Former Bend lawyer admits $1.1 million fraud

A former Bend lawyer pleaded guilty Monday in Eugene federal court to one count of conspiracy to commit wire fraud and could face a 20-year sentence when he returns to court next March, federal officials said.

Appearing before U.S. District Judge Michael McShane, Bryan Gruetter, 55, admitted to diverting more than $1.1 million of client funds, the U.S. Department of Justice reported.

According to court documents, Gruetter was a personal injury attorney with offices in Bend and Portland.

As part of his guilty plea, Gruetter admitted that he and others illegally diverted more than $1.1 million in client settlement funds via interstate wire transfers, prosecutors said.

He also admitted that he and others used his clients’ money to pay for personal and business expenses, rather than to pay the clients or to pay the clients’ legal, medical, insurance, or other associated costs as promised.

In February of 2012, the Oregon State Bar took custody of defendant’s law practice, and on March 9 of last year, Gruetter resigned his law license, choosing not to contest allegations that he neglected clients’ legal matters, failed to communicate with clients, and failed to deliver funds to clients.

Sentencing is set for March 17 at 9 a.m. before Judge McShane. The maximum penalty for conspiracy to commit wire fraud is 20 years in prison and a $250,000 fine.

This case was investigated by the FBI and IRS-CI and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.