D Grocott