Defendant Schemed to Help Client Obstruct Enforcement of
Restitution and Forfeiture Order
Lydia Hills, an attorney admitted to practice in the state
of New York since 2011, was convicted today by a federal jury in Brooklyn of
obstructing an official proceeding, and conspiring to do the same. Specifically, Hills attempted to influence
the U.S. Attorney’s Office for the Southern District of New York (USAO-SDNY) to
remove a lien on her client’s real properties by misrepresenting that the
properties would be sold and that the client would not receive any proceeds
from the sale. The verdict followed a
three-day trial before United States District Judge I. Leo Glasser. When sentenced, Hills faces up to 20 years’
imprisonment on each count of the indictment.
Richard P. Donoghue, United States Attorney for the Eastern
District of New York, and William F. Sweeney, Jr., Assistant
Director-in-Charge, Federal Bureau of Investigation, New York Field Office
(FBI), announced the verdict.
“As proved at trial, Hills violated her oath as an attorney
by participating in a corrupt scheme to impede the collection of forfeiture and
restitution owed to the government by her client,” stated United States
Attorney Donoghue. “Today’s verdict
holds her responsible for attempting to undermine the laws she was sworn to
uphold, and serves as a message to others that this Office will not tolerate
such conduct.”
“When the government imposes a restitution and forfeiture
agreement in response to a crime that’s been committed, the best course of
action is to pay up. In this case, Lydia
Hills masterminded a scheme so her client could skirt the system. At one point,
Hills expressed concerns about the deal that was about to go down. As evidenced by today’s conviction, she had
every reason to fear the inevitable outcome,” stated FBI Assistant
Director-in-Charge Sweeney.
Hills’ client was convicted in 2010 in federal court in the
SDNY of conspiracy to commit wire fraud and bank fraud. The client was sentenced to 70 months’
imprisonment and ordered to pay more than $4.9 million in restitution (the
Judgment) and more than $13.5 million in forfeiture (the Forfeiture
Order). The USAO-SDNY filed a lien
against four properties in Queens, New York, to prevent Hill’s client from
selling the properties without first satisfying the Judgment and Forfeiture
Order.
Hills, who was also a licensed as a real estate broker,
subsequently represented the client in a mortgage “short sale” of the
properties. In a short sale, the
mortgage holder can pay off the mortgage with the proceeds of the short sale,
but the mortgager does not receive any of the proceeds. During March and April 2016, Hills conspired
with her client to sell the four properties in a transaction where the client
would receive the sales proceeds in a hidden cash transaction and conceal it
from the USAO-SDNY, which was entitled to the proceeds to partially satisfy the
Judgment and Forfeiture Order. On March
15, 2016, Hills faxed a letter to the USAO-SDNY requesting that the lien be
released in order to proceed with the sale, falsely representing that the
client would not receive any financial benefit from the short sale. However, on
April 6, 2016, Hills, the client and the buyer met at the closing, and the
buyer gave Hills a bag containing $33,100 in cash, representing $25,000 for one
property and Hills’ broker fee of $8,100.
At the closing, which was recorded by FBI agents, Hills told the buyer
with regard to her client, “I’m afraid.
I’m an attorney… I don’t want her to say something… The wrong thing on
the phone one day and it’s being recorded and I’m screwed.”
The government’s case is being handled by the Office’s
Public Integrity Section. Assistant
United States Attorneys Martin E. Coffey and Alexander Mindlin are in charge of
the prosecution.
The Defendant:
LYDIA HILLS
Age: 38
Brooklyn, New York
E.D.N.Y. Docket No. 16-cr-204 (ILG)
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