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2013 1018 Belmonte alice

Manhattan DA: Disbarred Wading River attorney stole $4M from investors in Ponzi scheme

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Former attorney Alice Belmonte of Wading River has been charged in a 49-count indictment with stealing about $4 million in a wide-ranging real estate ponzi scheme, Manhattan District Attorney Cyrus R. Vance Jr. announced yesterday.

Belmonte, 47, was indicted in State Supreme Court on multiple felony charges of grand larceny, criminal possession of a forged instrument, identity theft, scheme to defraud and 10 class B misdemeanor charges of issuing a bad check.

She resigned from the N.Y. bar in February after acknowledging in an affidavit filed with the court “that she could not defend herself on the merits” against charges in an $8.5 million federal lawsuit brought by 11 Florida plaintiffs alleging racketeering, fraudulent misrepresentation, breach of fiduciary duty, wire fraud, breach of contract and knowingly issuing bad checks, according to a Feb. 27 decision of the Appellate Division in a disciplinary proceeding against Belmonte.

2013 1018 vance cyrusAccording to the charges and statements made in court, between August 2011 and January 2013, Belmonte’s real estate investment scheme caused approximately $4 million in losses from more than 10 victims, Vance said in a press release yesterday.

Belmonte convinced the victims to invest in real estate owned (“REO”) listings, more commonly referred to as foreclosures, with the promise of fast and large returns on their investments, Vance said. The victims were assured that their money would remain in Belmonte’s escrow account. However, Belmonte did not enter into real estate transactions with the victims’ money, but instead used it to reimburse prior investors in her Ponzi scheme, or for her own purposes, the Manhattan D.A. said.
According to the indictment the defendant: forged documents, including an amendment to a malpractice insurance policy that would have protected victims from intentional attorney misconduct; created fraudulent documents to indicate that she bought and sold property, forging the necessary signatures; created fraudulent bank records of completed wire transfers; and forged numerous documents assuring the victims that their payments were forthcoming. Belmonte is also charged with issuing a series of bad checks to victims who demanded the return of their investments, bouncing more than $6 million in checks over the indicted period.

Belmonte pleaded not guilty to the charges yesterday. She was ordered held on $3 million bail.

The N.Y. Daily News reports her attorney Kenneth Murphy, “argued for lower bail saying Belmonte, who has a 4-year-old child, is not a flight risk.”

Murphy also told the court Belmonte is not the Bernard Madoff-like criminal the DA described, according to the Daily News.

“These are investments in real estate that went bad,” Murphy said.

“This lawyer mortgaged her future,” Vance said. “Attorneys have a responsibility to be trustworthy and honest with their clients, and stealing from them for personal enrichment is an embarrassment to our profession. If you are a victim of a financial crime by an attorney or legal services provider, please call my Office’s Special Prosecutions Bureau at (212) 335-8900.”

Belmonte husband and mother were active in Riverhead town politics. Her husband, William, was a Democratic town board candidate and the running mate of Supervisor Phil Cardinale in his first re-election campaign in 2005. He received 17 percent of the vote in a seven-way race for two council seats, losing to incumbent Barbara Blass and newcomer John Dunleavy. He was later hired as executive director by the Riverhead Industrial Development Agency, a job he left in October 2008.

Belmonte’s mother, Lois Phillips, also an attorney, mounted two unsuccessful campaigns for Riverhead Town Justice, in 2000 against Allen Smith and in 2003 against Richard Ehlers. Phillips passed away in July 2008.

Belmonte was admitted to the bar in 1992 following her graduation from Fordham University School of Law.

The charges filed against Belmonte, according to the Manhattan district attorney:

Grand Larceny in the First Degree, a class B felony, 1 count
Grand Larceny in the Second Degree, a class C felony, 7 counts
Grand Larceny in the Third Degree, a class D felony, 1 count
Criminal Possession of a Forged Instrument in the Second Degree, a class D felony, 26 counts
Identity Theft in the Second Degree, a class E felony, 3 counts
Scheme to Defraud in the First Degree, a class E felony, 1 count
Issuing a Bad Check, a class B misdemeanor, 10 counts

 

Editor’s note: A criminal charge is an accusation. By law, a person charged with a crime is presumed innocent until proven guilty in a court of law.

Photo captions: (Top) Alice Belmonte of Wading River in State Supreme Court in Manhattan yesterday. RiverheadLOCAL photo by Steve Hirsch.

(Below) Manhattan District Attorney Cyrus R. Vance Jr.

 File photo courtesy of the Manhattan D.A.’s office.