7 On Your Side: Lawyer who delayed settlement faces grand larceny charges

MINEOLA (WABC) -- A lawyer accused of withholding settlements from his clients has surrendered to authorities in Nassau County, and the suspect is not new Eyewitness News.

Last week, 7 On Your Side told you about 59-year-old Steven Morelli after one of his clients claimed he pocketed her settlement money. Now, he is charged in connection with four grand larcenies that occurred in Garden City beginning February 2015 through August 2015.

According to detectives, Morelli, who lives on the Upper East Side and runs the Law Office of Steven Morelli PC, retained and misused settlement checks in the amount of $198,000 that had been awarded to his clients from lawsuits.

It is alleged that he retained the monies for an unreasonable amount of time and used the settlement funds for other than its intended purpose.

"Mr. Morelli's scheme was that he would receive settlement in regards to these lawsuits," Nassau police Sergeant Richard Harrison said. "The money would be placed into his account at the law firm. Mr. Morelli almost automatically withdrew that money and spent it on personal items."

At this time, three of the victims have received the money owed to them, while the fourth is still owed in excess of $40,000.

Detectives ask anyone who believes he or she may have been victimized by Morelli to contact the Crimes Against Property Squad at 516-573-5275.

After his arraignment, Morelli let his lawyer do the talking for him.

"This is a guy who has fought for his clients for years," attorney Marc Gann said. "And organization may not have been his strong suit."

The young woman we profiled, who told her story in silhouette because of a confidentiality agreement, claimed she felt victimized twice, first by her boss and then by Morelli.

"I put my trust in him," she said. "I put a lot of trust in him. He knew everything that happened to me, and now he does this to me."

Morelli pleaded her case and got a settlement in which her boss and former employer denied any wrongdoing. But more than a year later, she's still looking for her cut of more than $50,000.

The teacher had quizzed Morelli, wondering where her money was. And his answer was surprising.

"He doesn't know what happened to it," she said. "He's going to look into it, he's getting checks late from the defendant, it's with the comptroller."

So she did her homework and found a copy of her settlement check, sent to Morelli and even endorsed by him a year ago.

"When I saw the image that he had signed that, he cashed it," she said. "And all this time he was telling me he didn't know where it was. I was very frustrated."

She said that even after presenting the lawyer with the evidence, she still wasn't seeing a dime.

"This was money owed to me, and my lawyer deposited it and cashed it," she said. "And he's supposed to be defending me, and he's telling me he doesn't know where it is."

So we started calling Morelli, and he finally ponied up the cash. But now, it appears he has bigger challenges ahead of him.