Convicted Dallas Lawyer Pleads Guilty to Additional Mail Fraud Charge
DALLAS—Andrew Lee Siegel, a Dallas attorney, appeared this morning before U.S. Magistrate Judge Irma C. Ramirez and pleaded guilty to Count Two of a Superseding Information charging mail fraud, announced John Parker, Acting U.S. Attorney for the Northern District of Texas.
In July 2014, Siegel pleaded guilty to one count of felony criminal infringement of a copyright—Count One of the Superseding Information.
Siegel, 54, faces a maximum statutory penalty of 20 years in federal prison and a $250,000 fine, or twice any pecuniary gain to the defendant or loss to the victim, on the mail fraud conviction and five years and a $250,000 fine on the criminal infringement conviction. Restitution may be ordered. Siegel remains on bond pending sentencing, which is set for April 22, 2015, before U.S. District Judge Ed Kinkeade.
In fall 2010, Siegel established Dynasty Spirits, LLC, and later Dynasty Spirits, Inc. and Speak Easy Distillers, LLC, to facilitate the production and bottling of “Nue Vodka.” In February 2012, Siegel created a private placement memorandum for Dynasty Spirits, Inc. (Dynasty) authorizing the sale of up to $2 million of common stock shares by Dynasty. In June 2013, Siegel became the registered agent and manager of Vanguard Spirits, LLC, which was established for the purpose of distilling, branding and marketing “Vanguard Vodka.”
From September 2011 through July 2012, Siegel collected approximately $1,595,000 from 35 investors for the sale of Dynasty stock certificates. Siegel concealed from Dynasty owners that he unlawfully used up to $410,000 of that amount for his personal benefit, which he had collected from no more than six of the 35 investors.
In November 2012, Dynasty owners suspected Siegel had unlawfully used investor funds, and when confronted, Siegel falsely stated that he had attempted to wire $185,000 in investor funds to Dynasty but the transfer was misrouted. The following month, Siegel created fraudulent and fictitious e-mails to Dynasty owners representing he attempted to wire transfer $185,000 from his bank account to the Dynasty owners’ bank account. Some of the fraudulent e-mails Siegel created contained copyrighted writings and the logo of The Northern Trust Company.
Later that month, Siegel created another fraudulent e-mail to Dynasty owners that contained copyrighted writings, letterhead and logos of the Federal Reserve Bank Services. In fact, Siegel used several fraudulent and fictitious e-mails that falsely represented to Dynasty owners that he was in contact with The Northern Trust Company and the Federal Reserve Bank Services in connection with his “attempted” $185,000 wire transfer to the Dynasty owners. Siegel engaged in this fraudulent conduct to deceive the owners of Dynasty and convince them that he was making a good faith effort to transfer investor funds to the investors of Dynasty.
On June 24, 2013, Siegel fraudulently disbursed $210,000 from a client’s (EP) escrow account to use as part of a legal settlement payment to owners of Dynasty Spirits. Those owners were the victims in Siegel’s infringement conviction. Siegel continued to fraudulently disburse funds from EP’s escrow account through November 2014.
On May 21, 2014, Siegel reimbursed EP by fraudulently and secretly disbursing $285,310 of Vanguard Spirits investor funds. Siegel concealed this fraudulent disbursement of Vanguard investor funds from Vanguard investors and management.
When Siegel pleaded guilty to Count One in July 2014, he made no admission or reference to his fraudulent disbursement of funds from both EP’s escrow account and from Vanguard Spirits’ investor funds.
The FBI is investigating, and Assistant U.S. Attorney David L. Jarvis is in charge of the prosecution.