High-profile Allentown PA defense attorney John P. Karoly Jr.,  was indicted September 25, 2008 by a federal grand jury on charges he and two others conspired to defraud his brother’s and sister-in-law’s estates of millions using fake wills.

John J. Shane, a doctor Karoly often used as an expert witness and Karoly’s son, John P. Karoly III, were also named in the indictment.  Each of the three is charged with single counts of conspiracy and two felony counts of wire fraud, according to federal authorities.

As reported at www.lehighvalleylive.com:

"Karoly’s brother and sister-in-law, Peter Karoly, and Lauren B. Angstadt, died Feb. 2, 2007, in a Massachusetts plane crash that also killed the pilot. Peter Karoly was a prominent Allentown attorney, and Angstadt was a dentist.

The couple had no children and each left multi-million-dollar estates. Shortly after their deaths, authorities allege the three defendants conspired to create fake wills dated June 2, 2006, intended to supercede authentic wills prepared in 1985."

Karoly has won multimillion-dollar settlements in brutality and misconduct suits against the Bethlehem and Easton police departments.  His attorney, Robert Goldman, says he thinks Karoly has been targeted because of these successful suits against police officers.

Karoly’s deceased brother was also a lawyer and they used to practice together.  In 1986 they had a rift and split up their law practice.

According to the indictment, as reported by Matt Birkbeck for Of The Morning Call:

"Nine days after the crash, John Karoly told family members that Peter gave him a sealed package in June 2006 to place in storage.

When John Karoly learned that Peter’s authentic will, filed in 1985, was submitted for probate to Northampton County Court on Feb. 15, 2007, Karoly created fraudulent wills for his brother and sister-in-law and subsequently enlisted Shane to sign them as a witness.

Karoly also tried to get a family member from South Carolina, identified only as ”J.F.,” to sign the fraudulent wills as a witness but J.F. refused.

The indictment continues:

On Feb. 20, 2007, Karoly began notifying family members, including sisters in Florida and New Jersey, that he had found the ”original will” of Peter Karoly inside the sealed envelope that was in storage, and that it bequeathed the bulk of his estate to John Karoly, along with gifts to his two sons and various nieces and nephews.

That will and a fictitious Angstadt will were submitted to Northampton County Court on Feb. 22, 2007. The eight-page Peter Karoly will, dated June 2, 2006, left all of Peter’s money and property to his wife. But if she died, the majority share of the estate would go to John Karoly, including all cases, clients, awards, verdicts, monies and receivables from Peter Karoly’s law firm.

John Karoly was also left Peter’s law practice and law office at 1511-25 Hamilton St. in Allentown, all investment and brokerage accounts owned by Peter Karoly and his wife, and control of eRAD, a medical imaging company based in Greenville, S.C., that Peter Karoly founded and ran as chief executive officer.

Peter Karoly’s 1985 will liquidated the law firm and divided all property and money among family members of Peter Karoly and his wife, The Morning Call reported in 2007.

Soon after being notified of the new will, Karoly’s sisters protested, claiming it was fraudulent. FBI agents raided John Karoly’s home in May 2007, seizing boxes of documents and computer files."

Blogging credit to Prof. Gerry Beyer at Wills, Trusts & Estates Prof Blog.

Here is Neil Hendershot’s post when the wills were contested in April 2007.