Coral Gables attorney pleads guilty to money laundering

Coral Gables attorney Michael J. Scaglione pleaded guilty to federal money laundering charges to aid a supposed stock fraud.

Scaglione, who was admitted to practice in Florida in 1999, was still listed on the Florida Bar website as a member in good standing on Monday. Susannah Lyle, a spokeswoman for the Bar, said in an email that there was an open investigation on Scaglione related to the criminal case. He entered his guilty plea in the Eastern District of New York on Oct. 9, and will be sentenced Jan. 16.

The 41-year-old attorney was arrested at a Miami Beach hotel in July and charged with agreeing to launder more than $750,000 from an apparent penny stock fraud scheme. The scheme was actually designed by an undercover law enforcement agent who posed as a criminal stock promoter in the sting operation.

Scaglione stated that he believed the undercover agent was a middleman working with corrupt stockbrokers who artificially inflate prices for worthless stock so they can bag commissions. He agreed to launder the proceeds of this stock fraud through his attorney escrow account to conceal the funds from the U.S. Securities and Exchange Commission and the IRS, according to the complaint.

The attorney retrieved cash from a FedEx box in the lobby of a Miami Beach hotel and funneled it from his escrow account into the undercover agent’s bank account in New York, according to the complaint. He received more than $25,000 in fees in return, authorities allege.

Scaglione told the undercover agent posing as a fraudster that their conversations were “completely privileged,” according to authorities.

Since he’s out on $600,000 bond, there’s nothing to stop Scaglione from practicing law in Florida for the time being. Over the years, he has represented hundreds of clients in U.S. Bankruptcy Court.

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