“Gaines stole over $300,000 in client money and then repeatedly lied about it, including twice under oath,” said U.S. Attorney Byung J. “BJay” Pak. “We hope that this prison sentence brings a measure of justice to the defendant’s victims, who were abused and had their trust violated.”
“Gaines compounded her deceit by lying under oath and is another example of the FBI’s commitment to holding accountable anyone who violates their sworn oath to uphold the Constitution of the United States,” said Chris Hacker, Special Agent in Charge of FBI Atlanta. “Her actions not only violated her clients’ trust, but also insulted every lawyer who honors and respects the oath they took.”
According to U.S. Attorney Pak, the charges, and other information presented in court: Carla B. Gaines was an attorney, licensed in Georgia, until she was disbarred on November 18, 2019. From August 2014 through March 2016, she stole $337,400 that she had received from Clayton County, Georgia, government, to hold in escrow for payment to a Georgia business, Kelete, Inc., which owned a gas station and convenience store in College Park, Ga. After the theft, Gaines lied to Clayton County and Kelete to lull them into believing that she still had the money and payment was on the way.
In 2014, Clayton County entered into an agreement with Kelete for Kelete to sell a right of way or easement through Kelete’s property to the County, for $712,400. Gaines was retained to serve as the escrow agent for this real estate transaction. Clayton County transferred $712,400 to Gaines for her to hold in escrow and complete the transaction.
In November 2015, Clayton County and Kelete closed the real estate deal. Gaines paid $375,000 to Kelete and its bank at the time of closing. Under the settlement agreement, Gaines was required to hold the remaining $337,400 in escrow until Kelete removed certain trade fixtures and improvements on the property. In March 2016, Kelete completed the removal and requested the remaining payment of $337,400. But Gaines never paid, despite repeated demands. Instead of holding the $337,400 in escrow as required, Gaines had diverted the funds to pay for personal and law firm expenses.
Beginning in March 2016, when payment was demanded, Gaines repeatedly made false representations to Clayton County and Kelete about whether she had the money and whether payment was on the way. For example, Gaines falsely claimed that the wire was “pending,” that the wire was “stuck,” that she had a check ready for Kelete, that she was “awaiting a call from the bank,” that “the bank was holding the wire,” that she had “straightened out the issue,” and that the “wire should be processed Monday.” These representations were false. No wires were stuck, pending, held, or on their way; and no check was ready. Gaines had far less than $337,400 in her bank accounts at the time she made these misrepresentations.
Kelete sued Gaines to recover the $337,400 it was owed. As part of that civil proceeding, Gaines lied in two depositions, in March 2017 and June 2018. Gaines testified that she had paid a portion of Kelete’s funds to another client, a pastor, in error. Gaines also testified that she had called the pastor and informed him of the mistake, and that he had promised to pay the money back to Gaines. Those representations were false.
Gaines, 61, of Mableton, Georgia, was sentenced to two years in prison to be followed by three years of supervised release, and ordered to pay $330,900 in restitution. She was convicted after pleading guilty to theft from a local government that receives federal funding.
This case was investigated by the Federal Bureau of Investigation.
Assistant U.S. Attorney Stephen H. McClain, Chief of the Complex Frauds Section, prosecuted the case.