Lebanon Attorney Faces Federal Probe After $300,000 Escrow Misappropriation

WEST LEBANON – A Lebanon attorney is under federal investigation amid suspensions from practicing law in New Hampshire and Vermont after allegedly misappropriating nearly $300,000 of escrowed funds.

“The Law Office of Stephen Girdwood has ceased operations,” reads the sign posted to the locked door of Girdwood’s fourth-floor office across the street from Colburn Park.

In July, the Vermont Supreme Court placed Girdwood, licensed in both Vermont and New Hampshire, on immediate interim suspension following allegations of financial misappropriation that led to his suspensions in both New Hampshire State and Federal courts earlier this year.

According to court records, Girdwood offered no objections to the basis of Vermont’s reciprocal discipline.

In January, the New Hampshire Attorney Discipline Office filed a petition for the immediate suspension of Girdwood from the practice of law, alleging multiple violations of the New Hampshire Rules of Professional Conduct and the New Hampshire Supreme Court.

The alleged violations include misappropriating funds Girdwood was holding in escrow, knowingly failing to disclose to opposing counsel his use of escrowed funds, and criminal acts of theft and misapplication of property.

According to the ADO’s petition, Girdwood misappropriated “at least $292,507.06 of escrowed funds.”

Having reviewed the allegations in the ADO’s petition, the New Hampshire Supreme Court found that “Attorney Girdwood’s immediate suspension from the practice of law is necessary to protect and to preserve the integrity of the legal profession,” the court’s January order states.

Around the same time, the Lebanon Police Department was conducting an active investigation into Girdwood, Chief Phillip Roberts previously told the Valley News.

“This case was referred to and taken by the FBI for federal investigation and potential prosecution,” Roberts recently stated in an email.

In the wake of Girdwood’s suspension in New Hampshire, the New Hampshire Supreme Court appointed Andrea Labonte, assistant general counsel with the ADO, to take possession of client files and other fiduciary accounts.

Labonte was not available for comment on Monday.

Two months following the New Hampshire Supreme Court order, the U.S. District Court of New Hampshire took the course of reciprocal discipline, ordering him to show cause, if any, as to why federal suspension would be unwarranted.

“I do not intend to object to the imposition of reciprocal discipline as outlined in the order of the New Hampshire Supreme Court,” Girdwood wrote in response to the court on March 16.

Chief Judge Samantha Elliot ordered the suspension of Girdwood from practicing law before the United States District Court of New Hampshire in April of this year.

That same month, just a short walk southeast around the park from Girdwood’s now-closed office, the new First Baptist Church of Lebanon received its certificate of occupancy around ten years after an arsonist burned down the old Gothic Revival structure built in 1870.

Girdwood previously served as chair of the church’s board of trustees and helped supervise rebuilding efforts, which were plagued by the COVID-19 pandemic and fundraising challenges.

Girdwood no longer serves in the church’s leadership, current Board of Trustees Chair Bob Souza told the Valley News on Monday.

Grafton Superior Court records also show a pending breach of contract case opened in February in which Mascoma Bank alleges Girdwood failed to pay back over $25,000 of a business loan. Girdwood filed an answer in April to the bank’s complaint, admitting the breach of the agreement.

Phone and email efforts to reach Girdwood were not immediately successful.