Source: $20M in clients' cash missing in murder-suicide case

• Story Highlights
• Police say William Parente killed wife, 2 daughters and himself
• Parente may have taken more than $27 million from dozens of clients
• Clients got no investment statements and were not charged a management fee
• A client nervous after Madoff case found there was no money in Parente's account

NEW YORK (CNN) -- More than $20 million from dozens of clients is unaccounted for in the aftermath of what police say was a murder-suicide by the attorney who invested the money, according to a source with direct knowledge of deceased lawyer William Parente's financial dealings.

Some investors fear their entire life savings have been wiped out, said the source, who based the $20 million amount on knowledge of Parente's finances.

Some other investors are missing what could amount to another $7 million, CNN has learned, so the total of missing money tied to Parente could be upwards of $27 million.

Baltimore County, Maryland, police say Parente, 59, killed his family before committing suicide. The bodies of Parente, his wife and their two daughters were found in a hotel room in Towson, Maryland, on Monday.

The source, who asked not to be identified because of the sensitive financial information involved, said one investor had been involved with Parente for more than 15 years, receiving regular monthly payments from Parente until April 16, four days before the bodies were found.

The source said Parente solicited personal loans from clients at high interest, promising to use the money for bridge financing of real estate projects such as shopping centers.

The source did not know whether Parente, of Garden City, New York, had actually used the money for any legitimate investments.

The source, who knew Parente for more than 15 years, described him as "serious, somber and conservative."

Parente told investors he was generating returns of more than 13 percent even in down markets, according to the source.

Investors were not given investment statements and were not charged a management fee, but Parente did provide notices informing investors that he owed them money, according to the source.

In other developments Friday, police said Parente bought a set of knives from a Crate and Barrel store in Towson, and one of the knives is believed to be the one Parente later used to take his own life.

Baltimore County police said that knife is being tested as evidence in the murder/suicide case. Investigators say they found a receipt for the knife in the hotel room where the deaths took place, and the time stamped on the receipt was 5:25 p.m. Sunday.

Police have said Parente's wife, Betty, 58, and daughters Catherine, 11, and Stephanie, 19, were killed by asphyxiation and blunt force trauma Sunday afternoon.

Authorities said Parente took a call about midnight Sunday from his elder daughter's college roommate asking whether she was returning to her dormitory. Police believe Parente's daughter was already dead. He told the roommate his daughter was spending the night at the hotel with the family.

Also Friday, other details emerged about some of Parente's other clients.

One of Parente's investors was Queens lawyer Bruce Montague, and Montague's office has heard from 10 Parente clients whose investments are unaccounted for. Together, those clients had invested about $7 million. Through a law partner, Craig Gardy, Montague said he is missing $450,000.

The clients are from New York, New Jersey, California and Florida, according to Montague's office. The office has referred those clients to the FBI.

Gardy said Montague, who considered Parente to be a personal friend, remains too devastated about the deaths to provide details himself, but he authorized his partners to speak on his behalf.

The scenario as given by his partners was that after the Bernard Madoff scandal broke last fall, Montague got "cold feet" and repeatedly asked Parente for his investment money back.

On April 16, Montague tried to deposit a check from Parente for $245,000. On Tuesday, April 21, when Montague's bank notified him the check did not clear, he called Chase bank, where Parente's funds were held.

Montague was told Parente's account was empty, according to Gardy, and it would be useless to deposit other checks received from Parente.

Then Montague called the New York attorney general's office.

He called the attorney general's office again after he learned about Parente's murder/suicide.

Gardy said Montague believed he was investing in real estate notes -- short-term, high-interest loans made to developers, for example, who wanted to circumvent conventional bank loans.

Montague did not receive monthly or quarterly statements. Gardy said Montague believed he was making money on interest from those loans and would sometimes get a check when the note was paid off.

The FBI is continuing its investigation. Spokesman James Margolin said a number of banks are being contacted. He would not identify them.

Funerals for Parente's wife and daughters are scheduled for Tuesday at St. Joseph's Catholic Church in Garden City, New York. The funeral home handling arrangements said a separate, private service will be held for William Parente.