A disbarred Flushing-based attorney was sentenced in Brooklyn federal court last week to four-and-a-half years in prison for defrauding his real estate clients in the Korean-American community out of millions of dollars.
Hyun W. Lee, 51, also known as “Michael Lee,” of Closter, in Bergen County, New Jersey, pleaded guilty on Dec. 1 to wire fraud in connection with a scheme to defraud his real estate clients and their counterparties of funds held in his attorney escrow account.
“The defendant was disbarred from the practice of law for reprehensible conduct, but that severe penalty did not deter him from continuing to abuse the trust of his clients, so it is my hope that he will get the message after serving a term of imprisonment for his crimes,” U.S. Attorney John Durham said.
In addition to his prison time, Lee will have to pay the government $3.27 million in forfeiture and $3.29 million in restitution to his victims. Lee was admitted to practice in New York in 2003 and maintained a law office at 163-07 Depot Rd. in Murray Hill, where he represented buyers and sellers in connection with the purchase and sale of real property. On March 11, 2020, Lee was disbarred due to charges brought by the Grievance Committee that he had engaged in a pattern of and practice of misappropriating client and third-party funds. As a result, Lee was not permitted to accept funds from clients and third parties.
Between February 2018 and May 2023, Lee induced clients and counterparties to entrust funds to him for the purchase of real estate based on misrepresentation that he would release the funds deposited into his escrow account. Instead, Lee misappropriated these funds and used them for his own benefit, which included gambling at casinos and paying expenses at a restaurant where he was a part-owner. Lee misrepresented that he was an attorney authorized to represent clients in connection with the purchase and sale of real estate and to receive and hold funds in his escrow account in connection with real estate transactions.
Lee misled clients about the status of funds held in his escrow account by fabricating documents, leading them to believe their funds were secure. While documentation showed that Lee’s clients reflected a balance in Lee’s escrow account of nearly $3 million, Lee had depleted the escrow account to approximately $25,000. Lee failed to honor requests by clients and their counterparties to release funds from his escrow account, falsely claiming that he was in the process of working out an equitable distribution of funds that remained. In reality, Lee had already spent virtually all the funds in the account.
“It is particularly egregious that Lee committed these crimes by holding himself out as a trusted lawyer to clients within the Korean-American community in Queens, where many immigrants have little experience with the legal system and place an enormous amount of trust in the hands of individuals like the defendant who profess to represent their interests in legal proceedings,” Durham said, adding his thanks to the Queens County District Attorney’s office for their assistance with the investigation.
U.S. District Judge Pamela K. Chen sentenced Lee to 54 months in prison on Feb. 4 and ordered him to pay the government $3.27 million in forfeiture and restitution to the victims in the amount of $3.29 million.
