A New Haven bankruptcy lawyer, who paid for boats and a beachfront condominium with millions of dollars he stole from clients already hard-pressed by foreclosures and other trying financial circumstances, was sentenced to more than 5 years in prison Friday.
Peter Ressler, who advertised heavily in the New Haven area and represented low net worth bankruptcy clients, stole between $3.4 and $4.8 million, depending on how the losses are calculated, and used the money to pay for a lifestyle he could not otherwise afford, including the condo a mile or so north of Miami Beach.
Most of Ressler's practice involved guiding clients through the complexities of federal bankruptcy laws while they liquidated assets or reorganized their live or business. The nature of bankruptcy required clients to entrust Ressler with significant portions of their assets, which federal prosecutors said he simply stole "to use for other purposes, including for his own personal use."
U.S. District Judge Alfred V. Covello, who sentenced Ressler Friday in Hartford to 63 months in prison, also ordered him to repay about $4.8 million to clients.
The U.S. Attorney's office said "Ressler took $64,000 from a client purportedly to purchase property; $180,000 from a client to hold money in escrow; $45,000 from another client purportedly to buy back a home in foreclosure; $100,000 from a client to hold money in escrow; $97,000 from a client to hold money in escrow; $102,000 and $50,000 from two other clients purportedly to settle tax obligations with the IRS; at least $199,000 from a client to negotiate a settlement with the IRS; $141,000 from a client to settle debts with IRS and a lender; and $165,000 from a client purportedly to negotiate a loan modification with a lender. In each instance, Ressler used the monies for other purposes."
The prosecutors said Ressler's theft became similar to a Ponzi scheme, as he stole from new clients to hide his thefts from the old. The scheme unraveled when the federal bankruptcy court determined that Ressler was misrepresenting the amount of money he claimed was deposited in his law firm trust account.
In a letter to federal prosecutors, Vincent Marino, a Connecticut lawyer appointed to run Ressler's office after his arrest, wrote: "There are few words to describe the magnitude of the damage caused by Mr. Ressler's illegalities to the victims, the creditors of the victims and the bankruptcy court."
Marino referred particularly to an unidentified elderly couple who were seeking a mortgage modification as part of a personal bankruptcy.
"At some point during his representation, Mr. Ressler told these victims that they needed to give him as much money as they could find so he could negotiate with their lender and modify their mortgage," Marino wrote.
Marino said the couple borrowed $8,000 from their daughter - all but $500 of her savings - and turned it over to Ressler, who spent it on himself. The husband was in a nursing home at the time and, when the wife realized she would likely lose the family home, she suffered a breakdown and was hospitalized herself, Marino said. The couple eventually lost their home to foreclosure.
Ressler was sentenced on evidence that he stole $3.4 million from 48 clients. But federal prosecutors said he owes money to as many as 63 others, bringing the total loss to about $4.9 million. The difference involves funds such as legal retainers that Ressler was paid for work he was unable to perform before his arrest. The higher figure, comprised of criminal and civil losses, was the basis of the restitution order.
Ressler faced a sentence of 63-78 months in prison under the advisory, sentencing guidelines used in federal court. Federal prosecutors agreed with his agreement that he was entitled to consideration for his cooperation with investigators after the thefts were suspected.