PARK CITY — A former Park City attorney already convicted of theft has now been convicted of fraud.

Gary William Nielsen, 68, was found guilty of communications fraud, a second-degree felony, Thursday following a three-day jury trial. He previously pleaded guilty to a single second-degree felony theft charge. Prosecutor Matthew Bates said Nielsen resigned from the bar after the theft charges, although the two crimes happened about the same time.

In the theft case, Nielsen was asked to hold $560,000 in escrow for Creekside Funding for a real estate development project in November 2007. The following year, Creekside went to Nielsen and asked for a portion of the money and Nielsen provided them with $213,000, Bates said. The following spring, the company asked for the remainder of the money and Nielsen said he had spent it.

Court records show Nielsen pleaded guilty and was sentenced to one to 15 years in prison, with the prison time suspended. The man was then ordered to spend 365 days in jail, 72 months on probation and pay 25 percent of his gross personal income to restitution.

After the sentencing, Bates said one of his Nielsen's longtime clients, Robert Sacks, came forward and told them that he loaned Nielsen $150,000 that was never repaid.

"What we learned from Robert is that in November 2008, when Creekside went to Gary and said, 'We need our money,' Gary didn't have that money," Bates said. "He had about $100,000 so Gary went to Bob and said, 'I need a loan.'"

Apparently, Nielsen said the money was to help with some business-related problem involving the IRS. According to charges filed in the fraud case, Nielsen told Sacks that he would personally guarantee the loan and secure it by putting up his law office's furniture, decor and equipment as collateral.

"(Sacks) gave him $150,000 and he gave that to Creekside," Bates said. "(Nielsen) was basically robbing Peter to pay Paul. He obtained a loan under false pretenses then it finally caught up to him in March (2009)."

In April 2010, Nielsen declared bankruptcy and his company defaulted on the loan.

Nielsen was charged with communications fraud and was eventually convicted by a jury. According to Bates, Sacks testified at trial that he had done business with Nielsen for years and trusted him as a friend and business colleague.

Bates said Nielsen testified that he had been living a fairly lavish lifestyle, but that when the recession hit and the private loan market dried up, he didn't change his spending patterns.

Nielsen's attorney, Thomas Howard, said his client made an "honest mistake" when it came to the loan, primarily over whether it was free and clear.

"The second (case) was an honest mistake," Howard said. "With the first one, he acknowledges he did something he should not have done — taken money from his clients' trust account hoping he would be able to pay it back."

When Nielsen is sentenced on the fraud charge on Oct. 22, prosecutors will ask for a prison sentence.

"We feel that Gary should have done the prison time the first time," Bates said. "Looking at the amount of money he took, the trust he violated — attorneys should hold a position of high trust in the community. And when they violate that trust, our office feels the sanctions should be harsh as a deterrent to violating that trust."

Howard said this has all been "very difficult" on his client, who stands to lose his current job and source of income. "This will devastate his family and he will lose anything he had and will not be able to pay restitution to anyone," he said.


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