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A federal judge in South Florida sentenced a former Boca Raton attorney to prison for operating a Ponzi scheme.
Craig Sherman, 81, formerly the managing partner at Sherman & Sherman, was sentenced by U.S. District Judge Robin Rosenberg, who sits in the Southern District of Florida, to 24 months’ imprisonment, followed by three years of supervised release. In addition, the court ordered Sherman to pay over $7.2 million in restitution.
“This is another tragic tale of a lawyer who for reasons unknown appears to have abandoned both the legal profession’s code of ethics and adherence to the rule of law,” said Jan L. Jacobowitz, a legal ethics expert at the University of Miami School of Law, who is not involved in the case. “All individuals, but especially lawyers who have the benefit of legal training, should pause and consider the repercussions before crossing an ethical line or violating the law.”
Laurence Bardfeld, the lead attorney in the prosecution at the U.S. Attorney’s Office in Fort Lauderdale, and Douglas Duncan, a partner at Roth & Duncan in West Palm Beach who represented Sherman, declined to comment.
It is a long fall for Sherman, who started his career serving six years in the Illinois Air National Guard and whom the Florida Bar admitted in January 1975 to the practice of law after he earned his Juris Doctorate from Northwestern University Pritzker School of Law. Following law school, he worked at Boyd, Blanshan, Sherman in Chicago where he later became a partner.
Nearly six years later, Sherman moved to Miami and became a partner at Sherman & Fischman, with clients such as the Dan Marino Charitable Foundation, according to his LinkedIn page. Over 15 years later, Sherman formed a new law firm, Sherman Law Offices, with his brother and his son, and in November 2010, he opened Sherman & Sherman.
Sherman, the town attorney for the Town of Bay Harbor Islands, saw his trouble begin at Sherman & Sherman, when he told investors he was authorized to broker the sale of development rights in the town, per court records. Sherman indicated that investors could loan money for construction projects that provided interest payments at a rate of 6% to 10% annually.
However, instead of using the money as he claimed he would, Sherman allocated the capital to pay for his personal expenses and to subsidize his law firm operations, per court documents. And like a classic Ponzi scheme, he used investment money from some investors to cover payments due to other investors, totaling a nearly $7 million fraudulent scheme from 2013 through 2020.
In March 2020, the Supreme Court of Florida entered an order of disciplinary revocation without leave to seek readmission. And five months later, Sherman pleaded guilty to two counts of federal wire charges, leaving him facing up to two decades in prison.
Ahead of the sentencing, Bardfeld, the assistant U.S. attorney, raised doubts about Sherman’s remorse and apologies, pointing out that during the investigation, Sherman took lavish trips to Europe, which included fine dining.
Rosenburg limited Sherman’s incarceration to a two-year prison term and the $7.2 million restitution order.
Sherman must surrender for incarceration by noon on Feb. 14.
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