UPDATED: Firm says Atlanta law partner embezzled $30 million

A one-time managing partner of a prominent Atlanta law firm that specializes in real estate closings has been accused by his own practice of embezzling more than $30 million from escrow and other accounts, according a lawsuit filed this week in Fulton County Superior Court.

Nathan E. “Nat” Hardwick IV, who ran the residential practice at Morris Hardwick Schneider, allegedly diverted money held in accounts by the firm and a related title company for personal expenses, such as a portion of the purchase price of a $3 million condo in the St. Regis Atlanta hotel and $4 million he allegedly wired to casinos.

Ed Garland, an attorney for Hardwick, called the allegations “false,” and said “Nat looks forward to clearing his name.”

“Nat became aware of a problem with the accounting earlier this summer and immediately alerted his partners and initiated a review by outside auditors,” Garland said in a statement.

“…Anybody who knows Nat knows that he loves the law firm, its employees, the attorneys and the firm’s many loyal clients. He would never knowingly or intentionally take money he was not entitled to or harm the firm or its clients in any way,” Garland said. “The law firm was profitable, and Nat believed that all of the money he received was properly distributed to him as his share of the profits of the firm.”

Phone and email messages left for representatives of Morris Hardwick Schneider and the title company, Landcastle Title, were not immediately returned.

Two messages left for an attorney for Morris Hardwick Schneider and Landcastle also were not immediately returned.

Fidelity National Title Group, a major title insurance firm, has stepped in to acquire a 70 percent stake in Landcastle. Fidelity “stands behind the funds you have on deposit, or may in the future deposit” with Landcastle or the law firm, according to a letter to clients posted on the Morris Hardwick Schneider website.

A separate letter to Morris Hardwick Schneider and Landcastle customers dated Monday states:

“As you may have heard, we recently learned of substantial escrow account misappropriations within the law firm of Morris Hardwick Schneider. These activities could have negatively impacted the future of our company and our customers. However, Fidelity National Title Group, one of our long-standing and trusted partners, has agreed to step in as a 70% owner of Landcastle Title.”

The letter also said “a primary focus of both Landcastle Title and Fidelity is to protect the many consumers, customers, lenders and employees who would have been harmed by the escrow account misappropriations.”

Hardwick has resigned from the firm, according to the letter.

The lawsuit contends Hardwick “systematically depleted the Firm accounts, including Firm Trust Accounts and Firm Operating Accounts for his personal benefits.”

He also is accused of siphoning funds from certain Landcastle accounts, and the lawsuit contends that Hardwick “raided other Firm and/or Landcastle escrow or trust accounts” and shifted money between accounts to “avoid discovery of the deficiencies.”

The suit also said Hardwick created fraudulent bank records to conceal shortages.

Among the other allegations in the suit: Hardwick allegedly diverted $6.3 million to a company he controlled, $1 million for private jet services and about $645,000 for losses in failed real estate investments.

Morris Hardwick Schneider has law offices 13 states according to its website. The present firm was founded in 2005 following a merger of the Jackson and Hardwick and Morris & Schneider law firms.

Check myajc.com later for more.