(CN) - A Kansas attorney stole $460,000 from client trust funds in a Ponzi scheme, federal prosecutors said.
Robert M. Telthorst, 52, of Topeka, is charged with wire fraud and money laundering in a criminal information in Topeka Federal Court.
Telthorst took clients' money from November 2005 to August 2011 and "used it both to benefit himself and to cover up the fact he was taking money from other clients' trust accounts," the U.S. Attorney's Office said in a statement.
Two clients he defrauded were the daughters of a man identified as Otto K., prosecutors said.
"After the man's death, Telthorst was appointed to administer $463,344 for the man's two daughters," prosecutors said in the statement. "The man wanted the first daughter, identified as Sheri T., to receive a lump sum. Money for the second daughter, identified as Marlene O., was to be invested, with monthly payments to be made to her. Before providing the lump sum to Sheri T., Telthorst took approximately $22,000 for his own benefit. In the trust for Marlene O, the balance dropped from more than $208,500 to less than $150 after Telthorst removed most of the funds for his own benefit."
He also stole from granddaughters of another client, prosecutors said.
"Telthorst set up three educational gift trusts of $10,000 each," according to prosecutors' statement. "He depleted all three trusts, leaving them each with balances of less than $350."
Two other clients established a charitable trust of $80,000 for the KU School of Business, and Telhorst drained their account down to less than $1,750, according to the information.
If convicted, Telthorst faces up to 20 years in federal prison and a $250,000 fine on the wire fraud charge and up to 20 years in prison and a fine of $500,000 on the money laundering charge.
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