A Garden City attorney stole about $200,000 in civil settlements he won for four clients, telling one suspicious client “the check was probably lost in the mail,” Nassau County police said Tuesday.
Steven Morelli, 59, of Manhattan turned himself in to the police department’s Crimes Against Property Squad in Westbury at 7 a.m. Tuesday, said Det. Sgt. Richard Harasym, commanding officer of the squad.
From February to August of last year Morelli “retained and misused settlement checks in the amount of $198,000 that had been awarded to his clients from lawsuits,” police said.
Police said Morelli might have swindled other clients. “We believe there are other victims out there,” Harasym said.
Police first became aware of the alleged theft when one of Morelli’s victims, a Nassau County resident, came to police on Dec. 29, 2015, Harasym said.
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.
“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 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,” 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 moneys owed” to three of the victims, Harasym said. He still owes the fourth victim about $40,000, Harasym said.
“It is supposed to be distributed almost immediately,” Harasym said. “He has no legal right to hold on to that money. That money belongs to the victim.”
Marc Gann, defense attorney for Steven Morelli, entered a not-guilty plea Tuesday to grand larceny charges during his client’s Hempstead district court arraignment.
The Mineola lawyer told Judge Joseph Girardi that Morelli was a father and husband who owns a home in Nassau County and has no prior criminal history.
The judge conditionally released Morelli to probation supervision without bail after Morelli surrendered his passport.
Morelli didn’t comment after court officers removed his handcuffs and he left with his attorney.
“This is a guy who has fought for his clients for years. And organization may not have been his strong suit . . . I don’t think anything was done from a criminal intent perspective,” Gann said outside the courthouse.
With Bridget Murphy