Sunday, September 12, 2010

2-Years for Attorney who Gambled Away $2.5 million Client Dollars

Bruce Vielmetti at the Milwuakee-Wisconsin Jounal Sentinel reports on the sentencing of the Greenfield, Wisconsin lawyer who gambled away client funds of $2.5 million dollars.  His report:

"A Greenfield lawyer who gambled away nearly $2.5 million of a client's money said at his sentencing Friday that playing the slots 'was like the greatest drug there ever was,' but that he hasn't gambled since his scheme was uncovered 22 months ago.

Thomas H. Koch, 46, has been in treatment for a gambling addiction and attends Gamblers Anonymous meetings twice a week while working as a dishwasher.  'Gambling isn't about the money,'  he told Circuit Judge David Hansher. 'That's just the means to the end.'  Koch said he had tried to stop many times, but couldn't until he was caught. He said he's happy to be away from the casino, and he apologized to his client, family, friends, the court and the state bar.

Prosecutors recommended four years, and Koch's attorney suggested a year in jail with release for work and therapy, and a stayed prison sentence to be served if Koch failed to meet conditions.  [Judge] Hansher credited Koch for quickly taking full responsibility for his crime once it was uncovered, for surrendering his law license and committing to treatment for his addiction. He agreed Koch probably didn't need prison to deter him from going back to the behaviors that have essentially ruined his life.

But because of a need for general deterrence - a message to others that stealing so much money can't go unpunished - [Judge] Hansher sentenced Koch to two years in prison, followed by four years of extended supervision. He must continue with Gamblers Anonymous and psychiatric treatment, and not enter any kind of gambling establishment anywhere, or gamble online.  He also ordered Koch to pay $2,421,768.57 in restitution, even though Assistant District Attorney Kurt Benkley said Koch has no assets and likely will never pay the money back.

Nearly two dozen people were in court to support Koch, and more than 30 submitted letters to the court. His wife said that even when he was gambling, he always was an outstanding, involved, caring father to their three sons, ages 7, 10 and 12. His sister said that in their family of eight children, they were expected to be self-sufficient and she was sad he felt he could never confide his problem to her. Since his arrest, the whole family's communication has improved, she said.  'For the first time in his life, he seems calm,' Kristin Koch said.

Koch, a 1990 graduate of Marquette University Law School, operated his own law office at 3466 S. 13th St. Affiliated Computer Services, a Dallas-based company, works for medical insurers, checking to see whether their clients are suing to recover costs for their injuries when possible. ACS hired Koch in 2001 to pursue such cases in the Milwaukee area for ACS's insurance company clients. In 2007, a new litigation manager at ACS noticed Koch had about 360 open claims. When he failed to reply to her request for status updates, she found that about 270 had been settled, but that no proceeds had been forwarded to ACS. Company officials came to Milwaukee in October 2008, and Koch admitted his embezzling.

Koch had told [Judge] Hansher that in 2006 he signed up for Potawatomi's self-restriction list. He said he stayed away for two weeks, but when he returned no one turned him away, and that he collected on hundreds of jackpots after he was supposed to be banned. 
I've known some compulsive gamblers in my life.  A compulsive gambler with access to a fiduciary account is a combustible situation for the client(s).

The 2003 film with Phillip Seymour Hoffman, Owning Mahowny, probably comes closest to capturing the essence of what Thomas Koch experienced at the height of his addiction. Watching this movie was physically sickening for me, no doubt I was seeing a manifestation of my separate issues played out through the gambling addiction of the protagonist. I imagine based on things said in 12-step meetings that people struggling with this addiction suffer the same sort of "high" described by crack addicts.


  1. Still kinda sucks if it was your money he lost. Maybe his local Bar Association could help make his former clients whole...

  2. JFB--

    Thanks for your comment, you are right of course. In many states, there are Client Security Funds that are funded by lawyer registration fees--for precisely this purpose. Aint' right--which is why it's here.