The Texas attorney knew his client had money.
At the man’s direction, Frisco lawyer David A. Krueger had just transferred a portion of his funds from a legal settlement to a title company — but there was still more money left.
Krueger visited the man’s home in the small East Texas town of Wake Village in April 2014 with a proposition: Invest in his misting fan business in exchange for an ownership interest and a 30-day repayment at a 10% rate, according to court documents. His client agreed.
“However, I didn’t return payments of any kind to (my client) in connection with this investment,” Krueger admitted in court documents.
Instead, he persuaded the man to transfer $400,000 from another settlement into the law firm’s account several months later, officials say.
Though he promised to put the funds in an asset protection trust, Krueger admitted in court documents that he spent the money on the misting fan company, other business ventures and personal use.
In 2019, Krueger was charged with wire fraud. He was accused of soliciting investments from current and former clients and promising returns of 10%, officials say. However, Krueger wasn’t licensed to sell securities.
On Thursday, a federal judge sentenced Krueger to 18 months in prison after he pleaded guilty in January. The judge also order him to pay $350,000 in restitution.
“As an attorney in Texas, this defendant took an oath to act honestly and with integrity,” Acting U.S. Attorney Nicholas J. Ganjei said in a statement. “He then violated that oath by scamming his client out of hundreds of thousands of dollars.”