Disbarred Cedartown Attorney Pleads Guilty to Stealing More Than $2.5 Million from Injured Clients

U.S. Attorney’s Office Press Release

Miles Lamar Gammage, 59, a recently disbarred attorney from Cedartown, Georgia, pleaded guilty today in federal court to charges that he defrauded more than 50 of his seriously injured worker’s compensation clients out of settlement funds they were owed.

United States Attorney Sally Quillian Yates said, “This former attorney has now admitted his blatant and extensive misuse of his clients’ money. By his own admission, instead of helping his clients receive the compensation that they were owed and that they needed for the treatment of their injuries, he used their settlement money for his own selfish purposes—and hurt people who were already hurting.”

Mark F. Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “As the representing attorney for many worker’s compensation claimants, Mr. Gammage was counted upon to provide legal counsel and facilitate compensation to these claimants. Instead of the expected level of due diligence, these claimants saw their money unlawfully diverted to their attorney and his law firm. Mr. Gammage will now have to answer for his actions.”

“Miles Gammage victimized many persons in his community causing them great financial harm and personal distress. The GBI is proud to have partnered with federal authorities to bring him to justice,” said Vernon Keenan, Georgia Bureau of Investigations Director.

According to United States Attorney Yates, the charges, and other information presented in court, Gammage was licensed to practice law in the state of Georgia from June 1979 through January 2012. Gammage owned and operated The Gammage Firm in Cedartown, Georgia, where he specialized in workers’ compensation cases and represented people who were seriously injured at work. From approximately January 2008 through January 2012, Gammage converted more than $2.5 million of his clients’ settlement funds to his own use. Gammage used the stolen funds to pay his own expenses and to pay his law firm’s payroll and operating expenses. In furtherance of the scheme, Gammage settled claims on behalf of clients without authorization; failed to notify clients that he had received their settlement checks; forged clients’ names on settlement checks and deposited those checks into bank accounts that he controlled; commingled clients’ funds with his own funds; and refused to provide clients with a full and accurate accounting concerning the disposition of their funds.

When clients asked why they had not received their settlement funds, Gammage blamed the delay on others. He also delayed disbursing any portion of the settlement funds to clients as long as possible. When clients insisted that they needed money to pay medical bills and purchase medication, Gammage tried to pacify them by giving them partial payments, which he referred to as “advances” and “interest-free loans.” By engaging in such tactics, Gammage lulled his clients into a false sense of security and delayed their complaints to law enforcement authorities.

Gammage pleaded guilty to a criminal information charging him with one count of mail fraud. He could receive a maximum sentence of 20 years in prison and a fine of up to $250,000. In determining the actual sentence, the court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders.

Sentencing is scheduled for May 2013, before United States District Judge Robert L. Vining.

This case is being investigated by special agents of the Federal Bureau of Investigation and the Georgia Bureau of Investigation.

Assistant United States Attorney Russell Phillips is prosecuting the case.