Attorney's ex-wife lost challenge to ownership of settlement funds
STATESBORO, Ga: Multiple victims defrauded by a former attorney will begin receiving a share of restitution now that the U.S. Attorney’s Office has won the case challenging ownership of part of those proceeds.
The 11th U.S. Circuit Court of Appeals affirmed the ruling of the U.S. District Court for the Southern District of Georgia that said funds from an investment settlement should go to restitution in the case against Wilson R. Smith, 67, of Lyons, Ga., rather than to his former wife, said Bobby L. Christine, U.S. Attorney for the Southern District of Georgia.
Frances Smith had challenged ownership of $433,096 awarded to her former husband as part of a settlement with BlinkMind, a Texas company in which Wilson Smith had invested while they were married. The District Court ruled, and the 11th Circuit affirmed, that the settlement funds instead should be seized by the United States and applied to the restitution Wilson Smith owed after his sentence for Mail Fraud and Aggravated Identity Theft.
According to court documents, Wilson Smith, a personal-injury attorney, admitted to settling the cases of multiple clients without their knowledge, consent, or approval, then collecting more than $1 million in proceeds for his own benefit while lying to the clients about the status of their cases. Some of those injured clients were forced into poverty in the absence of settlements that they never received, even as Smith and his wife enjoyed a comfortable lifestyle.
After pleading guilty, Smith was sentenced in October 2015 to 96 months in federal prison and ordered to pay $1.285 million in restitution. In January 2018, Frances Smith learned of the pending $433,096 settlement owed to her husband as a BlinkMind investor. A month later she filed for divorce; it was granted in March, and in April, Wilson Smith moved that the court transfer the BlinkMind funds into the divorce settlement even though, until that point, he had paid only $51,370 of the funds he owed in restitution.
The U.S. Attorney’s Office and its Asset Recovery Unit asserted the funds should instead go to satisfy Wilson Smith’s restitution; the courts agreed.
“Wilson Smith’s actions in defrauding his clients represent a particularly egregious example of legal malfeasance," said Southern District of Georgia U.S. Attorney Bobby L. Christine. “Being forced to drag out the claim to these funds only made it worse for the victims who were hurt once in a personal injury case, and then victimized again by their dishonest, greedy lawyer. We hope this resolution will give them at least a small measure of redemption."
The case was investigated by the FBI and the Georgia Bureau of Investigation, and prosecuted for the United States by Xavier Cunningham, Assistant U.S. Attorney for the Southern District of Georgia and Section Chief of the Asset Recovery Unit, and Assistant U.S. Attorney Brad Patrick, with assistance from Litigation Support Specialist Dean Athanasopoulos.
Source: U.S. Department of Justice, Office of the United States Attorneys
