CHARLESTON, W.Va. -- About a dozen of Harold Albertson's former clients watched him plead guilty Monday to tax evasion.The Charleston attorney pleaded to the felony charge in U.S. District Court. He faces up to five years in jail when Judge Thomas Johnston sentences him March 24."As you know, the first part [of the plea agreement] lists a number of individuals to whom you agree restitution is owed," the judge told Albertson.Albertson will pay about $1.2 million to mostly former clients, according to the plea agreement. Also, he agreed to pay $102,410 to the IRS.
Federal prosecutors say Albertson tried to avoid paying $102,410 of income tax owed between 2003 and 2010. Albertson's federal charge came in the form of an information, which usually means a defendant is cooperating with an investigation.That charge states Albertson used one bank account to keep both his personal funds and his client's funds. With that account, he paid his personal expenses and didn't maintain any records to keep the expenses separate, Assistant U.S. Attorney Blaire Malkin wrote in the charge.From 2008 to 2010, Albertson made deposits of about $949,000, $1 million, $1.6 million and $802,000, according to prosecutors. After making deposits, the charge states, Albertson immediately withdrew money and kept a minimal balance in the account.
Albertson "conducted his business in cash and did not keep regular books in an attempt to make it difficult or impossible to identify his assets and to collect amounts owed by him," the charge states.The federal charge against Albertson mirrors ethics charges filed against him by the State Bar's Office of Disciplinary Counsel.Last month, the disciplinary counsel served Albertson, who was admitted to practice law in West Virginia in 1973, with four counts of ethics violations stemming from four separate complaints filed against him.According to the Rules of Professional Conduct, attorneys are required to keep a separate bank account for safekeeping their client's funds.
"I'm just trying to keep up with it," Harold Moles said after the hearing. Moles and Albertson entered into an escrow agreement in 2011, according to ethics charges. Albertson was to hold $50,000 for Moles.Albertson deposited $49,000 of that money on Sept. 7, 2011, into his bank account and during the same transaction withdrew $1,000 from that account, the ethics charges state.The day before he deposited that money, Albertson's account held a negative balance of $1,685, according to the disciplinary counsel.On Sept. 13, 2011, six days after Albertson deposited Moles' money, according to the ethics charges, the account held a negative balance of $230.
"My money was gone within a week," Moles said.In September, Albertson filed for Chapter 7 bankruptcy, according to federal court records.A Facebook group made up of alleged victims of Albertson had 22 members on Monday.Robert Miller said after the hearing that he used to be good friends with Albertson, who he has known since high school."He owes me $20,000," Miller said, adding he planned to file a complaint with the State Bar. After leaving the federal courthouse, Miller and Moles walked across the street to the Kanawha County Prosecuting Attorney's Office to set up a meeting about Albertson."I never imagined him doing this," Miller said. "You think you can trust attorneys."
Reach Kate White at firstname.lastname@example.org or 304-348-1723.