Lawyer Suspended for Accepting Nude Dances
Panel: Client Performed for Him in Return for Reduced Legal Fees

Associated Press
September 19, 2008

CHICAGO - An attorney has been suspended for more than a year for accepting nude dances from a stripper as partial payment for the legal fees she owed him.

The Illinois Attorney Registration and Disciplinary Commission on Thursday said Scott Robert Erwin will begin serving a 15-month suspension for misconduct next month.

Erwin, who practices in the northern Illinois city of DeKalb, and his client mutually agreed that she'd perform nude dances for him in his office as a way to reduce her legal fees, the commission's report said. He credited her for $534 toward his bill for services of various legal matters, the report said.

While she agreed to the performances, the client contended he touched her inappropriately during those dances, and she went to police in 2002 with sexual assault allegations.

Erwin denied any inappropriate touching happened, and he was never charged criminally, the report said. He declined to comment on the panel's decision Thursday. The woman no longer works as a stripper, the report said.

Lawyer Who Stole $300,000 for Nestegg Going to Prison

New York Lawyer
September 5, 2008

PORTLAND, Maine (AP) - There was no extortion. No lavish vacations. No gambling debts. No drug addiction. Instead, a former partner in a major Maine law firm stole more than $300,000 simply because he felt he needed greater savings, his lawyer said.

Addressing a federal judge, disgraced lawyer John Duncan said he never would have envisioned himself in trouble with the law when he graduated 30 years ago from law school.

"I have gone far astray from the ideas and ideals I had," Duncan said in his first public comments since the case shook Portland's legal community.

Judge George Singal, who sentenced Duncan to 28 months in prison for tax evasion, told Duncan he broke an important public trust when he stole $300,000 from his clients and law firm Verrill Dana.

"People wonder who they can believe in," Singal said. "That's the real damage here. People's ability to trust has been harmed across the board. It pains me that someone as well-educated as you are, an individual who the community should look up to has fallen so far."

Duncan joined Verrill Dana in 1978 after graduating from Bowdoin College and receiving a law degree from the University of Virginia.

During the years of theft and embezzlement, Duncan was earning an average of $269,000 a year and his family had assets of more than $1 million.

He clearly did not need the extra money to survive, said defense lawyer Toby Dilworth. Instead, he had a compulsion to provide his family more financial security.

"His conduct was completely irrational," Dilworth said. "He felt this desire to have more savings, just so it would be there."

Duncan, 54, of Falmouth, was permanently disbarred in July by the state Supreme Court. That was believed to be the toughest penalty ever against a Maine lawyer.

Duncan has also pleaded guilty to felony theft charges in Cumberland County Superior Court. Sentencing on those charges is set for Sept. 18.

From his savings and with help from family members, Duncan has paid back the money owed to Verrill Dana and the Internal Revenue Service.

NY Lawyer Accused of Stealing More Than $5 Million

By Vesselin Mitev
New York Law Journal
New York Lawyer
September 4, 2008

A disbarred real estate attorney yesterday pleaded not guilty to 26 counts of wire and mail fraud in Central Islip federal court.

Stuart Moshell, a Jericho solo practitioner, is charged with stealing more than $5 million from clients and business associates, according to Eastern District U.S. Attorney Benton J. Campbell.

Between 1998 and 2007, Mr. Moshell allegedly induced several clients and business associates to loan money by falsely informing them he had a client who needed a "bridge loan" to complete a real estate deal. Mr. Moshell allegedly promised lucrative returns on the investments but in reality used the money to pay personal debts.

Mr. Moshell is also charged with defrauding client escrow accounts and perpetuating mortgage fraud.

In March, he tendered his resignation as an attorney to the Appellate Division, Second Department, Matter of Moshell, 51 Ad3d 122.

At the time, he was under investigation by the grievance committee for the Ninth Judicial District for borrowing from escrow accounts to pay mounting debts, said his attorney, James O. Druker of Kase & Druker in Garden City. Mr. Moshell is "fully cooperating with the authorities in terms of victim restitution," Mr. Druker said.

Mr. Moshell was arraigned before Eastern District Judge Joanna Seybert.

Charges Stand Against NY Lawyer in Benefits Fraud Case

By Anthony Lin
New York Law Journal
New York Lawyer
September 4, 2008

A federal judge has upheld novel employee-benefits fraud charges against a lawyer, calling his argument for dismissal "provocative" but "fatally flawed."

Prosecutors from the Eastern District U.S. Attorney's Office obtained the indictment of Steven Coren of Coren & Associates last year on charges that he helped clients divert for their own use money supposedly set aside for employee benefits.

The case stemmed from Mr. Coren's representation of contractors on public housing and infrastructure projects. Such contractors are required under the federal Davis-Bacon Act, as well as a similar state law, to pay laborers a "prevailing wage" of base pay and fringe benefits set by the U.S. Department of Labor.

Mr. Coren set up and administered a trust into which his contractor-clients paid their employee benefit contributions. The government contends the lawyer used his position as trustee to help clients pocket more than $1 million they certified was being used for employee benefits. Mr. Coren faces a maximum of 20 years in prison.

In arguing for dismissal of the charges, Mr. Coren claimed the trust such as the one at issue is governed by the Employee Retirement Income Security Act (ERISA) and that the Davis-Bacon Act cannot dictate how funds in an ERISA-qualified account can be distributed.

Mr. Coren also argued that criminal charges should be dismissed because the Davis-Bacon Act and its state counterpart are insufficiently clear that there need be a relationship between funds contributed to and distributed from a trust account set up for employee benefits.

Eastern District Judge Eric N. Vitaliano noted in his decision in eld, 07 cr. 265, that, to his knowledge, the case was the first criminal prosecution based on a violation of the Davis-Bacon Act, but he said there was an "abundance of authority which patently establishes that the conduct alleged in this inaugural charge is prohibited."

The judge noted that the purpose of such statutes has been to protect workers on government projects by fixing a floor under wages. Permitting an employer to claim credit for contributions not intended for workers' benefit would render the statute ineffective, Judge Vitaliano said.

"Taken together, the plain meaning of the language of the statute, its legislative history, regulatory clarifications and related interpretive case law gave more than fair warning that conduct such as charged here is criminal - prevailing wage credit cannot be claimed where it is intended beforehand that the workers on whose behalf the credit is taken will be ineligible to share the benefit," the judge wrote.

Judge Vitaliano called Mr. Coren's argument that Davis-Bacon conflicted with ERISA provocative but rejected it on the grounds that the prevailing wage statute did not require that employee benefits be funneled through an ERISA-qualified account.

"The laws simply require that they be paid," he said. "They could, of course, always have been paid in cash. Therefore, whatever an employer's obligations are under Davis-Bacon, they are not discharged solely because dollars claimed to satisfy payment of a prevailing supplement wage obligation are in fact contributed to an ERISA-qualified fund, plan or program; nor is the government precluded from examining who the actual beneficiaries of the [fund] were in order to determine compliance with prevailing wage laws."

Mr. Coren was represented by Marc Mukasey of Bracewell & Giuliani, who did not return a call seeking comment.

The prosecution is being led by Assistant U.S. Attorney Richard Faughnan.

Lawyer Caught Up in Internet Scam
 Faces $200,000 Suit From Bank

By R. Robin McDonald
Daily Report
New York Lawyer
August 26, 2008

ATLANTA - Securities lawyer Gregory Bartko said he is the victim of an Internet fraud scheme that is apparently targeting law firms throughout the country and the banks where lawyers have their escrow accounts.

As a result, Bartko is now a defendant in a federal suit by Wachovia Bank—which is seeking reimbursement for nearly $200,000 that the bank wired, on Bartko's instructions, to a Korean bank on behalf of a company that had hired Bartko via the Internet.

Wachovia has also notified the State Bar of Georgia that Bartko's firm escrow account was overdrawn by more than $190,000, Bartko said.

The scheme that entangled Bartko matches one in a fraud alert issued in February by SunTrust Bank in Atlanta.

An overseas company contacts a U.S. lawyer by e-mail and retains that attorney as a settlement agent to collect a debt from a U.S. company. The U.S. company sends a settlement check to the lawyer, who deposits it into his trust account and then wires the settlement amount, minus his fee, to the "client." But the settlement check is counterfeit, and the lawyer loses the money he wired abroad.

"I'm pretty upset about it," Bartko said last week. "I got conned by someone who I thought was a client."

Bartko is not the first to have been taken in by the scam. The July issue of the California Bar Journal reported on two unnamed California attorneys, one in Long Beach and one in San Francisco, who fell for a similar Internet pitch, but their banks noticed the counterfeit checks before any money was sent abroad.

Wells Fargo Bank in San Francisco and City National Bank in Los Angeles have reported at least six other lawyers who were drawn in, according to the California Bar Journal.

Bartko said that a member of Wachovia's loss-management/rapid-deployment team in Atlanta told him that she was already working on a virtually identical complaint involving another metro-Atlanta attorney who had been instructed to wire funds—based on a phony check—to an Internet client in the Philippines by the same individual who had hired Bartko.

Bartko said he was taken in by the fraud scheme because he occasionally handles international legal transactions involving clients in Asia. It is not unusual for such transactions to be conducted by e-mail, he said, because of the 12- or 13-hour time difference between Atlanta and the Far East, he added.

Bartko said fraudsters first contacted him in early February via an e-mail from the Tah Tong Textile Co. in Taiwan seeking representation in the U.S. to collect a large debt.

Bartko said the e-mail mentioned five different firms in Atlanta that Tah Tong claimed to have also contacted. Tah Tong's representative informed him that the company had identified the Atlanta law firms, including Bartko's solo practice, through the State Bar directory, Bartko said.

"I think I let my guard down when I heard that," Bartko explained. "We entered into an attorney-client agreement with them" on March 12 and, eventually, contacted the alleged debtor.

Bartko said that in April he received a SunTrust cashier's check—payable to his law firm—from that debtor for $197,530 as partial repayment of its outstanding account. Then, Bartko said, Tah Tong executive Hua Cheng instructed Bartko via e-mail to wire the money to the textile company's account at the Woori Bank in South Korea.

Bartko said Tah Tong is a real public company that trades on the Taiwanese stock exchange. "When they approached us to do some work for them, we checked them out," he said. "It's a reputable company. … But I suspect there is no connection between Tah Tong and the people who are involved in the scam."

As for Hua Cheng, Bartko said, "Since he was the one who instructed us what to do, I can only assume he was part of the scam."

Bartko said he deposited the cashier's check in his escrow account at Wachovia on April 8. A bank representative told him that he could not draw on the funds until April 10 — the time it would take to confirm that funds were available and that SunTrust would honor the check, the lawyer said.

On April 11, shortly after 10 a.m., Bartko returned to Wachovia and arranged to wire $192,530 to the Woori Bank. Three days later, on April 14, Bartko said he discovered that his escrow account reflected a debit of $197,530.

When he called Wachovia for an explanation, bank representatives told him that SunTrust had returned the cashier's check that Bartko had deposited as counterfeit. A bank representative told him that Wachovia had attempted to recall the wire the day Bartko had arranged it, but had been unsuccessful.

While the cashier's check was counterfeit, Bartko said that SunTrust had determined that the customer in whose name it was purchased is a real one. "They are not part of the [fraudulent] transaction," Bartko said.

On April 15, Wachovia informed Bartko that he would be responsible for the $197,530 chargeback. Bartko said he learned that day that the bank's loss-management team was already working a similar fraud involving Hua Cheng, the same Tah Tong representative who had contacted Bartko.

"That disturbed me," he said, noting that he thought the bank should have been on the lookout for other counterfeit checks by the same fraudsters.

The bank sues

Wachovia's suit against Bartko—originally filed in Gwinnett County State Court and transferred to U.S. District Court on Aug. 18—claimed that the bank had provided Bartko with "provisional credit" when it wired the funds to South Korea. The bank laid claim to more than $7,000 already in Bartko's escrow account, closed it and billed the $191,619.95 negative balance to Bartko.

Wachovia has also claimed that the account was a personal—rather than a business—account, making Bartko potentially personally liable for the loss.

Richard B. Herzog Jr. with Nelson Mullins Riley & Scarborough in Atlanta is handling the suit for Wachovia. On Monday, Herzog said because the matter is currently in litigation, "I don't think I'm authorized to speak on behalf of my client." Wachovia spokeswoman Evelyn Mitchell said that it is Wachovia's policy not to discuss pending litigation.

Bartko acknowledged that he has not paid the bank for the bulk of the wired funds. But he said that what appears to have been a delayed communication between SunTrust and Wachovia caused Wachovia to authorize the outgoing money wire.

Bartko said that SunTrust identified the cashier's check as counterfeit on April 9, the day after he deposited it.

According to federal law, SunTrust had three days in which to notify Wachovia electronically that the deposited check was counterfeit. But SunTrust, according to Bartko, missed the three-day notification deadline.

Bartko didn't wire the money to Tah Tong until April 11. "So what's going on between the ninth and the 11th?"—the time when SunTrust identified the counterfeit check and Wachovia attempted to recall the bank wire, the lawyer asked.

Bartko suggested that the communication gap could have occurred because the counterfeit check was misplaced. He noted that a copy of the check that was delivered to Wachovia on April 16 stated that SunTrust was providing Wachovia with a photocopy "in lieu of the original item lost in the process of being returned."

Bartko said Wachovia's legal counsel notified him about SunTrust's missed midnight deadline, adding that Wachovia intended to file a claim of late return against SunTrust for the $197,530 loss.

But in June, Wachovia's counsel contacted Bartko a second time, notifying him that the late return claim against SunTrust had failed and that Bartko's "obligation to repay the overdraft remains."

A SunTrust representative could not be reached to discuss the case.

Bartko said that since April, his efforts to get additional information about the counterfeit check have failed. SunTrust's associate counsel advised him that any requests for information about the check would have to come from Wachovia or via a subpoena and that "any recourse you may have is between you and Wachovia."

Said Bartko: "I can't get anything from Wachovia. They won't give me the first piece of paper."

The case is Wachovia Bank v. Bartko, No. 1:08-cv-2636.

NY Firm Sees Fees Bid Slashed in Fight Over Rejected Will

By Mark Fass
New York Law Journal
New York Lawyer
August 21, 2008

NEW YORK - Two days before 83-year-old Faye Mancuso died in January 2000, she signed a new will disinheriting her family and naming a man she hardly knew as the sole beneficiary of her $1.68 million estate.

Ms. Mancuso's friend, Mary Pizzi, had suggested that her son, Michael Pizzi, could assist Ms. Mancuso in her efforts to relocate to a nursing home.

Instead Mr. Pizzi, a private investigator and former marshal in the Eastern and Southern districts of New York, facilitated the drafting of the new will, which left him everything. In court papers, Mr. Pizzi claimed his relationship with Ms. Mancuso dated from his early childhood when he says she was named his godmother.

Now, two years after a jury threw out the will on the basis of Mr. Pizzi's undue influence, Brooklyn Surrogate Margarita López Torres has refused his request for the $32,283 he claims he earned as preliminary executor to her estate.

Surrogate López Torres also rejected the application for $136,618 filed by the Bay Ridge law firm Connors & Sullivan, which represented Mr. Pizzi, awarding it a flat sum of $10,000 instead.

The judge concluded that justice precluded either Mr. Pizzi or Connors & Sullivan from benefiting from their own wrongdoing.

"Where a fiduciary has sought to probate a will procured by undue influence, not only is the fiduciary not entitled to commissions but 'allowing the proponent of the will to recover his attorney's fees from the assets of the estate would be a perversion of justice because it would allow the proponent of the will to profit by his own wrong,'" Surrogate López Torres wrote in

Imprisoned Pol Surrenders His Law License for Five Years

By Julie Kay
The National Law Journal
New York Lawyer
July 31, 2008

MIAMI — Former Broward County, Fla., Sheriff Ken Jenne, in prison for public corruption, agreed to surrender his law license for five years.

Jenne's attorney, David Bogenschutz of Fort Lauderdale, Fla.'s Bogenschutz & Dutko, said that Jenne agreed to the suspension as a compromise. The Florida Bar had sought permanent disbarment.

Palm Beach, Fla., acting Circuit Judge Paul Moyle — the referee in the case — signed off on the agreement on Friday. Now the Florida Supreme Court must approve it.

Jenne, 61, was sheriff for nearly a decade and a former Democratic state senator. A lawyer by training, he was one of the most powerful figures in the state when he was indicted by a federal grand jury for allegedly accepting more than $150,000 in improper payments from Sheriff's Office contractors.

Jenne pleaded guilty last September to one count of mail-fraud conspiracy and three counts of income tax evasion. He is serving a one-year sentence at a Virginia penitentiary and is scheduled for release in September.

Prominent Lawyer Is a "Sexual Predator"
and a Cheat, Fired Staffer Claims

By Brenda Sapino Jeffreys
Texas Lawyer
New York Lawyer
July 30, 2008

A former paralegal at Houston lawyer Richard Laminack's current and former firms alleges the prominent plaintiffs lawyer is a "sexual predator" who once offered her $15,000 to stay with him in a hotel room in Las Vegas over a weekend and once suggested she perform a sexual act on an expert witness to improve his mood and testimony.

Defendants in the suit Angela Robinson filed in state district court in Houston on July 25 are Laminack; his current firm, Laminack, Pirtle & Martines; and the O'Quinn Law Firm, formerly known as O'Quinn, Laminack & Pirtle in which Laminack was partner.

Robinson, a Magnolia, Texas, woman who worked on fen-phen litigation while employed at the firms, alleges the defendants engaged in mail fraud under 18 U.S.C. §1962 for mailing settlement statements to fen-phen clients that contained overcharges for medical records. Robinson alleges "firm employees would order fictitious medical records" for clients from health care providers that had never treated those clients, and then the firms added $100 to $150 to the expenses deducted from the clients' portion of their fen-phen settlements for those "fictitious medical records."

Robinson alleges she told Laminack of the "unlawful scheme to defraud thousands of fen-phen litigation clients" but he "told her to be quiet and not inform anyone of this" and he directed the firms to mail the settlement statements containing the charges.

She alleges she was wrongfully terminated under the Texas Supreme Court's 1985 opinion in Sabine Pilot Services v. Hauck for failing to commit an illegal act. Robinson also brings battery and intentional infliction of emotional distress causes of action alleging she was subject to a hostile work environment. She seeks unspecified actual and punitive damages.

"No cause of action under or alleging Title VI of the Civil Rights Act of 1964, 42 U.S.C. §2000e, or Chapter 21 of the Texas Labor Code is being asserted at this time against any defendant," she writes.

Robinson, who alleges she worked under Laminack's supervision at O'Quinn Laminack and at Laminack Pirtle from May 2002 until her "wrongful termination" on April 14, 2008, seeks unpaid overtime wages under the Fair Labor Standards Act totaling $27,500, plus an equal amount in penalties, plus attorney fees and costs.

Laminack, managing partner of Laminack Pirtle, could not immediately be reached for comment.

But Houston lawyer Dale Jefferson, a partner with Martin, Disiere, Jefferson & Wisdom, who represents the O'Quinn Law Firm, says the mail fraud allegation is "completely false." As to the allegations of a hostile work environment at O'Quinn Laminack when Laminack was working there, Jefferson says Robinson never made a complaint under the firm's sexual harassment policy. In 2006, Laminack and Thomas Pirtle left O'Quinn Laminack to form Laminack Pirtle.

"When all the facts come to light, I sure hope the actual facts are reported with the same intensity as the alleged facts contained in the petition," Jefferson says.

Robinson's attorneys, of counsel Spencer Markle and partner Andrew McKinney IV of Houston's McKinney & Cooper, could not immediately be reached for comment.

NY Firm Ruled Liable for Florida Firm's Foulup

By Joel Stashenko
New York Law Journal
New York Lawyer
July 18, 2008

ALBANY - A New York law firm can be held liable for the failure of a Florida firm it retained to file a client's claim to more than $1.2 million from a Florida estate, an appeals court decided yesterday.

Client Alice Whalen was not aware that her Albany firm, DeGraff, Foy, Conway, Holt-Harris & Mealey, was going to arrange for the Florida firm to file the claim when the estate of Julius Gerzof opened in Florida in 1996, and she relied "completely" on DeGraff Foy to stake her claim to the money, the Appellate Division, Third Department, ruled.

But the Florida firm, Bailey, Hunt, Jones and Busto, and its attorney Scott Cagan, from whom DeGraff Foy sought assistance, failed to file the claim, according to the court.

"Under these circumstances, defendant assumed responsibility to plaintiff for the filing of the Florida estate claim and Bailey became defendant's subagent," Justice Leslie E. Stein wrote for a unanimous court in Whalen v. DeGraff, Foy, Conway, Holt-Harris & Mealey, 504271. "Therefore, defendant had a duty to supervise Bailey's actions."

"Therefore, defendant had a duty to supervise Bailey's actions."

Ms. Whalen had secured a judgment of just over $1.2 million in New York courts against Mr. Gerzof for her share of a disputed partnership called Pearcove Associates. The partnership's sole asset was an apartment building in Nassau County.

In January 1995, before the judgment was satisfied, Mr. Gerzof died. Four months later, DeGraff Foy approached Mr. Cagan and asked him to track the Gerzof estate in Florida and also to advise the New York firm on how long it would take to file a claim and how to do so once the estate opened.

In summer 1995, DeGraff Foy informed Ms. Whalen that the Bailey firm had been retained "to follow the Gerzof estate and file any claims . . . required with respect to [her] judgment against Julius Gerzof." The court noted that Ms. Whalen had no contact with the Florida firm directly and did not enter into a retainer agreement with it.

Informed in early 1996 that the estate had opened, DeGraff Foy instructed the Bailey firm and Mr. Cagan to file the claim and sent the Florida firm the necessary information to do so, according to yesterday's ruling. Parties get 90 days in Florida after estates open to file claims.

At the same time, DeGraff Foy also was negotiating with lawyers for the Gerzof estate over a settlement of the judgment Ms. Whalen had secured against Mr. Gerzof. Those talks abruptly ended in early 1998, when the Gerzof attorneys informed DeGraff Foy that the notice of claim had never been filed and that the estate lawyers were ending the negotiations.

"Ultimately, plaintiff was unable to satisfy any of her judgment from the substantial assets of the estate," the Third Department noted.

DeGraff Foy, which is now known as DeGraff, Foy & Kunz, argued that its duty to Ms. Whalen was completely satisfied once it retained the Florida firm to track the Gerzof estate.

The Third Department panel, however, said the firm's obligation to its client included the duty to supervise the Florida firm in the filing of the claim, something it found the Albany firm failed to do.

"It is undisputed that defendant knew of the deadline for filing the notice of claim and took no steps whatsoever to even inquire as to the status of that filing between February 1996 and January 1998," Justice Stein wrote.

Justices Thomas E. Mercure, Edward O. Spain, E. Michael Kavanagh and Robert S. Rose concurred.

The ruling granted Ms. Whalen's motion for summary judgment for her claim that DeGraff Foy was negligent for failing to supervise the Bailey firm.

Bailey Hunt later changed its name to the Bandsawe Residual Corp., which filed for bankruptcy in the late 1990s. There is no phone number for the company in the Miami area.

Ms. Whalen's attorney, Cornelius D. Murray of O'Connell & Aronowitz in Albany, said yesterday's ruling sends the matter back to state Supreme Court for a determination of the extent of DeGraff Foy's liability.

"Something fell between the cracks," Mr. Murray said in an interview. "A claim should have been filed against the estate in Florida and neither the Florida firm that DeGraff retained, nor did DeGraff itself, see to it that it was actually filed. If they are going to delegate this task to somebody else, particularly when they didn't tell the client, then they have the obligation to see that the job is done."

Mr. Murray, echoing a footnote in the court ruling, said the filing of the claim against Mr. Gerzof's estate was a simple clerical task that could have been done by a nonattorney, not a complex task complicated by laws in other states.

Kenneth G. Varley of Donohue, Sabo, Varley & Huttner in Albany represented DeGraff Foy. Neither Mr. Varley nor David F. Kunz, managing partner of DeGraff, Foy & Kunz, returned calls seeking comment yesterday.

Flip-Flopping Disbarred Lawyer Pleads Guilty
Headed to Prison

By Vesselin Mitev
New York Law Journal
New York Lawyer
July 15, 2008

A disbarred Hewlett attorney pleaded guilty yesterday in Nassau County Court to stealing more than $400,000 from clients.

Joseph C. Levine had a plea deal revoked in February after one of his victims implored County Court Judge John Kase to "not allow Mr. Levine to con you the way he conned me" and give him a longer sentence than one-to-three years behind bars.

Judge Kase offered Mr. Levine the option of either taking a new deal of three to nine years or withdrawing his guilty plea and going to trial. In March, Mr. Levine opted to withdraw his guilty plea and go to trial.

He changed course yet again yesterday by accepting the three-to-nine year deal.

Sentencing is set for August 29

GC Apologizes for Saying Judges
Were "Paid Off," Accepts Reprimand

By Alana Roberts
Daily Business Review
New York Lawyer
July 8, 2008

MIAMI - United Automobile Insurance general counsel Charles Grimsley agreed to a public reprimand for saying Miami-Dade judges "are being paid off" by plaintiffs attorneys.

Disbarred NY Lawyer Admits
 Ripping Off His Grandparents

By Daniel Wise
New York Law Journal
New York Lawyer
April 15, 2008

A disbarred Westchester County lawyer has admitted in court that he stole $310,000 from his grandparents.

Chase Caro of White Plains pleaded guilty yesterday to grand larceny and has been sentenced to 2 1/2 to 7 1/2 years in prison by County Court Judge Susan Cacace.

A spokesman for Westchester District Attorney Janet DiFiore said Mr. Caro, 49, admitted stealing money meant for his grandparents' trust fund.

He already had pleaded guilty to another theft of more than $470,000 from another elderly client. He was sentenced to 2 to 6 years on that count.

Mr. Caro agreed to pay restitution of $1.1 million, which also includes funds from a third theft. His sentences will run at the same time.

Mr. Caro, who was disbarred in November, is the son of Robert Caro, the Pulitzer Prize-winning biographer of Robert Moses and Lyndon Johnson.

The Associated Press contributed to this report.

BigLaw Partner Should Face Criminal Charges
Bankruptcy Counsel Tell Judge

New York Lawyer
The Recorder
March 28, 2008

Criminal Charges Against Pillsbury Partner Called for in SonicBlue Bankruptcy By Niraj Chokshi

In an unusual move, attorneys in the SonicBlue bankruptcy are asking a judge to refer one of two lawyers kicked off the case last year to the U.S. attorney's office for alleged bankruptcy crimes.

The motion for referral accuses William Freeman, a partner in Pillsbury Winthrop Shaw Pittman's Los Angeles office, of failing to disclose payments the firm received that allegedly affected its status as a disinterested party in representing electronics maker SonicBlue in its bankruptcy.

"[T]he conclusion Mr. Freeman willfully perjured himself ... has now become utterly inescapable," wrote William McGrane, an attorney with Bay Area firm McGrane Greenfield. He filed the motion last Friday on behalf of his client, SonicBlue Claims -- created to buy creditors' claims against SonicBlue.

"These actions are very rare," said Jesse Fried, co-director of the Berkeley Center for Law, Business and the Economy.

Freeman and Craig Barbarosh, a partner in the firm's Orange County office, were kicked off the case one year ago when San Jose Bankruptcy Judge Marilyn Morgan found they failed to disclose a letter promising investors payment even if SonicBlue filed for bankruptcy. The firm was accused of a second major disclosure failure in November and then again recently.

McGrane accuses Freeman of knowingly failing to disclose receipt of preference payments made on account of antecedent debt -- payments in the 90 days leading up to SonicBlue's Chapter 11 bankruptcy filing. All parties hired in a bankruptcy are legally required to disclose any existing connections with debtors, including preference payments.

Before the company filed for bankruptcy, a retainer account was set up which SonicBlue replenished periodically, according to the filings. The firm withdrew payment from the retainer under the impression that it did not technically constitute payments on account of antecedent debt.

However, McGrane said, in a February 2005 e-mail to Barbarosh, Freeman wrote, "[t]he firm has major exposure here." One week later, Freeman e-mailed Barbarosh the proposed text of an e-mail to the head of the official creditor's committee explaining the retainer account.

"We're going to get fucked ... I'm very uncomfortable," Barbarosh responded.

"We have no chance of success," Freeman replied. "Embarasses [sic] to put my name on this letter."

A firm associate was asked to look into the payments. In an April memo, the associate wrote, unless the court could be convinced otherwise, "it is clear that we did receive payments on account of antecedent debt."

McGrane accuses Freeman of deliberately withholding that information from the court in declarations related to his application to be employed as counsel for SonicBlue in the bankruptcy.

"How sad, and how absolutely criminal, all this misconduct ultimately was," McGrane wrote in the recent filing.

Freeman did not return calls seeking comment on Thursday.

"We have received and reviewed the pleading in question," said John Grenfell, a San Francisco partner with Pillsbury who is representing the firm along with its outside counsel. "We think it has no merit. And we expect to file a response to it by April 7."

According to a response the firm filed in February, the creditors committee investigated the payments and "concluded 'that no such payments constitute avoidable preference payments.'"

New Kind of Jailhouse Lawyer:
Pol-Turned-Felon Gets to Keep His Law License

By Ryam J. Foley
The Associated Press
New York Lawyer
March 26, 2008

MADISON, Wis. - A former state senator convicted of accepting kickbacks could practice law again soon after the state Supreme Court declined Wednesday to revoke his license.

Gary George, a Milwaukee Democrat who served in the Senate for 23 years, was convicted in 2004 on a charge of accepting monthly cash payments that flowed from a nonprofit group that received state funds. He was sentenced to 48 months in prison.

In a 5-0 decision on Wednesday, the Supreme Court rejected a recommendation from state regulators that George's license be revoked for misconduct.

The court said a suspension of four years and three months is enough punishment and perhaps the longest ever imposed in Wisconsin. The court applied the punishment retroactive to March 2004, when his license was suspended.

That means George could be eligible to practice again as early as June.

The court said George's misconduct was extremely serious but disbarring him would be too harsh. The court noted his long public service, previously clean disciplinary record and prospects for rehabilitation.

The court ordered George, who has completed his prison term and is living in Milwaukee, to pay the cost of more than $14,000 for the disciplinary proceedings.

George's attorney, Mark Hazelbaker, called the decision "a significant victory" for his client. George wants to return to work as a lawyer so he can pay a $568,000 restitution order, he said.

"Gary acknowledged that he made some very serious mistakes and knew he was going to face the severest of discipline," Hazelbaker said. "But throughout the whole process he was hoping to have a chance to practice law again and ultimately be able to redeem himself."

George pleaded no contest to his role in a kickback scheme involving Opportunities Industrialization Center of Greater Milwaukee, which had contracts worth $40 million per year to administer the state's welfare-to-work program.

The nonprofit group paid a monthly retainer to attorney Mark Sostarich, typically about $5,800. Sostarich would then send up to $4,670 to George, who performed no legal work in exchange for the payments. The group also "invested" $200,000 of an affiliate's money in a corporation controlled by George's family.

In all, George received $400,000 from the group. He also admitted that he used legislative staffers to perform personal work for himself and his campaign.

Regulators asked for George's license to be revoked because his "conduct involved criminal behavior and dishonesty and a violation of public trust," said William Weigel, a lawyer for the Office of Lawyer Regulation. But he said he respected the court's suspension and the effect was little different.

Lawyers whose licenses are revoked can petition for reinstatement after five years. The court's order allows George to start that process April 1 instead of later this year or early next year, Weigel said.

George will still have to prove that he is fit to practice law before he is reinstated, during a "rigorous process" that can take up to one year, he said.

Justices David Prosser and Louis Butler recused themselves from the case.

Prosser served with George in the Legislature. Butler, who is facing a tough challenge for a 10-year seat on the court in the April 1 election, did not give a reason.

Witness's "Amnesia:" $500,000;
Getting Away With $1.9 Billion Fraud: Priceless

New York Lawyer
March 24, 2008

COLUMBUS, Ohio (AP) — Prosecutors allege a former health care executive accused of witness tampering in a $1.9 billion corporate fraud case tried to bribe a witness to give favorable testimony.

Lawyer for One Month Convicted of Extortion Says
He Was Just Trying to Settle Case

New York Lawyer
March 21, 2008

MANCHESTER, N.H. (AP) - A lawyer who says he was just trying to settle a case has been convicted of extortion.

Daniel Hynes of Manchester told a Concord hair salon to pay him $1,000 15 months ago or face a lawsuit because its different prices for men and women were discriminatory. In one court document, he said the unequal prices at Claudia Lambert's salon caused him mental anguish. That's even though the salon charged women more than men.

This week, a Manchester District Court jury convicted him of theft by extortion, a misdemeanor.

Hynes, 27, said he plans to appeal.

"The conviction goes against the First Amendment," he said. "People have a right to petition the courts."

Asked why he contacted the salon directly, he said he was seeking "as amicable a resolution as possible."

Assistant Attorney General Elizabeth Baker said Hynes sent letters to at least 19 salons in the state. The one to Claudia's said haircut prices should be based on the time required or the length of the customer's hair, not gender.

"I demand payment in the amount of $1,000 in order to avoid litigation," he wrote.

Lambert's husband, Ben Nardi, contacted authorities, who arrested Hynes when he came collect $500.

A jury deliberated for about 90 minutes Wednesday before convicting Hynes, who was represented by a public defender. He faces up to a year in jail and a $2,000 fine.

He started practicing law in New Hampshire a month before sending the letter to Claudia's.

The state Supreme Court committee the handles misconduct by lawyers probably will review the case, said Richard Uchida, a former member of the committee.

NY Government Lawyer Fired for Running
 Solo Practice On the Side for 20 Years

By The Associated Press
New York Lawyer
March 21, 2008

A state Department of Labor attorney is resigning after an investigation found she has been conducting a private law practice on state time for nearly 20 years.

State Inspector General Kristine Hamann says Christine Timber, 58, of Albany, had also been reprimanded in 1994 for conducting business for her private practice while at her state job.

She resigns effective June 8, 2008.

Ms. Timber earned about $100,000 a year in her state job. Department of Labor policy prohibits employees from engaging in any outside business or activity while they are working. Ms. Timber did not immediately return a message left at her home in Albany.

Judge Faults NY Firm's "Frivolous" Pursuit Of Case

By Vesselin Mitev
New York Law Journal
New York Lawyer
March 7, 2008

A personal injury firm maintained a "frivolous" action against a psychologist "long after the record establishe[d]" it had no case, a Nassau County judge has ruled.

In awarding costs and fees to Ethel Cwibeker, Supreme Court Justice Karen V. Murphy found in Dunn v. Khan, 5494/05, that there was "no basis to hold [Ms. Cwibeker] at fault for any part of the plaintiff's cause of action" arising out of a suicide and, thus, sanctions under CPLR §8303-a were appropriate.

The decision will be published Wednesday.

On Sept. 28, 2007, Justice Murphy dismissed the complaint of Mitchell Dunn, brought on behalf of his deceased wife, Pauline, against Ms. Cwibeker, ruling that the psychologist had "submitted ample proof . . . that no doctor-patient relationship had ever been formed" between her and Ms. Dunn.

Albert B. Aquila, who represents Mr. Dunn, continued to allege in an interview yesterday that Ms. Dunn was a patient of Ms. Cwibeker. He said Ms. Cwibeker saw Ms. Dunn twice before her Aug. 25, 2003, death. Ms. Dunn is believed to have taken her own life after being hospitalized.

Ms. Cwibeker "saw her in the hospital for a session and she saw her the day before she committed suicide," said Mr. Aquila of Sullivan, Papain, Block, McGrath & Cannavo in Mineola.

Mr. Aquila said his firm would appeal the sanctions decision, which "goes against case law."

And, although the judge noted that Mr. Dunn did not oppose the summary judgment motion, Mr. Aquila said he has appealed the dismissal of claims against the psychologist.

According to the decision, on Feb. 18, 2005, Mr. Aquila requested copies of Ms. Cwibeker's office records relating to her treatment of Ms. Dunn. The psychologist wrote back that she was not a medical doctor and had only seen Ms. Dunn twice prior to her death.

Another letter seeking copies of Ms. Cwibeker's "psychotherapy and counseling notes" followed on March 7, 2005, to which the psychologist responded in a similar vein.

The initial action commenced on April 26, 2005, with Mr. Dunn alleging that Ms. Cwibeker had rendered "medical and/or psychological care and services to the decedent, Pauline Dunn, from on or about October 2002 continuously up through and including August 25, 2003." An additional action, making the same allegations of medical and psychiatric malpractice against Ms. Cwibeker was commenced on Feb. 10, 2006.

In reply to a discovery request seeking evidence that Ms. Cwibeker had rendered medical or psychological care to Ms. Dunn during the time claimed by Mr. Dunn, "plaintiff stated that there are no such records."

According to the decision, Mr. Dunn admitted at a deposition conducted on July 25 and Aug. 4, 2006, that "he and his wife, Pauline, met the defendant, Ms. Cwibeker for the first time on August 15, 2003" concerning their child's suicide attempt.

That admission was fatal to Mr. Dunn's case, said Rachel Yosevitz Weisman, who represented Ms. Cwibeker.

Ms. Cwibeker "was not the doctor and the deceased was not her patient - there were no records [Ms. Dunn] had ever been a patient," Ms. Weisman, of the Weisman Law Group in Cedarhurst, said in an interview.

Justice Murphy acknowledged that under some circumstances, Mr. Aquila did not have to "unconditionally accept Ms. Cwibeker's blanket denials" of any doctor-patient relationship with Ms. Dunn. But in this case, "absent a scintilla of evidence to the contrary," Mr. Aquila was obligated to accept her denials as true.

"Plaintiff had no evidence to support his allegations that the defendant was the decedent's therapist or that defendant had met and rendered 'medical or psychological care and services to the decedent . . . from on or about October 2002 continuously up through and including August 25, 2003,'" wrote the judge.

Even if the action had been commenced in good faith, it should have been withdrawn after "it became clear that there was no basis to hold [Ms. Cwibeker] at fault for any part of the plaintiff's cause of action," Justice Murphy wrote.

The judge said Mr. Dunn's action should have been unconditionally withdrawn and discontinued against Ms. Cwibeker. Thus, she concluded that its continuation had been frivolous, a finding that mandated the granting of costs, sanctions and reasonable attorney's fees.

Ms. Weisman said the fees could amount to around $75,000.

A hearing will be held on March 25 to determine the amount of the sanctions and whether the fees will be paid by Mr. Aquila's firm or by Mr. Dunn.

Chase Bank Sues Law Firms Claiming Debt-Relief Scam

By Bud Newman
Daily Business Review
New York Lawyer
March 6, 2008

MIAMI - Chase Bank USA is suing two Coral Springs, Fla., attorneys specializing in reducing consumer debt and South Florida affiliates, claiming they are engaging in blatantly illegal and fraudulent practices.

The federal suit filed Friday in Wilmington, Del., accuses Hess Kennedy Chartered, lawyer Laura Hess, Edward Kennedy, affiliated companies and others of using "an unlawful debt elimination scheme" relying on lawsuits challenging valid credit card charges.

Attorney Jeffrey Campos of Coral Springs and the Legal Debt Center, which has the same Coral Springs address and suite number as Hess' law firm, also are named as defendants. In addition, attorneys general in Florida, North Carolina and West Virginia are looking into Hess Kennedy's operations, and the Florida Bar has moved to suspend Hess' license.

The bank suit claims its credit card customers were urged to falsely claim nonexistent billing errors on monthly statements to avoid payment or have the debt erased.

Nationwide, Chase said more than 3,800 credit card holders have used such tactics to avoid paying more than $25 million in legitimate debts.

The Chase attorney who filed the suit, Beth Moskow-Schnoll in Wilmington, declined to comment. A spokeswoman for the bank declined to comment.

The six-count complaint seeks injunctive relief and punitive damages to prevent the defendants from operating a debt reduction "scheme." The complaint claims "tortuous interference with contractual relations" between Chase and its customers, abuse of process, conspiracy and violations of Delaware trade practices and fraud laws.

Chase is asking the court to declare that "billing error disputes asserted by Chase's card members who are represented or assisted by defendants are sham" claims.

Chase also wants the defendants to notify "each card member whom defendants have previously advised, assisted or represented" that the disputes do not eliminate the obligation to pay outstanding debts. Calls to Hess, Kennedy and Campos were not returned. The first item that pops up in a Google search for Hess Kennedy refers to Hess Kennedy Co., an international law firm. Clicking on that reaches Laura Hess & Associates P.A. Hess and Campos are Florida Bar members, but Kennedy is not listed as a member of the Florida Bar. The Florida Bar filed a contempt petition Feb. 11 against Hess with the Florida Supreme Court, seeking a three-month license suspension. The petition noted the high court in 2005 "publicly reprimanded Hess and placed her on probation for three years," but eight new complaints were filed about her work during the probation period.

In a statement dated Oct. 4 on the Hess Kennedy Web site, the company described itself as a law firm that "believes that integrity, honesty and values play a major role in the culture of a company." It said customers can "rest easy" when working with the firm.

Florida Attorney General Bill McCollum hasn't been resting. His office filed a civil suit Feb. 21, claiming Hess Kennedy and its affiliates have bilked thousands of consumers by promising to reduce or eliminate out-of-control credit card or other debts for a fee. Fees appear to vary, according to several online complaints that customers posted about problems they had with the company. A Rhode Island man said Hess Kennedy charged him $700 but paid none of his credit card bills and his "credit rating has been destroyed by these people." A Minnesota woman claimed she was charged $500 for credit counseling and was referred to Hess Kennedy about getting a refund but concluded it was "a bunch of ripoffs." The North Carolina attorney general's office has filed a suit with allegations similar to the Chase action. The Better Business Bureau of Southeast Florida has received 140 complaints about the firm and given it a failing grade.

The West Virginia attorney general's office obtained an injunction Dec. 14 barring Florida attorneys employed by Hess Kennedy from settling West Virginia consumer debts until they comply with a state investigation. The monthly service fee for debt settlement firms is capped at 2 percent of consumer payments in West Virginia, where state investigators say it appears Hess Kennedy has been charging more.

The Chase and state suits make essentially the same claims. They say Hess Kennedy and the affiliated Consumer Law Centers in Boca Raton and Delray Beach, Fla., falsely told customers that their credit card companies had violated the federal Fair Credit Billing Act. The law firm or the customers then wrote letters to credit card companies disputing all charges. In a Feb. 21 news release, McCollum said Hess and related companies falsely told clients that they "did not have to pay creditors and creditors could not sue or otherwise take action against them" once the letters were sent to credit card companies claiming FCBA violations. Chase's federal court suit said defendants misled card members into believing they can stop payments on debts dating back years "until Chase investigates and resolves the purported 'billing error disputes' to their satisfaction."

"Defendants' conduct is entirely in bad faith and serves no legitimate purpose," the Chase suit said. "Defendants' ulterior goals are to extract fees from card members who should be paying the money to Chase to satisfy their debts and to maliciously harass Chase in an improper (albeit unsuccessful) attempt to coerce the elimination of their clients' legitimate debts."

Jailed Lawyer Faces More Heat From SEC in $1 Billion Scam

By John Pacenti
Daily Business Review
New York Lawyer
March 4, 2008

FORT LAUDERDALE - Last year attorney Stephen Ziegler got sentenced to five years and had his law license suspended by the Florida Bar for his role in a $1 billion viaticals fraud through the now-defunct Mutual Benefits Corp.

Federal authorities are not done with him yet, though.

The Securities and Exchange Commission filed a complaint Feb. 15 against Ziegler and two other convicted Mutual Benefits officials: Raquel Kohler, the company’s chief financial officer, and Ameer Khan, former president and nominee shareholder of related company, Viatical Services.

The complaints aim to bar the individuals from participating in any type of securities fraud in the future or face the possibility of criminal contempt of federal court.

"We only have so many tools in our quiver and we felt this was an important complement to the criminal convictions," said Teresa Verges, assistant regional director in the SEC office in Miami.

The way viatical settlements work is that life insurance policies for the dying and elderly are sold at a discount. Investors collect on the difference between the insurance payout at death and the purchase price.

Mutual Benefits started failing when people started living longer than the company projected.

In the end, the company became nothing but a shell for a Ponzi scheme, according to SEC investigators, with top company officials living in luxury while paying off early investors with money that arrived from later customers who were lured with promises of big returns.

From 1994 to 2004, the company bilked more than 30,000 investors worldwide of $956 million.

Last year, President Peter J. Lombardi was sentenced to 20 years in prison. Ziegler, Kohler and Khan each are serving five-year prison sentences. Lombardi agreed to pay $1.5 million to the receiver and a $6 million penalty to the SEC. "Ziegler was a substantial participant in the MBC offering fraud," the complaint reads. "He served as a primary securities regulator counsel for MBC."

Ziegler falsified documentation in connection with the purchase and assignment of group insurance polices, according to the complaint. He then filed false reports with the state regulators.

Kohler, according to the complaint, helped conceal the fraud and wired investor funds to accounts controlled by MBC's principals. "Kohler also participated in the preparation and filing of false and misleading information with state of Florida regulators to conceal the fact that a convicted felon with a disciplinary history was a controlling principal of MBC," the complaint reads. Khan tracked policies and performed post-investment services for MBC and "was well aware of MBC's misuse of investor funds and helped conceal the fraud," according to his complaint. The SEC has said the company really was run by Leslie and Joel Steinger, whom the SEC permanently barred from violating securities laws in 1998. According to the SEC, the Steingers and their relatives were paid $26 million in consulting fees from MBC.

Now that is what is happening to Ziegler, Kohler and Khan. Both Kohler and Khan have agreed to terms with the SEC but Ziegler has yet to consent to judgment. The SEC is not seeking monetary relief because the defendants have been ordered to pay millions in restitution by the U.S. District Court.

"It’s an important message to send given the roles," said the SEC's Verges. "If they ever violated securities law again, we can immediately apply to court for contempt and additional penalties. A judge can refer the matter to criminal contempt.

"The complaint isn't good news for Ziegler if he ever wants to practice law again."

Ziegler may reapply to practice law after his prison sentence is up, said Francine Walker, spokeswoman for the Florida Bar. "The process is fairly lengthy where the applicant has to prove rehabilitation under suspension," she said. "It's a process and not automatic."

Walker said the new SEC complaint will find its way into Ziegler's disciplinary file. She said investigators will determine if additional action is required against the attorney.

                        Bookkeeper Who Stole $4 Million
                 From Brother's NY Law Firm Pleads Guilty

By Vesselin Mitev
New York Law Journal
New York Lawyer
March 3, 2008

Anthony Galasso, the Long Island bookkeeper who stole more than $4 million from his brother's law firm, pleaded guilty last week to 22 charges, including two counts of grand larceny.

In return, Mr. Galasso, was promised a term of 2 1/2 to 7 1/2 years in prison when he is sentenced on April 28. Mr. Galasso was arrested in January 2007 after the 22-count indictment was brought by the Nassau County District Attorney's Office.

His brother, Peter J. Galasso, a partner in Galasso, Langione & Botter of Garden City, notified authorities after finding a client's escrow account depleted.

In court last week before County Judge George R. Peck, Mr. Galasso admitted using client money to fund personal expenses, including private jet trips, a luxury car and tickets to shows and sporting events .

Peter Galasso called the guilty plea a sign that his brother had "[run] out of options."

The firm has filed a civil suit against Anthony Galasso and two of the firm's former banks, claiming the banks enabled the theft.

Former In-House Lawyer Avoids Prison in FBI Fraud Case

By Lynne Marek
The National Law Journal
New York Lawyer
February 29, 2008

CHICAGO — A federal court in Chicago sentenced a former Siemens AG subsidiary attorney to four years of probation with electronic monitoring for her role in facilitating a joint venture fraud by the company in 2000 and lying to the FBI about the matter.

The in-house lawyer, Ellen Roth, pleaded guilty last year to drafting documents that falsely represented a Siemens Medical Solutions USA joint venture as being a minority-owned business eligible to bid for a $49 million Cook County Hospital contract in Chicago when it was in fact not a qualified bidder. She ultimately admitted lying to the FBI on the eve of a trial in the U.S. District Court for the Northern District of Illinois.

Federal prosecutor Barry Miller asked U.S. District Judge John W. Darrah at a hearing yesterday to impose the 60-month prison sentence suggested by federal sentencing guidelines, telling the judge that the public attention to the case would be a deterrent to other such conduct.

While Darrah said he agreed that the case could serve as a deterrent, he rejected the recommendation for prison time.

Roth's attorney Michael Monico told the judge that Roth simply hadn't had the strength to walk away from the fraud because she was the main breadwinner for her husband and children and the provider of healthcare benefits for the family. She had led an "unblemished life" up until the incident and was unlikely to ever appear again as a criminal defendant, he said. Roth, 62, told the judge that her conduct was "an aberration ­ a terrible thing" for which she was embarrassed and remorseful.

Monico, a lawyer with Chicago-based Monico, Pavich & Spevack, was pleased with the outcome, saying Darrah came to a "fair sentence." Roth must also pay a $12,500 fine, perform 200 hours of community service and continue counseling she has been receiving.

"It was in keeping with the nature of the offense and the defendant's background," Monico said.

Miller declined to comment.

Daniel Desmond, another Siemens executive involved in the fraud who pleaded guilty to perjury, was also sentenced to four years probation and a smaller fine of $10,000.

                Illegal Bills: Lawyer Busted for Counterfeiting

By Amanda Bronstad
New York Lawyer
The National Law Journal
February 27, 2008

LOS ANGELES —­ Federal immigration authorities have arrested a Los Angeles attorney, charging him with illegally selling hundreds of counterfeit Federal Reserve notes, some of which, if real, would have been worth $500 million.

For prior articles click here

                      NY Lawyer Sees Plea Deal Unravel After
         Swindled Ex-Client Tells Judge He's Being Conned
 

NY Lawyer Admits Stealing $2.1 Million

By Anthony Lin
New York Law Journal
New York Lawyer
February 15, 2008

A Manhattan lawyer has pleaded guilty to stealing $2.1 million in client funds from an escrow account.

Real estate lawyer Ira L. Berman took money placed in his care as down payments on property sales and used it for his personal and office expenses.

According to the Manhattan District Attorney's Office, which announced the guilty plea yesterday, at least eight people lost money that was placed in escrow with Mr. Berman for the purposes of consummating property sales primarily in Manhattan but also in Southampton, N.Y.

Prosecutors said about $3.2 million is missing, though $1.1 million remains in the escrow account and will be distributed to Mr. Berman's victims.

Mr. Berman, 66, has already been promised a sentence of three-to-nine years in prison on a charge of first-degree grand larceny.

NY Lawyer Accused of Stealing $266,000 From Client

By Daniel Wise
New York Law Journal
New York Lawyer
February 14, 2008

A Westchester attorney was arraigned yesterday on a charge he stole nearly $266,000 from a client to cover personal debts and funds owed to others.

The lawyer, Roger Cohen, 69, pleaded not guilty to one count of third-degree grand larceny and was released on $250,000 bail, according to the Westchester County District Attorney's Office.

Mr. Cohen was accused of taking more than $294,000 from the proceeds of a real estate sale for his client, who owned a real estate investment company. The proceeds were supposed to have been placed in an Internal Revenue Services account to be established for the client, whose name was not released.

When the client demanded the money's return, Mr. Cohen refunded only $28,671, according to prosecutors.

NY Lawyer Loses License for 30 Months
Over "Exorbitant" Fees, Ethical Breaches

By Daniel Wise
New York Law Journal
New York Lawyer
February 4, 2008

A Manhattan divorce lawyer who took nearly $41,000 in fees from an escrow fund that had been designated for other purposes must be suspended for 2 1/2 years, the Appellate Division, First Department, ruled last week.

The panel also found that the lawyer, Leah Larsen, 68, violated ethical rules by demanding an "exorbitant" fee not backed by time records and by pressuring her client to withdraw a complaint about the fee he had made to the Dutchess County judge handling the divorce.

One judge on the panel, Justice James M. McGuire (See Profile), would have disbarred Ms. Larsen. But the majority, consisting of Justices Richard T. Andrias (See Profile), David B. Saxe (See Profile), Eugene Nardelli (See Profile) and John W. Sweeny Jr. (See Profile), found the suspension severe enough in view of Ms. Larsen's previously unblemished 28-year career.

According to the opinion in Matter of Larsen, M-5004, Ms. Larsen had told her client, Conrad Tebbetts, that he could pay her with $40,750 from the proceeds of the sale of the divorcing couple's home.

Justice James V. Brands had ordered the money be paid into Mr. Tebbetts' 401(k). Mr. Tebbetts suggested Ms. Larsen take only about $30,000 for the fee. Ms. Larsen then sent her client a one-page bill for $168,400, claiming 852 hours of work at $200 an hour without detailing her work, the decision reported.

When Mr. Tebbetts wrote to Justice Brands to complain about the bill, Ms. Larsen threatened to collect the entire $138,000 balance due at an arbitration unless he withdrew his letter to the judge.

Lawyer's Bullying Secretary Over Weight Demands
She Exercise Were Likely "Outrageous," Judge Rules

By Thomas B. Scheffey
The Connecticut Law Tribune
New York Lawyer
February 1, 2008

Noted Greenwich, Conn., criminal lawyer Philip Russell's conduct toward his legal secretary will probably be considered "outrageous" by the judge or jury hearing her civil trial, concluded Bridgeport, Conn., Superior Court Judge Richard P. Gilardi, awarding her a $75,000 pre-trial lien. Megan Lamothe is suing Russell for intentional infliction of emotional distress.

Disbarred Lawyer Gets 41-Month
Term for Settling Clients' Cases, Keeping the Cash

By The Associated Press
New York Lawyer
January 18, 2008

A federal judge has sentenced former Lafayette, La. attorney Mel Credeur to 41 months in a federal prison and ordered him to pay more than $769,000 in restitution.

Credeur accepted a plea agreement last year and pleaded to one count of making false statements to a bank and one count of forging securities of private entities. He had been indicted in 2006 on charges that he lied to banks by asking for extensions on attorney-client lines of credit, even though he had already settled their cases.

Prior to the plea agreement, Credeur also faced 23 counts of forging securities of private entities, stemming from allegations that he settled his clients' cases without their knowledge and then kept their settlements by forging their signatures.

According to the plea agreement, Credeur faced possible fines of more than $1 million and up to 40 years in prison. U.S. District Judge Richard Haik on Tuesday sentenced Credeur to 41 months on each count to run concurrently and five years of supervised release afterward.

Credeur was disbarred in April 2007, according to a release from the Louisiana Supreme Court.

Lawyer Who Testified Against Partner for Ripping
 Off Clients Is Now  Charged With Doing the Same

By The Associated Press
New York Lawyer
January 4, 2008

A Memphis attorney who testified last year against a partner who stole from clients now faces accusations that he stole as well.

Phoebe Copeland claims in a lawsuit that J. Richard Rossie stole more than $346,000 from her after she granted him power of attorney to handle her estate.

Copeland hopes to block any settlement between Rossie and Darrelle Miller, another client who is suing the attorney, claiming Rossie stole more than $1 million from her.

Rossie's attorney, James Wilson, could not be reached for comment on Thursday.

Copeland's attorneys argue that a settlement with Miller would make Rossie insolvent and unable to pay Copeland.

Chancellor Arnold Goldin has issued a restraining order temporarily preventing Rossie from distributing any money.

According to a financial statement, Rossie is worth $3.85 million, but Copeland's attorneys say much of that is immune from judgment.

Copeland is accusing Rossie of taking her money by writing at least 42 checks to himself between August 2000 and June 2007, using funds from the law firm's escrow account. He then deposited the money in personal accounts at various banks, the suit alleges.

Rossie is a former partner of John Houser Parker who pleaded guilty last year to stealing nearly $2 million from clients and was sentenced to 22 years in prison. Rossie testified against Parker at a sentencing hearing.

State prosecutor Steve Crossnoe would not say whether he is considering criminal charges against Rossie.

Lawyer Who Sexually Assaulted Five or More Minors
 at Courthouse Sentenced to 25 to 50 Years

By Amaris Elliott-Engel
The Legal Intelligencer
New York Lawyer
December 24, 2007

A former Philadelphia criminal defense attorney convicted of several sex crimes with minors, including an estimated five incidents in the Criminal Justice Center, was sentenced last week to serve 25 to 50 years in prison.

Larry Charles, 50, was sentenced Thursday by an out-of-county judge, Berks Common Pleas Senior Judge Albert A. Stallone, for sex crimes between 1999 and 2007 related to six girls authorities said Charles raped, molested or groped. Charles pleaded no contest to crimes including rape, indecent assault and corruption of minors. He received consecutive sentences for the crimes related to each of the girls, including seven to 14 years for raping a 5-year-old girl.

The girl was raped vaginally and anally in both a motel in New Jersey and a bank deposit room, said Jim Carpenter, the assistant chief of the Philadelphia District Attorney's Office's family violence and sexual assault unit. Authorities said Charles sexually abused the girls in both of his offices in Center City and Southwest Philadelphia, in the deposit rooms of banks, in the Criminal Justice Center (CJC) and in motels.

The criminal case against Charles broke open when sheriff's deputies found him with a 14-year-old girl after engaging in sexual contact with her in a third-floor attorneys' lounge at the CJC on Martin Luther King Day 2007.

Deputies began searching for Charles because they found it unusual that he was in the building on a public holiday with a young girl; Deputy Andrew Ortiz had to break down the door, and the girl was found cowering inside, Carpenter said. Charles was found naked.