Simsbury Man Sentenced for Embezzlement

A Simsbury man was sentenced to prison for embezzling money from several bankruptcy estates he oversaw as a trustee.

Michael J. Daly, 55, of West Simsbury was sentenced on Tuesday by Chief United States District Judge Alvin W. Thompson to 18 months of imprisonment,  according to a statement from United States Attorney for the District of Connecticut David Fein.

“The bankruptcy system depends on the integrity of its trustees and practitioners,” Fein said.  “This prosecution and today’s sentence show that misconduct by those entrusted to act honestly and honorably will not be tolerated.  I thank the Office of the United States Trustee for bringing this criminal activity to our attention and the FBI for its comprehensive investigation.”

Daly pleaded guilty on July 12, 2011 to one count of embezzlement stemming from his theft of $11,100 from the bankruptcy estate of the Conn.-based print shop Lehman Brothers, Inc. Daly had been appointed as trustee of the estate and was was responsible for closing the company’s “Debtor-in-Possession” account as soon as possible, according to the statement.

Daly left the account open for six months and the account received $11,584.31 in customer deposits from outstanding accounts. Daly made a series of withdrawls totaling $11,100 from the account and deposited the money to his business account and subsequently to his personal account.

An FBI investigation also revealed that Daly "embezzled $16,500 from two other estates, stole approximately $22,100 in jewelry from another estate, and attempted to submit approximately $73,650 in false time records in association with his work on behalf of another estate," according to the statement.

Daly has since resigned as a panel trustee in the bankruptcy court and surrendered his law license.

Daly was sentenced to 18 months of imprisonment to be followed by three years of supervised release and was fined $15,000.