Little Rock lawyer sorry for looting $440,658, gets prison term

Despite his apology for making bad choices during "a time of great pain for me," Little Rock attorney Matthew Mahlon Henry was sentenced Wednesday to the maximum recommended sentence of just under three years in federal prison for stealing $440,658.09 from two clients.

U.S. District Judge D. Price Marshall Jr. sided with Assistant U.S. Attorney Jana Harris in sentencing Henry, 45, who has been a licensed attorney for more than 13 years, to 33 months in prison on a wire-fraud charge.

Federal sentencing guidelines suggested a penalty range of 27 to 33 months for Henry, who in September admitted incrementally taking $415,658.09 from a client's trust account between August 2015 and January 2018, and also siphoning $25,000 out of an account he maintained for a business client, CSI Renovations.

The first client, who wasn't named in court, hired Henry in February 2015 to perform probate work after his parents died overseas.

Explaining how the client's inheritance was amassed, Harris said, "[The client's] parents were able to save over a lifetime of hard work and frugal living" only to have it stolen by the attorney he entrusted to obtain the money for him.

Harris said that Henry made about 200 withdrawals ranging from $500 to $5,000 apiece to gradually deplete the man's trust account, engaging in "a string of excuses, delays and lies" to carry out his scheme. The money was taken through a series of wire transfers from the client's account to Henry's business account, which was then used to pay for his business and personal expenses, according to court documents.

The client didn't receive any of the estate funds, according to court documents. They show that after the client retained another attorney, Henry sent an email last Feb. 23 to the new attorney, saying he would deliver $403,658.09 that he owed the client within three days. He attached a fake email chain indicating he had asked an Arvest Bank official to prepare a certified check in that amount from the trust account, the documents said, but in reality, the trust account had a balance of only $6.59 on Feb. 26, and none of the money was ever paid.

Henry's attorney, Jeff Rosenzweig of Little Rock, asked Marshall to sentence Henry within the guideline range, conceding that "incarceration is inevitable."

Henry also addressed the court, saying that in an effort to explain how he ended up before Marshall, but not to make excuses, "I made these choices in a time of great pain for me and I essentially lost my mind, lost my bearings. ... I've not led a life of theft and dereliction and treachery, but for some reason, I engaged in that. ... I'm incredibly sorry for those choices and the pain I caused to the victims and my chosen profession."

Pointing out the presence of Stark Ligon, the executive director of the Arkansas Supreme Court Office on Professional Conduct, in the courtroom, Marshall asked about the status of Henry's law license.

Rosenzweig replied that Henry "has indicated a desire to surrender" the license voluntarily, but said they were "working on the wording" of that effort.

In any event, Rosenzweig said, Henry's license has been suspended "since all this came up" and he hasn't been practicing law.

Henry was jailed for several months last year by Pulaski County Circuit Judge Mackie Pierce for contempt of court after he failed to turn over the $25,000 he owed his other client, the construction company, and provide an accounting of his lawyer trust account.

Police and prosecutors said Henry stole the money from Texas building contractor Chris Irving, who hired Henry to represent Irving's company, CSI Renovations, and gave Henry the money to put up for a work bond for a job he had in Fairfield Bay.

Two months later, Henry began to claim the money was owed to him for the work he'd done for Irving. He then sued Irving in December 2017, representing to the court that he had actual possession of the money and wanted the court to hold the money in its registry before deciding how to disburse it. Pierce later dismissed the lawsuit and gave Henry 24 hours to turn the money over to Irving's attorney, Tre Kitchens. After Henry didn't comply, he was ultimately jailed.

In imposing Henry's sentence for wire fraud, Marshall noted that if it weren't for the jail time Henry had already served on the contempt finding, he "would consider even a lengthier sentence" than that recommended by the guidelines.

He noted that "a lot of us in this room are lawyers, and people come to us in the most challenging moments of their lives," expecting to be protected.

"This was not one bad decision, or two. It was a pattern of conduct over an extended period of time, and that weighs in the court's mind," Marshall said.

Attorneys entrusted with someone else's money, he said, "have to be above reproach. You act for those who are depending on you."

Hinting at the possible origin of Henry's troubles, as apparently spelled out in a confidential presentence report, Marshall said he would recommend that Henry participate in a residential drug-abuse program while he is in prison because, "as you know, more than I do, that has been part of your challenges."

Marshall also recommended that the U.S. Bureau of Prisons require Henry to participate in mental-health counseling.

Henry's sentence requires him to make full restitution to both victims, with 50 percent of the funds available to him during his incarceration being divided equally between them. Once out of prison, 10 percent of his gross income is to be divided between the two victims until the entire amount is paid.

Ligon told the judge that the Arkansas Supreme Court has a client security fund, supplied by part of the annual license renewal fees attorneys pay to the state, to which both victims have applied. He said the committee over the fund will decide in June whether to reimburse either victim, up to a maximum of $40,000. If the victims are paid by the fund, he said, the state would prefer that any additional restitution payments made by Henry go first to paying the remaining restitution before reimbursing the fund.

As the hearing concluded, Marshall leaned forward and asked Henry, "Are you going to do your best to make this right?"

Henry replied, "I will, your honor."

"OK," Marshall said. "People are depending on you. Don't let them down."

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Little Rock lawyer sorry for looting $440,658, gets prison term

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Little Rock attorney jailed in theft case in court

Little Rock attorney jailed in theft case in court

Matthew Mahlon Henry

A Little Rock lawyer, suspended over questions about more than $400,000 owed to one former client, made his first Pulaski County Circuit Court appearance Thursday to answer a felony theft charge involving $25,000 of another ex-client's money.

Matthew Mahlon Henry, 45, was arrested on the theft charge May 10, but he's been in jail since March 22 for contempt of court after he failed to obey one circuit judge's order to turn over the $25,000 and provide an accounting of his lawyer trust account. The judge has ordered Henry jailed until he surrenders the money.

By law, lawyers who handle money for their clients are required to keep those funds in a special escrow account until the monies can be dispensed.

The state regulators who suspended Henry's law license stated that he "presently poses a substantial threat of serious harm to the public and to his clients if he continues to practice law."

Among Henry's legal problems are the findings of a second judge that the divorced father of two owes about $3,400 in child support, which is about two months' worth, although his ex-wife alleges that he owes about twice that much. That judge also found Henry in contempt after he bounced a check trying to pay the money, court filings show.

Thursday, Henry was before his third circuit judge, Leon Johnson, to have his trial on the Class B felony charge scheduled. He faces up to 20 years in prison.

Henry appeared without legal representation, so the judge gave him a week to decide whether he will try to retain counsel or ask for a public defender.

Police and prosecutors say Henry stole the money last October from Texas building contractor Chris Irving, who had hired Henry to represent Irving's company, CSI Renovations, and gave Henry the money to put up for a work bond for a job he had in Fairfield Bay.

Two months later, Henry began to claim the money was his, owed to him for the work he'd done for Irving. He sued Irving in December, representing to the court that he had actual possession of the money.

The lawsuit brought him before his first circuit judge, Mackie Pierce. Court records show he asked Pierce to hold the money in a court account until a trial could be held to determine who was entitled to it.

Irving's attorney, Tre Kitchens, rebuffed Henry's claim on the money, telling the judge that Henry had no legal right to the money and could show no evidence he was entitled to it, court filings show.

"The complaint filed by the plaintiff does not contain a legal or factual basis for the plaintiff simply keeping the defendants' money," Kitchens' response to the lawsuit states. "The complaint does not include ... any other justification or basis for the plaintiff keeping the defendants' money."

Pierce sided with Irving in January, dismissing Henry's lawsuit five weeks after it was filed, and gave Henry 24 hours to to turn over the money to Kitchens.

The judge also ordered Henry to turn over copies of the lawyer's trust account bank records for the past four months.

But Henry did not comply. Two days after he missed the judge's deadline, Pierce again ordered him to turn over the records, this time warning Henry he was considering holding the attorney in contempt.

The judge even had his bailiff, Kevin Clifton, go to Henry's Spring Street office to serve the order. Irving's lawyer also had the order served on Henry at the office, court filings show.

Pierce ultimately gave Henry three chances over three months to comply with his orders. He ordered Henry arrested in March when the lawyer did not show up for a hearing on the issue. Finally, at an April 9 hearing, Pierce ordered Henry jailed until he pays Irving the money after Henry declined to answer questions about the case, citing his Fifth Amendment protections against self-incrimination.

"Matt Henry is ordered to be held in the Pulaski County jail until such time as he purges himself of contempt by delivering $25,000 to defendants' attorney," Pierce wrote in his order issued that same day.

Henry's attorney, Jeff Rosenzweig, challenged the legality of Henry's continuing incarceration, accusing Pierce of illegally punishing Henry for declining to answer questions.

In court filings, Rosenzweig states that Henry, contrary to his initial claim, does not have the $25,000. He argued that Henry should be released because, since Henry cannot come up with the money to satisfy the judge, he will never meet the release conditions Pierce has imposed.

"Civil contempt is coercive in nature, and consequently there is no justification for confining ... a person who lacks the present ability to comply," Rosenzweig wrote in a motion for Henry's release. "Such imprisonment violates the due process guarantees of the United States and Arkansas Constitutions. In addition, the continued incarceration violates the prohibition on imprisonment for debt of Article 2, Section 16, of the Arkansas Constitution."

Rosenzweig argued that Pierce should release Henry and allow prosecutors to file criminal charges, if they deem it necessary, which would allow Henry the opportunity to be released ahead of trial on bail.

Pierce rejected those arguments. The case is now on appeal before the Arkansas Supreme Court.
Henry's law license was suspended on March 7 by the Arkansas Supreme Court Committee on Professional Conduct.

Court records show that Henry is one of six lawyers suspended this year. Eight were suspended in 2017.

According to the two-page suspension order, about $400,000 from one client that was deposited into Henry's trust account in August 2015 is missing.

Court records show Henry handled the probate case of a 77-year-old man, Keshavial Patel, of Jefferson, who died in India in January 2015. Patel left behind an estate of savings and property worth at least $1.7 million to his only son, a Texas man who hired Henry.

Court filings show that in February, the man hired new legal counsel to take over the case from Henry. But Henry repeatedly failed to complete the necessary paperwork to turn over the case to the new lawyer and has yet to surrender the remaining funds, $403,658, from the estate, court filings show.

The suspension order also cites Henry's failure to obey Pierce's court order to turn over his bank records and the $25,000. The order also notes his child-support issues before Judge Mike Reif and states that Henry has had 10 new grievances filed against him over the past two years.

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Little Rock attorney jailed in theft case in court