Lawyer Steals From Client, Gets 2 1/2 Years In Jail

A federal judge who yesterday handed a 2 1/2-year prison sentence to Kirkland attorney John Woodley, who prosecutors said stole stock from a drugged and dying client, noted that the accused man's crimes were particularly striking because he violated his position of trust as a lawyer and because he was rich in the first place.

U.S. District Judge Thomas Zilly turned down requests for leniency, telling Woodley's lawyers that even if he could find a legal basis for their requests, he would exercise his discretion and deny them.

Invited to speak before the judge imposed sentence, Woodley said there were "many things" he wished to say, but none his lawyers would permit because of a planned appeal.

The judge then observed there was "overwhelming evidence" to support Woodley's complicity in a "well-thought-out" plan to defraud the government, and that Woodley's true attitude toward taxes was displayed when he boasted of having found "big-bucks deductions."

In May, a jury convicted Woodley, 47, of Bellevue, on 44 counts of mail fraud, tax evasion, and filing false income-tax returns.

The charges against Woodley stemmed from his relationship with a former client, Elizabeth Lynn of Medina, who died of cancer eight years ago, and his handling of her $20 million estate.

Prosecutors contended Woodley took advantage of Lynn when she was vulnerable - sick and dying - to steal stock from her to gain control of a nursing home in Ely, Nev.

Woodley then claimed tax deductions he wasn't entitled to and used the pirated corporation to defraud the government of about $500,000 in Medicare and Medicaid payments. Woodley was accused of personally benefiting from the fraudulently obtained tax deductions - about $88,000 worth - but not of receiving the Medicare and Medicaid payments, which went to a trust fund.

Yesterday, in addition to imposing the prison sentence, Zilly ordered Woodley to make restitution of about $328,000; fined him $6,000, and placed him under court supervision for three years after his release, during which he is barred from serving in a fiduciary position - managing the money or property of others - except for his own family's affairs.

Zilly ordered Woodley to surrender by mid-September.

Assistant U.S. Attorney Carl Blackstone had urged Zilly to deal sternly with Woodley, arguing that the attorney was motivated by "greed and avarice," Blackstone noted that Woodley had a net worth of $3.1 million in 1984 and owned a $300,000 sailboat. He also said Woodley has put aside $150,000 to cover appeal costs.

Woodley's wealth was not lost on Zilly, who noted the lawyer, who now faces disbarment, made more money in a year than many citizens earn in several years.

Defense attorney Peter Byrnes asked for a light sentence, saying Woodley is on the "edge of financial collapse" and is being forced to sell the family home, and that the publicity surrounding the case "has damaged him irreparably as a lawyer and as a person."

Byrnes also argued that the entire case against Woodley was tainted by governmental misconduct.

He alluded to a hearing last month, when Judge Zilly turned down defense requests to set aside the verdicts, but also sanctioned prosecutors for misconduct for holding back evidence that tended to exonerate Woodley.

The judge also ordered the government to pay costs incurred by the defense to establish the government's misconduct, and Byrnes has submitted a bill of nearly $22,000. The government maintains the sanctions were unwarranted, and has appealed Zilly's order requiring payment of the costs.