- File photo
- Gregory Chernushin was once among the city's most prominent attorneys.
Gregory Chernushin, a local attorney disbarred last year for converting client money to his own use, faces more scrutiny, as does his wife.
An arrest warrant for Chernushin was issued last week accusing him of six felonies in connection with alleged theft of client money, according to District Attorney's spokeswoman Lee Richards.
As of the Independent's press time, the arrest affidavit had not been released, but charges include four counts of theft of $20,000 to $100,000, a Class 4 felony, and two counts of forgery by check or commercial instrument, a Class 5 felony, Richards says. The most serious charges carry sentences of two to six years in prison.
His bond was set at $50,000.
Meantime, Chernushin's wife, Andrea, is the target of a filing in U.S. Bankruptcy Court that seeks an accounting of assets Chernushin transferred to her allegedly to avoid payment of his debts, which include more than $350,000 owed to the IRS, as well as hundreds of thousands owed to clients and others.
Geoffrey Atzbach, an attorney for one of Chernushin's victims, said, "From my standpoint all I can say is that I'm grateful the DA is doing his job. Even if the victims aren't repaid what was stolen from them at least they'll be comforted knowing that Chernushin may get the justice he so richly deserves."
Reached by phone Tuesday morning, Chernushin declined to comment.
Chernushin, a longtime attorney in Colorado Springs who represented clients injured in car crashes or work-related accidents, closed his practice in early 2015 and stopped communicating with clients. Several clients filed complaints with the Office of Attorney Regulation Counsel alleging he took their settlements without their permission. Chernushin was disbarred in July and admitted in the disbarment agreement he took $334,865 from a handful of clients.
But that figure has ballooned as more lawyers got involved on behalf of Chernushin's former clients; the list of clients who might be due money, as reported in his bankruptcy case, contains dozens of names.
Last fall, Chernushin's Chapter 7 bankruptcy — which forces the sale of assets to pay debts, including a person's home — stated he owes people and companies nearly $1.5 million, but his assets are valued at $847,628. Most of that value is vested in his home at 1515 W. Cheyenne Road in Colorado Springs, valued at $595,000, and a condo in Crested Butte, which his bankruptcy filing says is worth $220,000. Both have mortgages against them.
The Springs home is currently listed for sale at $613,000, a drop from $699,000 several months ago. The status of the condo isn't clear.
Bankruptcy trustee Robertson Cohen is seeking information through the court in order to capture assets that Chernushin might have shuttled to his wife prior to and since filing for bankruptcy that are fair game for creditors, if the assets can be found and seized.
Among those are:
• Proceeds from the Cheyenne Road home. Robertson's petition notes that Chernushin bought the house in his name, not jointly with his wife, but now claims the home is jointly owned and that half interest in it was transferred to her in April 2010 via a quit claim deed.
• $5,000 Chernushin obtained from insurance coverage paid for damage to the home caused by heavy rains in September 2013, as well as an undisclosed amount of an insurance settlement for a storm that hit in the spring of 2014. Both amounts, the filing alleges, were transferred to Andrea Chernushin.
• Proceeds from a settlement with a neighbor the Chernushins sued over a bridge they alleged caused their home to flood in the September 2013 rains. Midway through the lawsuit, filed in 2014, and shortly before he filed bankruptcy in August 2015, Chernushin withdrew from the case, leaving his wife as the plaintiff. A settlement was paid in September 2015.
• Other funds, described in the court filing as "earnings as an attorney and from settlement funds reached on behalf of his clients" which were transferred to his wife between August 2011 and Aug. 16, 2013. The petition in bankruptcy court also alleges money from his earnings and client settlements were transferred to his wife between 2013 and 2015.
The trustee's petition asks the bankruptcy court to void Andrea Chernushin's interest in the house and allow it to be sold, and to allow recovery from Chernushin's wife of other assets he transferred to her.