Client who trusted Ira Hatch with $1.14 million returns to stand today

INDIAN RIVER COUNTY — On Tuesday afternoon in the Ira Hatch theft trial, Robert Lowe began testifying about depositing $1.14 from the estate of a friend with Hatch’s Coastal Escrow Services and the difficulties he had getting Hatch to release the money.

“I was getting calls from the family,” Lowe said. “I thought that everything had been wound up, the property had been sold, personal property had been dispersed and that we had some cash. I wondered why we couldn’t settle the estate.”

Today he will tell the rest of the story to the jury of how those funds Lowe expected disappeared to the jury. After the state concludes its questioning of Lowe, defense attorney Gregory Eisenmenger is expected to vigorously cross-examine Lowe.

Lowe served as personal representative for the Estate of Hector Van Lennep after Van Lennep, a close friend of Lowe’s, died in 2006. Hatch had been Van Lennep’s attorney so he seemed logical to retail him to handle the probate of the estate.

The cash deposited with Coastal Escrow came from the sale of Van Lennep’s luxury home and Low testified that even after the personal property had been sold and all the estate’s bills had been paid, he was having trouble getting Hatch to settle the estate and distribute the money to Van Lennep’s heirs.

Lowe told the court that the reason the Van Lenneps entrusted their money to Coastal Escrow was because Hatch had promised them they would earn 5.1 percent interest.

After Hatch closed Coastal Escrow on Sept. 4, 2007, Lowe sued the disbarred attorney for the family’s money. More fortunate than most of the people who still had money on deposit with Coastal Escrow when the doors closed, Van Lennep’s estate was awarded approximately $200,000 in February 2009 from Hatch’s malpractice insurance company, Navigators Specialty Insurance Co.

Hatch was arrested on Jan. 11, 2008, accused of stealing or mishandling up to $4.5 million in client funds entrusted to Coastal Escrow Services and to his law firm of Hatch & Doty P.A.

Subsequently, Hatch was declared indigent and is being represented pro bono by Eisenmenger, who is a member of Hatch’s family by marriage.

Since his arrest, Hatch has been incarcerated at the Indian River County Jail as he was unable to post the $3 million bail set for him by Judge Dan Vaughn, the first judge to handle this case.

When Vaughn was transferred to another circuit, Judge Robert Hawley had the case for more than one year until he recused himself in early May and Senior Judge James Midelis was called out of retirement to take the case to trial. Midelis is a long-time former prosecutor who was known for handling major felony cases and capital crimes.

Also scheduled to testify Wednesday morning is a former employee of Hatch who worked on the Van Lennep Estate and dealt with Lowe regarding the delays in retrieving the money for the estate’s beneficiaries.

In opening arguments, Assistant State Attorney Lev Evans stated that Hatch told members of the staff to devise stall tactics, to put off paying the large sum as long as possible.

The state has argued that the Van Lennep funds were used to feed a huge “Ponzi scheme” in which Hatch allegedly recycled the funds of new depositors to pay out money when old depositors needed their down payments back for closings or their rental security deposits back to pay tenants and expenses.

Prosecutors also claim Hatch dipped into Coastal Escrow funds regularly to pay for expenses at Hatch & Doty and to fund an extravagant personal lifestyle for his family.

The defense’s case hinges upon a theory that Coastal Escrow Services was forced to close due to business losses and not to theft. The defense is also stated that all the funds paid out to Hatch — an estimated $200,000 to $250,000 per year plus $10,000 for auto expenses and direct payments for personal items such as a $22,000 watch for Marjorie Hatch — represented the payment of legitimately earned legal fees and fees for Hatch’s services to Coastal Escrow and to Hatch & Doty clients.

Court resumes at 9 a.m. with the former Hatch employee up first and Lowe to return to court at 10:30 a.m. Senior Judge Midelis presides in Courtroom 1 at the Indian River County Courthouse and a jury panel of six plus four alternates is hearing the case.

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