Bedford Attorney Stole $2.4 Million From Clients: U.S. Attorney

BEDFORD, NH — A former Bedford attorney has pleaded guilty to defrauding his clients out of more than $2.4 million over a six-year period and faces a lengthy prison sentence on charges of wire fraud and money laundering, the U.S. Attorney for the District of New Hampshire announced Thursday.

John Allen, 63, had his law license suspended last year after officials said that he used the more than $2.4 million for unrelated business and personal expenses between 2014 and 2019, U.S. Attorney Scott Murray said. Allen worked primarily in commercial real estate acquisition law as well as development and secured lending transaction deals for his clients.

As an attorney, he handled client funds and, according to Murray, developed a scheme in which he defrauded clients out of their money. According to a news release announcing Allen’s guilty plea, Murray said that Allen’s clients gave him money to hold in escrow for specific purposes, including private lending, real estate transaction and other business deals. Murray said Allen transferred funds from a trust account into a bank account he controlled and then spent the money on personal expenses and other business-related expenses. At the same time, he told clients that the money was in the proper account and was being used for its intended purpose, the news release said.

In one case, Murray said that Allen convinced a client to invest $1.5 million into fraudulent promissory notes that the attorney had created using other people’s identities. Instead, Allen kept the money for himself, Murray said, while – at the same time – stealing nearly $1 million from other clients and using it for personal expenses. To hide the sources of the money he stole from clients, Murray said the attorney comingled proceeds from fraudulent activities with legitimate funds and completed a number of transfers from multiple accounts and spent the money on personal expenses. In total, Allen pleaded guilty to stealing $2,426,258 from his clients.

He is scheduled to be sentenced on February 25.

“Today, John Allen finally accepted the blame for betraying his clients’ trust and lying to them, claiming he had more than $2.4 million of their hard-earned money safely tucked away, when in reality he was bleeding them dry to make up for his own bad business decisions,” Joseph R. Bonavolonta, special agent in charge of the FBI Boston Division said in the news release. “This is a teachable moment for anyone who thinks they can take advantage of their position for personal gain. Don’t do it, because the FBI will do everything in our power to ensure you will be held accountable.”