Petoskey lawyer took trips, fixed his cottage with pilfered funds

Michael Aho Kennedy

GRAND RAPIDS, Mich. (WZZM) -- A disbarred attorney from Petoskey accused of financing lavish vacations and home repairs with an elderly client's money is facing new charges of mail fraud and tax evasion.

Michael Aho Kennedy, 67, was indicted Thursday on federal charges linked to the disappearance of an estimated $1.2 million from a long-time family friend and client, who died in August from Alzheimer's disease.

Kennedy used the money to buy a horse, fix his cottage, pay college tuition bills and to finance family vacations to Madrid, Turkey and Tahiti, the federal indictment alleges. He's also accused of using the woman's money to pay his taxes.

Kennedy already faces up to 20 years in prison on state charges of embezzlement from a vulnerable adult. He was arraigned in a Petoskey courtroom on Monday.

The federal indictment sheds more light on the scope of the alleged financial crimes against Virginia R. Weber, a longtime friend of the Kennedy family who appointed him trustee of her trust account in July, 2006.

At the time, Weber's savings and investments had a value of nearly $1 million, federal court records show.

Kennedy regularly withdrew money from the widowed woman's bank accounts and paid her monthly bills, but also channeled money to a separate business account for his law practice, the government says.

Kennedy mailed Weber five account statements between Nov. 2010 and March, 2012 showing a trust balance that averaged slightly more than $1 million, even though Bank of Northern Michigan statements showed the account was empty, federal documents show.

In addition to mail fraud, Kennedy is charged with understating his adjusted gross income by an average of $292,600 over a three-year period, court records show.

His made an average of about $47,600 over the three-year period, but the undeclared balance "was actually money that he embezzled from the trust,'' the indictment alleges.

The government has launched forfeiture proceedings against Kennedy's home on Hill Crest Drive in Petoskey and is seeking $1.2 million, less whatever proceeds it gets for the house.

The Internal Revenue Service contacted the woman's family in 2012 regarding investments Kennedy had selected for her living trust. Investigators believe the embezzlement dated to 2006 but state charges were limited by the statute of limitations.

Kennedy was disbarred last March. He was arraigned Monday in Emmet County District Court on charges including one count of embezzlement from a vulnerable adult of over $100,000 and one count of embezzlement by a trustee of over $100,000, both 20-year felonies. Kennedy's bond was set at $100,000 cash.

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Petoskey lawyer took trips, fixed his cottage with pilfered funds