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updated: 8/29/2013 3:30 PM

Oak Brook attorney faces federal fraud charges

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Daily Herald report

A suburban attorney whose law license was suspended earlier this year was arrested today on federal fraud charges.

Prosecutors said Kathleen Niew, 57, of Burr Ridge, misappropriated more than $2.3 million of her clients' funds over a two-year span.

Niew was arrested by the FBI at her Oak Brook office without incident, authorities said.

Niew is accused of using client funds that were intended for closings on commercial real estate transactions for her own benefit. Prosecutors said Niew used the funds to finance purchases of various mining operations and received finder's fees in exchange for providing the funding. Prosecutors allege Niew lied to clients about the whereabouts of the funds and blamed a banking error for some of the misappropriations.

She is facing a maximum sentence of 20 years in prison if convicted and a $250,000 fine.

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