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Lawyer: Feds flubbed forfeited funds

It is the case of the misplaced $2.7 million.

The tale begins in September 2011, when federal prosecutors charged Nicolaos Kantartzis of Bethesda with ringing up millions of fraudulent 50-cent fees by rigging pay phones he owned. On the day he was arrested, Kantartzis agreed to forfeit almost $2.9 million to the government.

In January 2012, Kantartzis was sentenced to three months in prison and ordered to pay a $20,000 fine and approximately $2.7 million in restitution.

In many federal cases, forfeiture (the money that goes to the government) and restitution (the money that goes to victims) are two separate amounts. As part of Kantartzis’ sentencing, however, U.S. District Court Judge Roger W. Titus ruled the $2.7 million in restitution “is deemed satisfied out of the defendant’s forfeited assets,” according court documents.

But this July, federal prosecutors filed a judgment against Kantartzis in Montgomery County Circuit Court, seeking the $2.7 million in restitution. They also put a lien on Kantartzis’ house.

In August, Fani Kantartzis, Nicolas Kantartzis’ lawyer, filed a motion to vacate the judgment and the lien.

“It appears that the foreign judgment recorded with this court … completely disregards all payments made by Mr. Kantartzis,” the motion states.

The case was transferred to U.S. District Court on Friday. In a filing Monday, prosecutors wrote the parties “are engaged in settlement talks,” which may be a euphemism for: Oops.

Fani Kantartzis, a Rockville solo practitioner and a relative of her client, said this week prosecutors have told her the lien was filed in error. They have found the forfeited money but have not applied it toward the restitution, she said.

Fani Kantartzis said the lien has been removed, but the judgment remains.

“If this money has been sitting with the U.S. government since January 2012,” she said, “why is it still sitting there and not gone to the victims?”

A spokeswoman for the U.S. attorney’s office declined to comment on the case.