Two lawyers have been sentenced for trying to extort $200 million from a company that was told to pay the sum as "consulting" fees, according to federal prosecutors.
Acting Assistant Attorney General Brian C. Rabbitt said the two men, Timothy Litzenburg, 38, of Charlottesville, Virginia, and Daniel Kincheloe, 41, of Glen Allen, Virginia, "flagrantly violated their ethical duties to their own clients as they sought to extort a company out of $200 million."
"Attorneys who cross the line and abuse their status as officers of the court will be held accountable for their actions," he said.
Litzenburg was sentenced by U.S. District Judge Norman K. Moon to 24 months in prison plus supervised release, while Kincheloe got 12 months plus supervised release. Both had pleaded guilty to transmitting interstate communications with the intent to extort.
"Today’s sentencing should serve as a strong notice to fraudsters that the U.S. Postal Inspection Service will pursue anyone who uses the mail for illegal schemes," said Delany De Leon-Colon, inspector in charge at the U.S. Postal Inspection Service who oversees the Criminal Investigations Group. “Whether it’s a private citizen or a major corporation, Postal Inspectors will never relent in protecting them from those who seek to use the U.S. Mail to further their dangerous scams.”
The government explained the two had admitted that last fall Litzenburg approached a unidentified company and threatened to make public statements alleging that it had significant civil liability for manufacturing a purportedly harmful chemical in a common household product used to kill weeds.
"Litzenburg and Kincheloe also admitted that after describing the possibility of damaging lawsuits against Company 1, Litzenburg proposed, in sum and substance, that he and Kincheloe enter into a 'consulting arrangement' with Company 1 that would create a purported conflict-of-interest that would effectively stop them from representing their clients as plaintiffs in litigation against Company 1," the government said.
They even set up a Virginia corporation to take in the money they expected to get, the report said.
They also admitted that they threatened in an email that if they were not paid, the targeted company would have "thousands" of plaintiffs bringing action.
Their actions were brazen, the government said.
"Litzenburg and Kincheloe also admitted that they met in person with attorneys representing Company 1 at a conference center in Charlottesville, Virginia, and during that meeting Litzenburg again threatened to injure the property and reputation of Company 1 and its parent company unless they were paid $200 million pursuant to purported 'consulting arrangements,' and that without such a deal there was no way Company 1 'gets out of it for less' than '[a] billion. Yeah. No, I mean, nuisance value, uh, defense lawyer fees, a hit in the stock when this gets filed and served, maybe the press conference, whatever,'" the government said.
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