NEW YORK (Legal Newlsine) - Martin Weisberg, a former corporate partner in the New York office of an international law firm, pleaded guilty Wednesday to one charge of money laundering and one charge of conspiracy to commit securities fraud.

Weisberg, 61, could be sentenced to 10 years in prison on the money laundering charge and five years in prison on the securities fraud conspiracy charge.

The U.S. Attorney for the Eastern District of New York alleged that Weisberg was laundering money that he stole from a $30 million escrow account established on behalf of one of his clients. He allegedly told his client that the account could not earn interest.

But the truth was that the funds were placed into an interest-bearing account which earned approximately $1.6 million in interest during a 14-month period, the SEC says. Weisberg spent approximately $1.3 million of it without the client's knowledge, the SEC says.

Weisberg also allegedly misled his client by saying that the bank did not send monthly account statements. Instead, Weisberg sent the client letters on law firm letterhead stating false account balances, the SEC says.

The securities fraud conspiracy is the result of Weisberg's involvement with a fraudulent kickback scheme. According to the DOJ, he received payments from co-conspirators in connection with the issuance of publicly-traded securities by two of Weisberg's former corporate clients.

According to the DOJ communique, Weisberg conspired to conceal his co-conspirators' ownership and control of securities issued by two public companies, Xybernaut Corporation and Ramp Corporation. He was the outside counsel for both. He was also a member of Xybernaut's Board of Directors.

The conspirators secretly issued discounted shares of Xybernaut and Ramp to co-conspirators located in Israel, the SEC said. They in turn sold the shares and used the proceeds "to pay kickbacks to the defendant and others in exchange for making false statements in filings with the Securities & Exchange Commission regarding the conspirators' ownership and control over the securities."

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