Former Saugus attorney faces federal fraud charges
A former Saugus attorney hid almost a million dollars in state lottery winnings from bankruptcy courts and sold the rights to one of two winning tickets for $360,000 after filing for protection from creditors, prosecutors said yesterday.
James S. Gregson, 40, of Andover, was charged in federal court in Boston with two counts of bankruptcy fraud and filing a false tax return. If convicted, he faces up to eight years in prison and $600,000 in fines.
Prosecutors said that three years before filing for bankruptcy in October 2005, Gregson purchased the rights to two $1 million winning state lottery tickets — “Cash Windfall’’ and “Set for Life’’ — from an unnamed source. Each paid $35,000 a year for at least 13 years, according to Assistant US Attorney Mark J. Balthazard. Gregson failed to disclose the lottery tickets or the annuity payments he had received to the bankruptcy court, Balthazard said. In May 2006, his bankruptcy trustee received a tip about the undisclosed assets.
When questioned under oath, Gregson denied purchasing the “Cash Windfall’’ lottery ticket and stated several times that his wife had used his parents’ money to buy it. He then procured an affidavit from a family member to corroborate his false testimony, Balthazard alleged.
Balthazard also said Gregson stated his total taxable income as $0, instead of the more than $450,000 he actually made, in his 2003 federal income tax return.
Gregson was admitted to the Massachusetts bar in 1997 and practiced law in Saugus before he was disbarred in 2008. When Gregson submitted his resignation to the Supreme Judicial Court, he was facing a nine-count petition for discipline. Charges included conversion of $240,000 in his clients’ funds and withdrawal of more than $560,000 in Interest on Lawyer Trust Accounts money — short-term client funds placed in an interest-bearing account that sends collected interest to the account’s state program for charity.
Gregson’s attorney, Robert J. Wheeler Jr., said his client is currently employed but declined to discuss any details. According to Gregson’s bankruptcy petition, he had opened two law firms — James S. Gregson, PC, in 2003 and Legal Collections, LLC, in 2005 — and a transportation company in 2003. Gregson also owned part of Billing Solutions, LLC, a collection agency.
June Wu can be reached at jwu@globe.com. 
