MARQUETTE - Marquette police said an embezzlement charge filed against local attorney James Edward Nancarrow relates to his alleged non-payment of a traffic crash settlement to a client.
Nancarrow, 57, of Marquette is scheduled to be arraigned at 11:30 a.m. Monday in Marquette County District Court on a 15-year felony of embezzlement greater than $50,000, but less than $100,000.
If convicted, that charge is also punishable by a fine of $25,000 or three times the amount embezzled, whichever is greater. A preliminary examination is set for 2 p.m. Nov. 16.
Marquette City Police Department Det. Sgt. Mike Kohler said the origin of the case traces back several years.
"There was a car accident in 2003, which involved some fatalities," Kohler said.
A subsequent $80,000 judgment in a civil lawsuit resulting from the accident was awarded to a Marquette woman in August 2004. Nancarrow was her attorney. Kohler said Nancarrow reportedly put the money, a third of which he was entitled to keep from the settlement, in an Interest on Lawyers Trust Account.
According to a Michigan State Bar Foundation brochure, such accounts "allow lawyers to deposit nominal and short-term client or third party funds into pooled interest or dividend-bearing trust accounts when the deposits could not earn net income (income over costs) for the client or third party. Before IOLTA, these funds were idle in non-interest bearing accounts."
The net interest or dividends generated is forwarded to the Michigan State Bar Foundation, an IRS tax-exempt charity, which uses the proceeds to support civil legal services for the poor and improvements in the administration of justice, the brochure said.
Kohler said the woman, who police did not identify, was entitled to $53,600 from Nancarrow.
"After years of trying to receive her settlement, she was unable to do so," Marquette police Capt. Gordon Warchock said.
Another attorney consulted by the woman told her to file a report with police, which she did Aug. 10. An investigation ensued.
"I was able to see that the money went into the account and did not go out to the client," Kohler said. "That money got spent and did not go to the victim."
A warrant for Nancarrow's arrest was authorized Oct. 18 by Marquette County District Court Judge Dennis Girard. Nancarrow surrendered that same day at the Marquette police station.
He was scheduled to appear Tuesday before Chippewa County District Court Judge Elizabeth Church, via teleconference in Marquette. Church was appointed to the case by the state Court Administrator's Office, after local judges who know Nancarrow recused themselves.
But defense attorney Steve Polich of Iron River said his client was "unable to make it in" for the hearing because Nancarrow has been a patient at the Northstar Health System in Iron River since the weekend.
Polich declined to reveal to Church the nature of Nancarrow's ailment, likely not wanting to disclose the health information on the record in the public hearing. Church said the information could be provided later confidentially. Polich said Nancarrow's hospital stay quite possibly might extend past Monday's scheduled arraignment hearing, which is also expected to clarify a bond issue.
District Court Administrator and Magistrate Charity Mason said Girard set the bond at $100,000 cash or surety. When Nancarrow surrendered to police and was arrested, he paid $10,000 of the bond, with police believing Nancarrow owed only 10 percent of the total. He paid the money and was released.
"We accepted what we thought was the proper bond amount," Warchock said. "We're working with the court and attorney to settle the issue."
Mason said because the bond has not been satisfied, "by our definition he has not been properly arrested."
Church said: "The warrant stays out there until the arraignment actually occurs."
Beyond the embezzlement charge, Warchock said numerous complaints have been fielded from clients of Nancarrow.
"We've heard of some other issues we believe are civil issues, not criminal," Warchock said.
In May, Nancarrow was briefly detained by Marquette County sheriff's deputies after missing a civil court hearing on why he failed to pay 102 parking tickets totaling $2,250 from the city of Marquette dating back to 2004. Nancarrow paid the outstanding fines after his release.
John Pepin can be reached at 906-228-2500, ext. 206. His e-mail address is firstname.lastname@example.org.