The amount of money lost by personal injury clients and other victims of former attorney William Conour is likely greater than the $4.5 million claimed in an information filed against him in his federal criminal wire fraud case, according to victims and attorneys familiar with the case.
More potential liability is surfacing beyond the 25 clients from whom federal authorities accuse Conour of stealing or misappropriating money. The victims now include workers’ compensation insurance carriers who say Conour or his former law firms failed to pay money due to them.
“The cases I have, he was holding money in trust to satisfy a workers’ compensation lien that the insurance company had for workers’ compensation benefits that were paid to plaintiffs he was representing, and I guess the money’s gone,” said Mike Adley, an attorney for Liberty Mutual Group in Indianapolis.
“I’m sure this isn’t the only insurance company affected,” he added.
Adley is handling multiple Liberty Mutual claims against Conour or his former firms in which unsatisfied workers’ compensation liens total between $250,000 and $300,000. Those claims are not part of the federal wire fraud information charging Conour.
Other attorneys for Liberty Mutual also are representing claims against Conour, but Adley said he had no estimate of the total number of claims or the total of alleged damages.
Timothy Devereux, an attorney who until December worked with Conour and has assisted authorities investigating and prosecuting his former boss, said insurers have contacted him regarding their claims. “I tell them, ‘You guys are as much a victim as everyone else in these cases.’”
Devereux described a particular case: “Bill tells the clients that the workers’ compensation lien is $200,000, and he’s going to withhold that out of the settlement fund, and he’s going to work with (the insurer) to try to get it reduced,” Devereux said. “It turned out he didn’t pay (the liens).”
Workers’ comp liens are authorized under I.C. 22-3-2-13, which states: “If the injured employee or his dependents shall agree to receive compensation from the employer or the employer’s compensation insurance carrier or to accept from the employer or the employer’s compensation insurance carrier, by loan or otherwise, any payment on account of the compensation, or institute proceedings to recover the same, the employer or the employer’s compensation insurance carrier shall have a lien upon any settlement award, judgment or fund out of which the employee might be compensated from the third party.”
Once a leading personal injury attorney in Indiana, Conour is accused of converting for personal use money in trust funds established for clients who won settlements through his firms’ representation dating back to 1999. The federal information alleges that Conour convinced clients to accept monthly payments in structured settlements, then funded the trusts by purchasing annuities on a yearly basis. But he’s accused of keeping millions for himself in a scheme discovered as the monthly checks that his clients expected to receive stopped coming.
Conour used money from new settlements to pay other clients, the information says, and he is accused in some cases of failing to notify clients that he received settlement funds, or falsely denying that he had.
In a telephone conference Oct. 17 with U.S. Chief Judge Richard L. Young in Indianapolis, Conour said he had not yet retained legal representation, according to court staff. Three weeks earlier, Young granted Conour $15,000 from a trust fund that had been established in the spring with $100,000 to compensate victims. Young approved disbursement of the money for Conour’s living expenses and to retain new legal representation during a Sept. 27 hearing in which Conour severed his relationship with his then-counselors, Richard Kammen and Dorie Maryan.
The trust fund – from which Conour had drawn prior disbursements – also was released by Kammen to the court. A court receipt dated Oct. 3 shows just $39,279.35 remained as of that day. Conour said during the Sept. 27 hearing that he needed $15,000 every two months for living expenses and to pay counsel.
Also during the phone conference, Young delayed Conour’s trial on a motion from special U.S. Attorney Richard Cox. The trial had been set for Oct. 22.
Conour is scheduled to appear in court on Dec. 4 for another status hearing in regard to his legal representation. A new trial date has not been affirmed and is likely to be scheduled for January, according to the court.
But according to Conour’s state bar resignation letter submitted in May, the former attorney appears to acknowledge his guilt while the Indiana Supreme Court Disciplinary Commission was investigating complaints against him that former colleagues say dated back several years.
The Indiana Lawyer obtained a copy of Conour’s resignation letter, which the commission considers confidential under Rule 23, Section 17 of the Indiana Rules for Admission to the Bar and the Discipline of Attorneys.
In his resignation letter, Conour writes: “On April 27, 2012 I was charged with one (1) count of mail fraud, a felony in the United States District Court, Southern District of Indiana. … A copy of the criminal complaint filed in the above is attached hereto and incorporated herein as ‘Exhibit A.’
“I acknowledge that the material facts so alleged are true,” Conour wrote. “I submit this resignation because I know that, if the proceeding were to be prosecuted, I could not successfully defend myself.”
A former Conour client who hasn’t received proceeds from a settlement said she has been told that potential losses exceed $7.5 million. FBI spokeswoman Wendy Osborne said the agency does not comment about investigations into pending matters, and Cox said he could not comment on investigative matters beyond those alleged in federal court.
Devereux said he had no direct knowledge of the extent of alleged losses. “The question is, how do you calculate the number?” he asked, noting that many structured settlements had been guaranteed to pay over time an amount much greater than the lump-sum settlement award.
“It’s going to be well beyond $4.5 million and probably beyond $7.5 million,” Devereux said. “The point is, he never actually purchased the annuities, and so we don’t know how much should have been paid out. … Some of these folks should have gotten a couple million dollars under an annuity that doesn’t exist.”
Devereux said he’s unfamiliar with settlements prior to the four years he worked for Conour, and he noted that the wire fraud count only applies to transactions that crossed state lines. He said there may be more victims if Conour failed to purchase annuities to fund future obligations.
“My fear is, come January, there are going to be people coming out of the woodwork saying, ‘My payment stopped. What happened?’” Devereux said.
Quizzed about potential assets that may be available to compensate victims, Conour said in court in September that he believes he may have attorney fees coming to him of about $2 million.
“A majority of those cases came with me, and I do not foresee in any reality where he thinks he’s entitled to $2 million in those cases,” Devereux said. “That’s total fantasy on his part.”
“It’s a bad situation,” said Adley, the Liberty Mutual Group attorney. “It’s bad for the workers’ compensation lienholders, and it’s real bad for the people that were injured.”•