September 3, 2014

Former Grosse Pointe Attorney Sentenced for Bank Fraud and Money Laundering

A former Grosse Pointe attorney was sentenced to prison for bank fraud and money laundering, U.S. Attorney Barbara L. McQuade announced today. McQuade was joined in the announcement by Paul Abbate, Special Agent in Charge of the FBI Detroit Field Office.

Kenneth Flaska was sentenced to 64 months in prison by U.S. District Judge Paul Borman in a case involving a loss to victims in the amount of $2,756,786.63. Flaska pleaded guilty to one count of bank fraud and one count of money laundering in April 2014. According to court records, over several years Flaska executed a scheme to defraud his clients and the law firm at which he was employed. Flaska used false and fraudulent pretenses and representations to obtain funds payable to his clients, which Flaska then diverted for his own personal use. Flaska used the fraudulently obtained proceeds to purchase items such as a 31-foot yacht, which Flaska then sailed in the July 2013 Detroit to Mackinac race.

“Attorneys are paid to serve their clients, not to enrich themselves,” McQuade said. “The defendant in this case went beyond committing criminal conduct by breaching professional duties to clients and colleagues.”

“Over several years, and under the false pretenses of offering professional legal services, Mr. Flaska defrauded his clients and employer of over $2.75 million, living an extravagant lifestyle at their expense,” stated Paul Abbate, Special Agent in Charge of the FBI Detroit Field Office. “Today’s sentencing demonstrates the FBI’s resolve in bringing to justice those who steal from others to further their own selfish purposes.”

The investigation of this case was conducted by special agents of the Federal Bureau of Investigation and prosecuted by Assistant U.S. Attorneys Cynthia Oberg and Gjon Juncaj.