Feds: Lawyer stole $328,000 from clients, firm

ALBANY – A Slingerlands estate attorney who spent 37 years with one of the largest firms in upstate New York was charged Thursday in U.S. District Court with the theft and concealment of at least $328,000 allegedly taken from clients and his employer.

Albert Hessberg III, 63, a third-generation attorney who has sat on a number of local boards, was fired in March from the firm of Barclay Damon, where he worked since 1981 and handled trusts and estate cases, federal court papers said.

The FBI and federal prosecutors in Albany are still investigating Hessberg's alleged thefts that could be in the range of $1 million to $3 million, according to people with knowledge of the case.

Hessberg is charged with mail and wire fraud. Prosecutors for U.S. Attorney Grant Jaquith say Hessberg stole money from clients and diverted payments to his firm for legal services to himself.

An FBI agent's affidavit said one of Hessberg's former clients, a man identified only as "A.R.," died in 2007 leaving a probate estate of $555,000. The agent said Hessberg was the executor of the estate, the assets of which were to be left in a trust for the man's widow, known as "C.R.," and, after her death, trusts for their three children and grandchildren.

The widow died in 2010, leaving an estate of $314,000. The FBI agent wrote that nothing showed Hessberg ever set up trusts for the children or grandchildren. When one of the children asked about the inheritance, Hessberg explained in emails, voicemails and phone calls that distributing the assets was complicated and he needed more time, the affidavit said.

Hessberg told the person in emails last June that he had hired an accountant to ensure proper distribution of assets, then transferred $10,500 to the late couple's children "in an effort to further conceal and delay the discovery of his thefts," the  agent wrote.

Between Jan. 1, 2013 and May 11, 2015, Hessberg allegedly deposited $328,507 from other Barclay clients into the account for "A.R." He put the money into a bank account under his own name and the name of a family member, then second account under those names, then spent most of the money to "cover his personal and lifestyle expenses," the affidavit said.

Hessberg faces up to 20 years in prison and a $250,000 fine if convicted on the charges, but could face lesser time depending on sentencing guidelines.

U.S. Magistrate Judge Christian Hummel allowed Hessberg to be free on his own recognizance. The defendant's lawyer, E. Stewart Jones of Troy, said the case is "a long way from being over."

M. Cornelia Cahill, deputy managing partner at Barclay Damon, did not utter Hessberg's name in a statement to the Times Union about the charges.

"When this matter came to light, Barclay Damon immediately terminated the attorney involved and notified the U.S. attorney's office," Cahill stated. "The firm will not comment further while the investigation is pending."

Hessberg's family was once part of the firm of Poskanzer, Hessberg, Blumberg and Dolin in Albany, which merged in 1985 with the Syracuse-based firm of Hiscock and Barclay, which later became Barclay Damon.

The defendant's father, Albert Hessberg II, was a president of the Albany County Bar Association and a referee with the state Commission on Judicial Conduct. When he died at 78 in 1995, an obituary in the Times Union identified him as a "longtime local attorney and a star running back for Yale in the 1930s."

The defendant's sister, Kim Hessberg Taylor, is the wife of musician James Taylor. In January, the couple donated $10,000 to Albany Medical Center Hospital for the Pediatric Emergency Department, scheduled to open this summer.

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Feds: Lawyer stole $328,000 from clients, firm