Mike Berlon, a former state Democratic Party chairman accused of defrauding his law firm’s clients of more than $1.8 million, was arraigned Friday in U.S. District Court in Atlanta.
Berlon, who practiced in Grayson, was indicted on mail and wire fraud charges by a federal grand jury Tuesday. He is accused of taking clients’ funds through false pretenses.
Berlon, 55, could not be reached for comment Friday.
In one instance, according to prosecutors, Berlon received clients’ money to set up trusts but used the money instead for personal gain. In another instance, he required two individuals to provide a percentage of an expected loan amount as a down payment for his help in getting them the loan to start a business, according to prosecutors
Prosecutors said Berlon received more than $1.8 million from clients between 2008 and 2013. He’s accused of using some of the money to pay an American Express bill and to repay other clients.
U.S. Attorney Sally Quillian Yates said Berlon’s clients “came to him for legal help, and instead he drained their bank accounts.”
Berlon announced in May 2013 that he would step down from his four-year term as state Democratic Party chairman amid mounting legal problems and growing pushback from fellow Democrats who feared his leadership could complicate the party’s comeback bid in the upcoming fall elections. He had led the party since 2011.
“The Democratic Party of Georgia desired and secured the resignation of Berlon more than a year ago,” said Michael Smith, a spokesman for the state party. “Under new leadership, the party is thriving and we continue to look forward, rather than behind.”
According to the State Bar of Georgia, Berlon, who began practicing law in Georgia in 1992, voluntarily surrendered his license this past June after being accused of misrepresenting a widow in a medical malpractice case.
A special master investigating a formal complaint against Berlon found that he began representing the widow in 2010 despite concerns that the statute of limitations had expired. Berlon continued representing the woman through 2012 but never filed an action on her behalf, the special master reported.
The voluntary surrender of his license was tantamount to disbarment, according to the State Bar.
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