Lawyer Allegedly Steals Half a Million From His Own Client
Colby Parks, a former lawyer from Seattle, has been indicted for allegedly embezzling money from a client’s trust account. He is shown here in a video delivering a lecture on ethics. Video credit: American Inns of Court online learning system.
Colbi allegedly stole over $570,000 from the client, who had been awarded more than $1.66 million after suffering significant permanent injuries in a motorcycle accident, according to a public statement by the U.S. Attorney’s Office, Western District of Washington.
If found guilty, Parks could spend 20 years behind bars.
Managed Living Trust for Motorcycle Accident Victim
In 2010, Parks became the trustee for a living trust designed to pay the victim’s expenses after she was severely injured as a passenger on a motorcycle, according to the indictment.
Over the first seven years that Parks was the trustee, he used his position to gain over half a million dollars while the victim was left with only about $20,000.
In 2018, Parks used his influence to make the victim take out a reverse mortgage on her home and twice used the proceeds to fund the trust account. Instead of making it available for her use, Parks allegedly used the money to make transfers from the account for his personal use, including a payment for a l credit card in the same amount he transferred from the victim’s account.
By the end of 2019, his client’s account was drained entirely– except for $15– so she was forced to sell her home, say prosecutors. Parks allegedly didn’t stop there, diverting proceeds from the sale, according to the indictment. He allegedly claimed the victim “owed him the money he had advanced to her.”
Investigation by Adult Protective Services
When Washington State’s Adult Protective Services investigated Parks’ representation of the victim, Parks initially claimed he was only paid a flat rate of $24,000 annually, according to the indictment. After Adult Protective Services requested supporting documentation, Parks revised his statement and said he was paid varying amounts that averaged over $54,000 per year. However, the indictment alleges that Parks collected well over $80,000 per year from the victim.
This led to an investigation by the Washington State Bar, of which Parks was a member until he resigned his law license in lieu of disbarment.
What are Trustees?
Trustees are legally appointed to help vulnerable individuals manage their financial status, ensuring their security and well-being. There are three types of trustees – individual (most often a family member or a close friend), professional (typically financial institutions or specialized companies) or charitable (individuals or organizations that hold assets in trust for charitable purposes).
They are tasked with protecting assets, distributing funds or overseeing terms of legally binding agreements.
However, sometimes, instead of helping their charges, they victimize them through fraud.
In 2020, Sultan Issa was sentenced to 200 months in prison for misappropriating more than $77 million from individuals and financial institutions, according to a Justice Department press release. Issa, acting as a trustee, stole from a trust account that was set up to pay medical expenses for a family member suffering from an incapacitating illness.
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