Maryland attorney charged with defrauding companies out of $8 million

A U.S. Dollar banknote is seen in this illustration taken May 26, 2020. REUTERS/Dado Ruvic/Illustration

Federal prosecutors in Manhattan on Friday charged a Chevy Chase, Maryland, attorney with defrauding a medical equipment company and a Hong Kong investor out of more than $8 million he had promised to hold in escrow.

Brian O’Neill, the 48-year-old managing partner of O’Neill & Partners LLC, is facing two counts of wire fraud, one count of perjury, and one count of making false statements.

A criminal defense lawyer for O’Neill could not immediately be reached. He has been arrested and was slated to appear before a magistrate judge in Greenbelt, Maryland, on Friday, the Manhattan U.S. attorney’s office said. A spokesperson for the office did not respond to a request for comment.

Prosecutors allege Medequa LLC, a Pennsylvania medical equipment company, and SonerMed LLC, a Florida-based medical wholesale company, hired O’Neill & Partners to act as an escrow agent early in the COVID-19 pandemic for a deal in which Medequa and a humanitarian group would buy six million items of personal protective equipment (PPE). The PPE was intended to be donated to the Federal Emergency Management Agency.

Medequa gave O’Neill $5.1 million to hold in escrow, but O’Neill used the money for his own deals to buy PPE, prosecutors said.

O’Neill “violated the canons of his profession to put self-interest above the interests of his clients; to be blunt, he stole their money,” Manhattan U.S. attorney Damian Williams said in a statement.

Medequa filed a civil lawsuit against O’Neill & Partners in Manhattan federal court in July, after its deal with SonerMed fell through, alleging O’Neill refused to return the company’s money. The judge overseeing that case, U.S. District Judge Alvin Hellerstein, held O’Neill in civil contempt in September after he failed to deposit the full $5.1 million into a court-controlled account.

Prosecutors said O’Neill made false statements to FBI agents and to Hellerstein about the status of the money.

O’Neill did deposit $3.3 million in an attempt to satisfy Hellerstein’s order. But Manhattan prosecutors said that money came from an unidentified Hong Kong investor whom O’Neill also allegedly swindled.

That investor was also looking to purchase PPE, and had retained O’Neill & Partners to hold that money in escrow, prosecutors said.

O’Neill was “robbing Peter to pay Paul,” Williams said.

EDITOR’S NOTE: This story has been updated to include more detail about the charges.