Attorney Ripped Off|Disabled Veterans

HOUSTON (CN) - A Houston attorney pleaded guilty to conspiring with his wife to steal $2.3 million from dozens of disabled veterans, for whom he served as a fiduciary or court-appointed guardian, federal prosecutors said.

Joe B. Phillips, 73, pleaded guilty Tuesday, moments before jury selection for his trial was to begin.

"Phillips admitted he was either appointed by the Department of Veterans Affairs (VA) to serve as a fiduciary or appointed by the courts to serve as a guardian for a number of incompetent military veterans," the U.S. Attorney's Office said in a statement. "In that role, he opened and maintained bank accounts for these veterans to receive benefit payments from the VA to pay their debts and living expenses."

Phillips conceded that he and his legal-assistant wife, 72-year-old Dorothy Phillips, illegally transferred $1.36 million from his veteran clients' accounts to their joint checking account from 2003 to 2007, the Houston Chronicle reported.

Prosecutors said: "He further admitted that he did not file a proper accounting with the court or VA for the transfer of these funds. He admitted that his wife had gambled extensively at casinos in Louisiana between 2003 and 2007."

Joe Phillips said he covered up his fraud by making false statements on his 2007 tax return, sending phony accounting statements to the Houston VA for his clients' bank accounts and creating fictitious bank accounts.

Dorothy Phillips pleaded guilty in April to conspiracy and making a false statement on her tax return. Her sentencing is scheduled for Dec. 11.

Joe Phillips pleaded guilty to two of 21 charges against him.

He faces up to 8 years in federal prison, a fine of $500,000 and may have to pay $2.3 million in restitution to his victims.

But U.S. District Judge Lee Rosenthal "told Phillips that he and his wife could face an even tougher sentence because of the number of victims, their vulnerability and the amount of losses," the Chronicle reported.

Joe Phillips is free on a $100,000 bond. He is expected to be sentenced in December.

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