Great Neck attorney Daniel Spitalnic, 39, who plead guilty to three counts of second-degree grand larceny on March 28, has been sentenced to one to three years in prison for stealing nearly half a million dollars. He embezzled a down payment from a couple selling their home and fraudulently secured a mortgage loan in the name of a corporation owned by his former mother-in-law, according to Nassau County District Attorney Madeline Singas. The defendant was also ordered to pay restitution in the amount of $496,602.39.
“Attorneys are barred from comingling client funds with their own, but this defendant flagrantly violated his ethical obligations and our criminal laws when he stole hundreds of thousands of dollars from clients and his former mother-in-law,” said Singas. “When an attorney abuses their clients’ trust and steals from those whose interests they are retained to protect, my office will hold them accountable and seek restitution for their victims.”
Singas said that Spitalnic applied for and obtained a $300,000 loan in March 2015 by falsely representing himself as the part owner and officer of a corporation solely owned by his former mother-in-law. The loan was secured by a mortgage on a commercial property in Great Neck, and the defendant used the money on personal items such as rent, travel, entertainment, food and other expenses.
Spitalnic’s former mother-in-law became aware of suspicious activity in May 2015 when she attempted to pay real estate taxes and learned that the taxes were already paid by a title company. She confronted Spitalnic, who said he took out the mortgage because he owed money and told her he paid it back. Spitalnic then gave his former mother-in-law a Satisfaction of Mortgage document that claimed that the loan had been satisfied. But the document filed with the Nassau County Clerk’s Office was a forgery.
In the second case, Spitalnic represented a family that was selling a home in Manhasset. A purchaser paid a down payment of $171,500 in June 2015, which was to be held in escrow by Spitalnic pending the closing. The closing on the property was held in September 2015, but the escrow money—minus $7,460 due to a title insurance company—was never received by the sellers. The check issued by Spitalnic to the title insurance company in the amount of $7,460 did not clear due to insufficient funds in the escrow account.
At the time of the plea, the defendant also admitted to the theft of approximately $25,000 from another client, which was included as part of the overall restitution by civil judgment ordered by the court.