FOLLOW US

DENVER — Messner Reeves LLP, a self-described “premier business law firm” with eleven offices across the United States, is at the center of a widening dispute over $8.345 million in client escrow deposits that vanished from the firm’s Colorado Lawyer Trust Account Foundation (COLTAF) account in the spring and summer of 2023.

Bank statements that have been publicly filed in federal litigation show that the funds — wired into the firm’s Northern Trust trust account ending 8494 by five small businesses between April and June 2023 — were nearly entirely depleted within weeks of arrival. Yet Messner Reeves continues to maintain on its public website that “at no time have the funds at issue in the lawsuit disappeared or become lost.”

The dispute has been the subject of prior reporting by Bloomberg Law and Law360, and has spawned litigation in at least California and Utah federal courts.

The Deposits, and the Empty Account

Five plaintiff entities — Emerald Consulting Partners LLC, Kosher Eats LLC, Abbson LLC, MSC Companies LLC, and HomePeople Corporation — wired a combined $8,345,000 into Messner Reeves’ COLTAF account between April 27, 2023 and June 29, 2023 as escrow deposits in connection with so-called “Business Expansion Line of Credit” (BELOC) agreements involving INBE Capital LLC.

Northern Trust account statements that have been publicly filed as exhibits in federal litigation show the account’s daily ledger balance climbed as high as $4.2 million on June 29, 2023 — and then collapsed. By August 31, 2023, the daily ledger balance stood at just $15,405.74.

The wires out of account 8494 during that period did not go to INBE Capital. Instead, the publicly filed bank records show large transfers to entities and individuals with no apparent connection to the plaintiffs’ loan applications, including Sahara Las Vegas Corp. (more than $1.8 million in three transfers), Valley Bank of Nevada ($904,777 to settle Nevada engineering liens), Dribble Dunk LLC (a Las Vegas arena project), California car dealerships AutoNation Chrysler Dodge ($80,242) and Hoehn JLR Inc. ($414,705), and large personal-account wires to two individuals named Daniel Chartraw and Todd A. Owen.

Two Sworn Statements That Don’t Match The Bank Records

In a February 2025 affidavit filed in the United States District Court for the District of Utah (Case No. 2:24-cv-00520, ECF No. 206-2), Messner Reeves president James W. Smith swore under oath that “there were no funds remaining in the account held for INBE by July 25, 2024.”

That date is more than eleven months after the publicly filed Northern Trust statements show the account had already been emptied. The same affidavit asserts that “with the exception of Torben Welch, none of the named partners or employed attorneys at Messner Reeves, LLP had any knowledge or involvement in any of the deposits any borrowers with INBE made or any disbursements from the INBE funds.” Smith’s affidavit also acknowledges receipt of $10,070,000 across the relevant period.

The bank records and Smith’s sworn statement cannot both be accurate.

The Federally Indicted Wire-Fraud Felon Receiving Trust-Account Funds

Among the largest individual recipients of wires out of the Messner Reeves trust account in 2023, according to the publicly filed bank statements, is Daniel Chartraw — a name that returns immediate red flags on any basic public-records search.

In 2012, a federal grand jury in the Eastern District of California returned an 18-count wire fraud indictment against Chartraw (Case No. 2:12-cr-00184), charging him with operating a string of advance-fee schemes between 2007 and 2011, including the so-called “Darwin Mine Fraud,” an “Oil Broker Fraud,” a “Dairy Financing Fraud,” a “Gold Refinery Financing Fraud,” and a “Trading Platform” fraud involving a phony offshore institution called “Cascabel Bank.” The indictment alleged Chartraw obtained approximately $2.4 million from victims and used the funds for personal expenses. He was ultimately sentenced to 57 months in federal prison.

On November 21, 2024, a federal grand jury in the same district returned a new 12-count wire fraud indictment against Chartraw (Case No. 2:24-cr-00311), charging him with operating a cryptocurrency-themed advance-fee scheme through entities he controlled named TDA Global and Crypto-Pal, LLC. According to the indictment, Chartraw stole at least $400,000 from investor-victims and converted it to his own personal use through cash withdrawals, debit card purchases, and transfers to family-member accounts, spending the proceeds on “travel, dining, and other personal expenses.”

Chartraw is currently out on bail awaiting trial in that case.

“Titan Financial, LLC” — A Wyoming Shell Registered Under a Messner Reeves Email

Public records on file with the Wyoming Secretary of State raise further questions. Articles of Organization filed on November 7, 2023 show the formation of a limited liability company called Titan Financial, LLC, registered to a Wyoming mail drop at 30 North Gould Street, Suite N, Sheridan, Wyoming.

The organizer of Titan Financial, LLC is identified as Donna DeFalco, signing as “Authorized Signer.” Her contact email on the public filing is [email protected] — a Messner Reeves law firm email address. Her contact phone is (801) 683-2022, a Salt Lake City–area number.

The November 7, 2023 incorporation date is significant: it is more than three months after the publicly filed bank statements show the $8.345 million in plaintiff deposits had already been transferred out of the Messner Reeves trust account.

Messner Reeves’ Public Statement — Still Live On The Firm’s Website

On February 22, 2024, Messner Reeves published a statement on its corporate website at messner.com responding to the Emerald Consulting Partners litigation. The statement remains live at the time of this writing. It reads, in part:

“Messner Reeves LLP deeply values its reputation for excellence and, therefore, issues this statement in response to the Emerald Consulting Partners LLC lawsuit. At no time have the funds at issue in the lawsuit disappeared or become lost. The legal requirements regarding the return of the funds have not been satisfied, and the firm is legally prohibited from releasing the money at issue. The Plaintiff is aware of these circumstances, yet has falsely alleged otherwise.”

The statement does not address the discrepancy between the firm’s position and the publicly filed Northern Trust account statements, nor does it explain on what legal basis the firm contends it is “legally prohibited” from returning client escrow funds.

The Bloomberg and Law360 Coverage

The disappearance of client deposits from Messner Reeves’ trust account was previously covered by Bloomberg Law in an article examining how multiple small businesses found themselves unable to recover money wired to the firm under BELOC-style advance-fee arrangements. Law360 has also reported on the dispute.

The plaintiffs’ claims now span multiple federal court dockets, including the Utah federal action in which Smith’s contested February 2025 affidavit was filed.

Open Questions

Several questions about the matter remain unanswered on the public record:

• Why does Smith’s sworn February 2025 affidavit place the depletion of the trust account nearly a year after the publicly filed Northern Trust statements show it actually occurred?
• On what authority did Messner Reeves transfer client escrow deposits to Sahara Las Vegas Corp., Valley Bank of Nevada, and California car dealerships?
• What is the relationship, if any, between Messner Reeves and Daniel Chartraw — the federally indicted wire-fraud defendant whose personal accounts received six-figure wires from the firm’s trust account in 2023?
• Why did a Messner Reeves employee, using a Messner Reeves email address, organize a Wyoming LLC called Titan Financial, LLC in November 2023 — months after the trust-account deposits had already been disbursed?
• Has Messner Reeves submitted a claim to its professional liability or fidelity insurance carrier in connection with the loss of the $8.345 million?

Messner Reeves LLP did not respond to a request for comment prior to publication.

This article is based on the federal indictments in United States v. Chartraw (Case Nos. 2:12-cr-00184 and 2:24-cr-00311, E.D. Cal.); the February 2025 sworn affidavit of James W. Smith filed in the United States District Court for the District of Utah (Case No. 2:24-cv-00520, ECF No. 206-2); publicly filed Northern Trust Company account statements for COLTAF account ending 8494; the November 7, 2023 Articles of Organization for Titan Financial, LLC on file with the Wyoming Secretary of State; the public statement published on the Messner Reeves LLP website on February 22, 2024; and prior reporting by Bloomberg Law and Law360. All allegations described as such remain allegations unless and until adjudicated.