The divorce settlement between a lawyer convicted of defrauding his clients out of $1.28 million and his ex-wife didn’t entitled her to funds from an independent legal settlement, the Eleventh Circuit said April 9.
The government had a priority lien on the funds under the restitution order issued by the court in the lawyer’s criminal trial, the unpublished per curiam opinion said.
Wilson Smith pleaded guilty to settling clients’ claims without their knowledge, forging their signatures, depositing the proceeds in his trust account, and then using them for personal expenses. He was sentenced to 96 months in prison and ordered to pay restitution.
A company in which Wilson personally owned stock settled a lawsuit in 2018, with his share being $433,033. Wilson’s ex-wife, Frances, claimed the funds were hers because they were included in her share of their property settlement.
Under Georgia law, the government had an enforceable lien on Wilson’s property, the appeals court said. Although the government filed the lien in the wrong county, Frances isn’t among the limited classes of interest holders protected by the state’s recording requirement, it said.
Frances also had notice of the lien because she was in court when the restitution order was handed down, the court said. Also under Georgia law, a spouse has no equitable interest in property solely owned by the other spouse during their marriage, the court said.
Judges William H. Pryor Jr., Britt C. Grant, and Frank M. Hull were on the panel.
Ralph N. Jackson, Dublin, Ga., represented Frances. The U.S. Attorney’s Office represented the government.
The case is United States v. Smith, 2019 BL 125697, 11th Cir., No. 18-13476, unpublished 4/9/19.