Ex-lawyer given three years for defrauding clients

SEATTLE — A former Everett lawyer apologized and wept Friday before being sentenced to three years in federal prison for convincing clients to invest in a real estate investment scheme that helped line his own pockets.

A tearful Barry Hammer, 62, said he never intended to hurt anyone. Some of his clients lost hundreds of thousands of dollars.

“I assume full responsibility for all of my errors,” Hammer said. “I did it all myself. I have no one to blame but myself, and I do blame myself.”

Hammer told U.S. District Judge Marsha Pechman that he “was blinded by the expected return that I would get” after he acquired 35 acres of developable land near Sultan for far less than its value.

Hammer bought the land when it was auctioned by the federal government because its owner refused to pay taxes. He then tapped clients for funds to help develop the land. He violated ethical prohibitions against lawyers going into business with their clients. He broke the law when he misrepresented the true nature of the investments and the risks, the judge was told.

It wasn’t a typical fraud case where the victims were conned by somebody who offered a get-rich-quick scheme by somebody of dubious credentials, assistant U.S. attorney Mark Parrent said.

“Here the investors were doing the most cautious thing possible,” Parrent said, relying on the advice of their attorney.

Hammer in May pleaded guilty in to a single count of wire fraud. As part of the plea agreement, he admitted engaging in a scheme to bilk clients of up to $1 million. In addition to working as an attorney and preparing tax returns, Hammer offered tax shelters and retirement funds through his law practice.

He did not warn clients that the money they gave him in many cases wound up in his pockets, or that his investments often were bankrolled by little more than his promises to pay.

Hammer’s business dealings and law practice dissolved in a complex $13 million bankruptcy. His fraud was exposed in 2004 when a former law partner realized what was happening and reported the violations to the Washington State Bar Association.

He later surrendered his attorney’s license in lieu of disbarment.

Hammer’s law firm was a fixture in downtown Everett for 29 years. His attorney, Russell Aoki, said Hammer still faces crippling debt as a result of his poor decisions, and scant prospects for landing a well-paying job.

He asked that Hammer receive two years in prison, a bit more than half as long as prosecutors requested.

When the judge asked Hammer to detail his efforts to find work since he lost his law practice, he launched into a lengthy story about trying to be hired to administer the affairs of a nonprofit organization in Everett that helps abused children.

Hammer said he’d called the county prosecutor three times in a week, asking for an interview, but never got a call back. Hammer said he understood, but also appeared surprised.

Pechman told Hammer that he will need to humble himself, and take a job flipping hamburgers or pumping gas to start trying to repay the money he took from clients.

She said the three year sentence — about a five months less than the least punishment under advisory guidelines for sentencing federal crimes — reflected the good Hammer had done with much of the rest of his life.

She also sentenced Hammer to 250 hours of community service, and encouraged him to spend his time in prison thinking hard about why he wound up on a criminal track.

“There is something about yourself that I think you need to examine closely,” Pechman told Hammer.

Reporter Scott North: 425-339-3431 or north@heraldnet.com

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