The grim-looking fella wearing a black Adidas tracksuit hanging slackly from his broad frame didn’t appear to be the sort you’d figure for a globetrotting, multi-million-dollar-swindling, authority-duping mountebank that the female Assistant District Attorney was describing late Friday night inside a Manhattan Criminal Courtroom.
Perhaps that’s the most obvious knock on Douglas Arntsen, a 34-year-old real estate attorney who, according to his attorney
Allen Alan Lewis, is a native Staten Islander with deep ties to the borough and the two parishes he attended as a kid—St. Peter’s Church and Our Lady Star of the Sea—not to mention his hardworking parents. Indeed, in testimony now immortalized in criminal court documents, the defendant, insisted Mr. Lewis, was raised by a law-abiding architect and an assistant principal at a local school.
“He deserves to be treated as a person who has never been arrested before,” said Mr. Lewis during a criminal court arraignment proceeding late Friday night–”[as a] US citizen with deep community ties.”
Prosecutor Sophi Jacobs charged Mr. Arntsen, while working as an attorney at Crowell & Moring, with embezzling $7 million from real estate client Regal Real Estate, run by the emphatically-named William Punch.
And in a shocker of a revelation, Mr. Arntsen is now being investigated for “the theft and misappropriation of up to $21 million” from a second (and unidentified) corporate client, according to Manhattan prosecutors.
Following Mr. Arntsen’s arraignment, Ms. Jacobs declined to comment on whether this second corporate client worked in real estate.
Mr. Arntsen is facing two counts of grand larceny in the first degree and one count of scheming to defraud in the first degree. He faces up to 25 years in prison if convicted of the top charge.
What prosecutors allege is simple: Mr. Arntsen was hired by Mr. Punch and Regal Real Estate, a real estate management firm owned by landlord Maurice Laboz, to assist in the sale of commercial and residential properties, including 112 Fulton Street, 3 East 17th Street, and 9 East 16th Street, among others in the company’s widespread portfolio.
Contracts of those sales —worth a total of $4.385 million—were executed for six of these properties, and the money, Mr. Arntsen claimed, was placed in an escrow account at Crowell & Moring on behalf of Mr. Punch.
Then things get a tad screwy: Mr. Arntsen admitted that he transferred the money into his own Citibank account, and that he invested some of it in a separate and unrelated business deal. Understandably bothered, Mr. Punch ordered his lawyer to retrieve the money, or at least what was left of it.
On September 13, Mr. Punch escorted Mr. Arntsen to a local Citibank branch, where the latter withdrew $1.842 million in bank checks. A trip to a Wells Fargo branch followed, and Mr. Arntsen withdrew another $43,000, which he subsequently handed to Mr. Punch. Mr. Punch, however, insisted that Mr. Arntsen still owed him a round-figured $2.5 million.
“He went through this whole convoluted story,” Mr. Punch told a Reuters reporter last year. “He had to go to Hong Kong to get the money back, and he wanted me to go to Hong Kong with him.”
The next day, Mr. Punch arranged to meet Mr. Arntsen at a downtown location, where Mr. Punch had secretly arranged a sting in coordination with law enforcement officials. Unbeknownst to Mr. Punch and the law, Mr. Arntsen had already absconded to Philadelphia by car, Chicago by air, and finally Hong Kong, also by air, obviously. The trip, Mr. Lewis later argued before the court, had been planned well in advance, for an unrelated business matter not tied to his alleged escape.
Meanwhile, at the scheduled meeting downtown, a car arrived at the meeting spot and was seized upon by the authorities in waiting. The driver was pulled out and it suddenly became clear: Mr. Arntsen had employed a decoy, Ms. Jacobs claimed.
Mr. Punch did not return a phone call or an email request for comment late Friday night.
After what may or may not have involved cinema-worthy cloak-and-dagger maneuvering on behalf of the authorities, Mr. Arntsen was eventually arrested in Hong Kong and held for four months, before being extradited to New York City.
Looking every bit as weary as expected following extradition from Hong Kong, Mr. Arntsen was led to the court in handcuffs and gave a quick nod to his wife, parents, and assorted family members, all bunched together in two rows of back benches.
After meeting with his attorney in a private conference booth near the side of the room, court officers ordered Mr. Arntsen to face Judge Abraham Clott, who listened stoically as the curious details of the 28-minute arraignment unfolded before a rapt audience of suspected criminals and their accusors.
Then the details of the aforementioned (and alleged) crimes cascaded: Mr. Arntsen set up 24 bank accounts at nine banks in an effort to scatter his pilfered funds. He stole $3 million from Regal Real Estate in 2010, followed by another $4 million in 2011. He used the money to pay off his family’s mortgages, Ms. Jacobs claimed. And, perhaps most strikingly, he targeted that yet-to-be-named firm in what prosecutors now describe as a $21 million embezzlement plot still under investigation.
Mr. Lewis pleaded with Judge Clott to release his client on bail. He said Mr. Arntsen’s parents were willing to post their house, at an estimated worth of $500,000, as collateral.
Instead, Judge Clott ordered Mr. Arntsen remanded into custody.
At the very least, might the good judge allot Mr. Arntsen’s a minute alone with his family before the departure, asked Mr. Lewis? “His family has not seen him in four months,” pleaded Mr. Lewis, showing signs of defeat following a valiant, albeit failed, bail request.
“That’s beyond my control,” replied Judge Clott.
After a moment, however, court and NYPD officers tightened into a circle. After a pregnant pause, they beckoned the family.
Then, in a hectic courtroom teeming with penny-ante suspects and haggard supporters, Judge Clott emptied the benches so that, for a brief moment, an unremarkable man, charged with a decidedly remarkable crime, could be alone with his family.