Ex-Baker & McKenzie Lawyer Indicted

Martin Weisberg's voice was barely audible in a Brooklyn federal courtroom today as he answered a magistrate's question on whether he had been advised of his rights regarding the charges against him.

"Yes, I have," whispered Weisberg, a former securities lawyer in the New York office of Baker & McKenzie, the world's largest law firm.

Earlier today, prosecutors unveiled an indictment of Weisberg on 10 counts of wire fraud and one count of money laundering. The charges grew out of a separate investigation of securities-fraud involving transactions known as private investment in public equity, or PIPEs.

Weisberg received $1.7 million in kickbacks from his role in that scheme, according to the charges. As it happens, Weisberg, 57, was previously tried and acquitted of similar charges in Texas. That earlier case is wending its way through discovery.

Today's indictment charges Weisberg with entering into an escrow agreement with two Baker & McKenzie clients --- a company in Anguilla and another in the Bahamas --- to deposit $30 million for expenses and obligations relating to a legal dispute.

Weisberg told the clients he would either put the money into a non-interest-bearing account or an "Interest on Lawyer Account." Proceeds from the latter are used to provide legal assistance to low-income clients.

Instead, Weisberg put the money in an account that earned an interest rate of 4.75 percent, which, over the course of more than 13 months, generated $1.6 million in interest. Weisberg withdrew $1.3 million of that "for his own benefit," according to the indictment.

The clients did not receive monthly bank statements for the escrow account, prosecutors said. Instead, Weisberg sent them letters purporting to confirm the balance in the account, and concealing the fact that it was earning interest.

Weisberg pleaded not guilty, and U.S. Magistrate Robert M. Levy ordered him to post a $500,000 bond secured by $150,000 in cash or its equivalent.

"At this point, your honor, no one is out of pocket," said Weisberg's lawyer, Barry I. Slotnick of Buchanan Ingersoll & Rooney, who in his high-profile career has represented subway vigilante Bernard Goetz and several mob figures.

Not so fast, said prosecutor John Nathanson. "We do not dispute that the monies were repaid," he told the judge, but they were repaid only after Weisberg learned that prosecutors were investigating him last December.

After the hearing, Slotnick insisted the matter was a misunderstanding over a loan. "When someone lends you money, they expect you to repay it," he said. His client repaid the loan when he did, the lawyer added, "because it was the appropriate time to repay the loan," and not because of the federal investigation.

Federal authorities were not as understanding. In a press release, Mark Mershon, the F.B.I. assistant director in charge, said, "It goes without saying that a lawyer has an ethical, professional and legal responsibility not to steal from his client."

How could the clients have been so naive? After the hearing, Nathanson, the prosecutor, said simply: "They trusted their lawyer."

Weisberg has certainly bounced around a lot in his legal career: Back in 1991, when he was indicted in Texas, he was a New York partner with the Philadelphia firm of Morgan Lewis & Bockius.

During most of the time of the alleged PIPE scheme, he was a partner at Jenkins Gilchrist Parker Chapin, a firm that imploded amid a massive tax shelter scandal. After about a month at Trautman Sanders, where many Jenkins lawyers landed in April 2005, Weisberg joined Baker & McKenzie.

Weisberg resigned from Baker shortly after the October indictment. He resides in Waccabuc, New York, a town in Westchester County horse country north of New York City.

Slotnick declined to answer questions about whether Weisberg continues to practice law.

by Karen Donovan