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Disbarred lawyer will plead guilty to wire fraud

Accused of taking more than $800,000 from clients

Brad Huff of Marion talks about his mother's estate, which had been handled by now disbarred attorney Susan Hense, at hi
Brad Huff of Marion talks about his mother's estate, which had been handled by now disbarred attorney Susan Hense, at his house in Marion on Monday, October 13, 2014. (Stephen Mally/The Gazette)
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CEDAR RAPIDS — Brad Huff said he was glad to see that his former attorney, who took over $79,000 from his mother’s estate, was finally charged in federal court after waiting two years.

However, he has no way of recovering the money.

“I’ve lost all faith in attorneys,” the Marion resident said. “The money would have been nice but it’s the principle of the thing. Our parents wanted to leave me and my brother something. They worked hard for their money and were honest people.”

Huff is just one client of Susan L. Hense, a Cedar Rapids attorney who was disbarred last year after admitting to taking over $800,000 from client accounts to support her “gambling addiction.”

Hense, of the former Hense Law Firm, is charged with one count of wire fraud in U.S. District Court, according to a criminal complaint. She will have an initial appearance and plead guilty at 11 a.m. Oct. 20. If convicted of wire fraud, she faces up to 20 years in federal prison and restitution.

Assistant U.S. Attorney Peter Deegan said he couldn’t elaborate on the charge, and declined to answer questions about why it took so long to charge Hense after she confessed.

As an attorney, Hense was required to place funds received from clients in a “Client Trust Account,” maintain records for the account and submit annual statements to the Iowa Supreme Court Client Security Commission. Attorneys must keep those funds separate from their business or personal funds. The funds are to be used for a client’s legal case.

According to the complaint, Hense devised a scheme to defraud her clients and steal a portion of their money from the trust accounts. She is accused of making unauthorized and fraudulent transfers of money from the trust accounts into her business account and into her personal account. Hense, who was in practice since 1996, stole and misappropriated $837,011 in client funds, according to the complaint.

In one incident, Hense fraudulently transferred $1,849 from the client trust account to her business account Feb. 2, 2011, then wire-transferred $2,000 from the business account to her personal account one day later, according to the complaint.

Hense also made false statements to the Iowa Supreme Court Client Security Commission regarding the maintenance of the accounts and in her annual statements from at least 2009 through 2012, according to the complaint.

On Dec. 27, 2012, Hense admitted in a sworn affidavit to misconduct and consented to her disbarment, according to documents filed in February 2013 with the Iowa Supreme Court. Hense also admitted to a gambling addiction, and said in the affidavit that she had started counseling sessions and had stopped going to casinos.

Hense couldn’t be reached for comment Monday.

At the time of her disbarment, Hense wasn’t charged with a crime. According to “judgment by confession” filed in Linn County District Court after her disbarment, Hense admitted to taking $858,062 from 16 clients, that none of those funds remained in her possession and that she has no way of repaying them.

The amounts taken from the clients vary from $3,191 to $216,149, according to the judgment.

Matthew Piersall, Huff’s attorney, said the filing allowed the court to enter a judgment against her for the amounts owed so that former clients can try to collect their money. However, Piersall said she has been disbarred and has no way to pay the restitution.

The Iowa Client Security Commission pays claims against lawyers who have embezzled from their clients but only pays a portion of the total amount. The commission paid $150,000 to Hense’s 16 clients. According to the 2013 annual report, it was the largest claim made to the commission.

Piersall said the commission only pays $50,000 per claim or per attorney. Each attorney pays the commission each year for this fund.

Huff said he received about $16,914 for his claim of over %79,000.

“That’s about 15 cents on the dollar,” Huff said. “I tried to find out where the other money goes, if they (attorneys) pay $200 a year into this fund, but I couldn’t get an answer.”

Huff said it’s been frustrating because nobody can help him or give him answers. He called the commission, the Iowa Bar Association, two senators and others to get answers. He found no help.

“Attorneys don’t have to be bonded, and malpractice (insurance) doesn’t cover embezzlement,” Huff said. “So they disbarred her but now she has no way to make restitution. Maybe this (story) will help get some answers. I don’t want to see it happen to others.”

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