A Garden City attorney already accused of stealing nearly $200,000 in settlement checks meant for four of his clients has been charged with stealing an additional $550,000 from another 13 clients, Nassau County police said Tuesday.
Steven Morelli, 59, of Manhattan, was rearrested at 7 a.m. Tuesday and charged with three counts of second-degree grand larceny and 10 counts of third-degree grand larceny, police said.
Morelli, already scheduled to appear in court on June 27, had previously been conditionally released on his own recognizance after being arrested on March 8, when he was charged with second-degree grand larceny and three counts of third-degree grand larceny.StoryCops: Lawyer misused $200G in settlements
Morelli now faces arraignment on the new charges Tuesday in First District Court in Hempstead.
All told, Morelli is accused of stealing about three-quarters of a million dollars from at least 17 clients.
The crimes took place between June 2014 and earlier this month, police investigators said Tuesday.
“Mr. Morelli’s scheme was that he would receive settlement in regards to these lawsuits, the money would be placed into his account at the law firm,” Nassau Det. Sgt. Richard Harasym, commanding officer of the Crimes Against Property Squad, said in March. “Evidence we gathered showed that once that money was deposited into the accounts, Mr. Morelli almost automatically withdrew that money and spent it on personal items.”
Police said then that Morelli told one suspicious client: “The check was probably lost in the mail.”
The initial arrest in March stemmed from “retained and misused settlement checks” totaling $198,000, police said. Police said those thefts took place between February and August 2015.
Police said they first became aware of the scheme when one of Morelli’s victims, a Nassau resident, called them on Dec. 29, 2015.
Police then found two other victims — also Nassau residents — through an investigation and found the fourth victim, who lives in New York City, after contacting the Grievance Committee for the 10th Judicial District, Harasym said.
The first victim was owed about $52,000, the second and third about $27,000 each, Harasym said.
“All of them made phone calls to him on a continuous basis, asking him where this money was,” Harasym said. “In one instance, one of the victims was told the check was probably lost in the mail.”
Once Morelli found out police were investigating him, “he made good on the monies owed” to three of the victims, Harasym said, adding that Morelli still owed a fourth victim about $40,000. However, police said in March that investigators believed there were additional victims — and, police said Tuesday, there were. It was not immediately clear what happened to the additional $550,000 allegedly stolen or misappropriated by Morelli or if, following his arrest, he made any attempts to reimburse those victims.
“This is a guy who has fought for his clients for years,” Morelli’s defense attorney, Marc Gann, said outside the courthouse in March. “And organization may not have been his strong suit . . . I don’t think anything was done from a criminal intent perspective.”
Gann could not immediately be reached Tuesday.
With Nicole Fuller and Bridget Murphy