San Diego attorney pleads guilty to fraud - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

San Diego attorney pleads guilty to fraud

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SAN DIEGO (CNS) - A San Diego attorney whose practice included representing plaintiffs in personal injury lawsuits pleaded guilty Tuesday to defrauding his clients and investors by entering into funding agreements that put their cases up for collateral without their knowledge.

As part of his guilty plea in the federal case, Rancho Santa Fe resident Todd Macaluso admitted that he forged his clients' signatures and used forged notary stamps and signatures to convince potential investors to advance him millions of dollars.

Macaluso, 52, is scheduled to be sentenced July 13. He will be ordered to pay restitution to all of his victims, according to the U.S. Attorney's Office.

"Individuals who have suffered a personal injury should not have to worry about being victimized by their own advocate," said U.S. Attorney Laura Duffy. "The defendant's conviction should be a stark reminder that attorneys and other fiduciaries will be prosecuted if they fraudulently misuse the privileges society has given them."

According to court records, Macaluso funded his personal injury law practice by entering into "funding agreements" with various investors. Under those agreements, investors advanced Macaluso money in exchange for the right to collect a portion of his clients' recoveries in the future.

Although clients had to consent to the collateralization of their lawsuits in order for the transfers to be valid, Macaluso concealed those arrangements from many of his clients and forged their signatures on the financing documents, according to prosecutors.

To conceal his scheme, Macaluso also forged the signatures and stamps of notary publics who purportedly witnessed the executions of legal documents, but who, like his clients, had no knowledge of the arrangements.

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