Source: United States Department of Justice News
Damian Williams, the United States Attorney for the Southern District of New York, announced that BRIAN O’NEILL, a Maryland attorney and escrow agent, was sentenced today by U.S. District Judge Valerie Caproni to nine years in prison for defrauding his clients of funds he was holding for them in escrow. O’NEILL pled guilty to two counts of wire fraud in November 2022.
According to the allegations contained in the Complaint and matters included in public filings:
Beginning at least as early as August 2020, O’NEILL engaged in two related fraudulent schemes.
First, O’NEILL engaged in a scheme to defraud a medical equipment company (“Victim-1”) by falsely promising to hold over $5 million of the company’s funds in escrow. Specifically, in August 2020, Victim-1 entered into an agreement with a Florida-based medical wholesale company (“Seller-1”) for the purchase of personal protective equipment (“PPE”). In connection with the transaction, Victim-1 and Seller-1 entered into an escrow agreement (the “Escrow Agreement”) with O’Neill & Partners, the firm at which O’NEILL was the managing partner. Pursuant to the Escrow Agreement, O’Neill & Partners was to act as escrow agent for the transaction and hold $5.1 million deposited by Victim-1 in escrow. Instead of holding that money as required, however, O’NEILL secretly used the funds to execute personal deals for the purchase of PPE and completely dissipated the funds by approximately November 2020.
In November 2020, Victim-1 cancelled the transaction and sent a letter to O’Neill & Partners requesting that the $5.1 million in escrowed funds be returned to Victim-1. When O’Neill & Partners refused to return Victim-1’s money, Victim-1 filed a civil action in U.S. District Court for the Southern District of New York (the “Civil Action”). In connection with the Civil Action, the Court ordered O’Neill & Partners to deposit the $5.1 million with the Clerk of the Court. On September 22, 2021, O’NEILL deposited $3.3 million with the Clerk.
The $3.3 million deposited with the Clerk, however, formed the basis of O’NEILL’s second scheme to defraud. That money was neither part of the $5.1 million Victim-1 had deposited nor was it O’NEILL’s own money. Instead, it consisted of funds being held by O’NEILL in escrow for a separate transaction. In other words, O’NEILL stole $3.3 million from a separate set of escrow clients in an attempt to satisfy the Court’s order in the Civil Action and repay Victim-1.
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In addition to his prison term, O’NEILL, 49, of Chevy Chase, Maryland, was sentenced to three years of supervised release.
Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation.
This case is being handled by the Office’s General Crimes Unit. Assistant U.S. Attorneys Maggie Lynaugh, Amanda C. Weingarten, and Aline Flodr are in charge of the prosecution.