An attorney hired to handle a $3.7 million estate ended up stealing more than $1.5 million from it, spending some of the money on personal expenses and losing the rest through online day trading. By the time Duncan Connelly was finished, the estate account had a little more than $500 left, even though the beneficiaries were still owed more than $1 million.
Last week, Connelly was sentenced to two years in prison and was ordered to pay more than $1.3 million in restitution. After he gets out of prison, he’ll have 3 years of supervised release.
It all started in July 2020 when Connolly was hired to handle the probate for the estate of a woman who left $3.7 million for her heirs. Six nieces and nephews were supposed to receive part of the estate, and nine entities were to get specific gifts. Conley was hired because he worked at a great firm, and the heirs were all overseas.
At first Connolly did things by the book, but his legal fees were high. The law firm he worked for fired him in 2021, so he opened his own firm and took the case with him. That’s when things started going downhill for the beneficiaries.
He wasn’t making payments and wasn’t communicating with the heirs. And then in February 2024, Connelly started taking money for himself. It started with a check for $10,000, then one for $50,000… and before you know it he took $1.5 million and called it a “transfer for investment.”
And yes, he was still billing the estate for legal services while he was stealing!
And what did he do with this money??? He paid some personal expenses but used most of it for day trading. Unsurprisingly, he lost all of the money with his bad stock trades. By July 2024, the estate had only $500 left.
There are a couple of things about this case that I find especially interesting. First, the beneficiaries were overseas and didn’t understand the American probate process. They hired an attorney because they needed someone who knew what he was doing, and they trusted him to handle the money properly. Connelly took advantage of that and I’m sure he knew it would be easier to deceive them.
Second, the theft wasn’t particularly sophisticated. Connelly wrote checks to himself and disguised them as bequests. He transferred $1.5 million and called it an investment in the estate’s records. But none of these transactions were hidden. If someone looked at the bank records, they could have easily seen that he was taking the money for himself.
I’ve worked on estate cases in which beneficiaries question how money has been handled, and one of the first things I want to see is the accounting of estate assets and distributions. What did the estate start with? What money came in? What expenses were paid? Who received distributions? What assets remain? Then I want to compare that accounting with the underlying bank statements and other financial records.
An accounting prepared by the same person who controls the money isn’t necessarily enough. The transactions need to be supported by records, and someone independent needs to be able to verify what happened. In this case, the delays in distributions and failure to communicate with beneficiaries should have raised concerns long before the estate account was nearly empty.
How did the FBI find out about the theft? Connolly himself reported it to them. That’s another interesting facet to the case.
Connolly surrendered his law license and there is an order for more than $1.36 million in restitution. Prosecutors don’t think the beneficiaries will receive much, however.
The judge pointed out that the victims had trusted Connelly with money left by someone they loved. That’s what makes this case particularly ugly. A woman spent her lifetime accumulating assets and decided who should receive them after her death. Her attorney took a substantial portion of that money and gambled it away.
Two years in prison seems like a pretty good deal for stealing more than $1.5 million from people who trusted you.
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