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NY Lawyer
Faces Bribery Charge
By Vesselin Mitev
New York Law Journal
New York Lawyer
March 5, 2010
A Long Island attorney
previously charged with stealing $700,000 from real estate investors
is now facing an attempted bribery charge after allegedly trying to
pay off a Nassau County clerk to speed up his request for
information on a property he was trying to close on.
According to prosecutors,
Frederic Powell, 54, was told by a Hempstead building's department
clerk that his request would normally take five days to process. Mr.
Powell, of East Meadow, then told the clerk he needed the
information that day and placed a $100 bill on the counter, and
asked "if the process could be sped up." When he was informed that
it could not, he placed another $100 bill on the counter, which was
again rejected. Before leaving, Mr. Powell allegedly crumpled up a
$50 bill and threw it at the clerk, according to a statement by
Nassau County District Attorney Kathleen Rice.
He faces one count of
third-degree attempted bribery, which carries a maximum four-year
sentence. He is due back in court on March 17. Mr. Powell is also
facing grand larceny charges in an unrelated incident for allegedly
pocketing bridge loans in deals he brokered in 2006 and 2007. He has
pleaded not guilty.
NY Lawyer
Who Admitted Ripping Off His Clients for Millions Wants Them to Pay
His Fees
By Vesselin Mitev
New York Law Journal
New York Lawyer
March 5, 2010
Steven T. Rondos, the former Brooklyn attorney who admitted to
stealing millions of dollars from guardianship accounts he oversaw,
is fighting to be paid for work he claims he did on behalf of the
incapacitated people he was charged with fleecing.
Mr. Rondos, who is in jail
awaiting sentencing for the thefts, contends he owes $1.2 million in
restitution while prosecutors are seeking nearly $2.7 million. At a
restitution hearing on Wednesday, Mr. Rondos testified that he had
fulfilled his obligations as a guardian with regard to the "personal
needs and day-to-day expenses" of his wards. Mr. Rondos told the
court he is owed at least $35,000 for work he performed on a dozen
accounts before he was charged with money laundering and grand
larceny.
Mr. Rondos, who has since
been disbarred and faces between six and 18 years as a result of his
plea, told Acting Supreme Court Justice Ronald A. Zweibel in
Manhattan that his outstanding legal fees would go to repay the
victims of his thefts. He said he hoped he could pay off the balance
once he served his sentence and begins working again.
"I am asking the court, for
the work that I have done, to credit me for that amount," Mr. Rondos
said.
The hearing resumes Monday.
Mr. Rondos' former Brooklyn firm, Raia & Rondos, was also charged in
the thefts. Trial in that case starts April 12
Execution-Style Murder of NY Lawyer,
His Wife Blows Lid Off Alleged $1 Million Conspiracy
By Mark Fass
New York Law Journal
New York Lawyer
February 23, 2010
In July 2008, Brooklyn attorney Mark Schwartz and his wife Christina
Petrowski-Schwartz, a divorce mediator, were found shot
dead—"execution-style," according to the tabloids—in their bed in
their Marine Park home.
Yesterday, the Brooklyn
District Attorney's Office announced the indictment and arrests of
four defendants who, along with the couple themselves, allegedly
operated a million-dollar criminal conspiracy involving money
laundering, identity theft, mortgage fraud and larceny.
Read the indictment.
The investigation into the
murders remains ongoing, and the prosecution has not alleged a
direct link between the conspiracy and the deaths.
Rather, the district
attorney's office said the murder probe led to the discovery of the
crime ring.
According to the indictment
filed yesterday, four individual defendants — Robert Delvicario,
Lennox Johnson, Shanda Bruce and Thermine Remy — joined the couple
in a series of scams in order to steal and launder money from, among
others, the couple's clients.
The defendants allegedly
recruited straw buyers to participate in fraudulent real estate
transactions, then laundered the proceeds through forged documents
and stolen identities. Prosecutors said that their crimes stretched
from Brooklyn to Queens, Long Island, Westchester County,
Connecticut and New Jersey.
One of the main victims of
the alleged conspiracy was Tiffany Partners, the principal developer
of a Carroll Gardens condominium and a client of Mr. Schwartz.
According to the indictment, the defendants drained some $270,000
deposited by the corporation into an escrow account to bond
mechanics liens filed by contractors against the property.
The defendants—which also
include three corporations, Adonis Abstract (which was owned by the
Schwartzes), LBW Corp. and Robo Capital Securities—are charged with
a wide range of crimes, including enterprise corruption, grand
larceny and money laundering.
"These defendants thought
they could bankroll their extravagant lifestyles by stealing from
clients who trusted them, but as is often the case, they eventually
turned on each other, robbing their own partners in crime, as well,"
District Attorney Charles J. Hynes said yesterday at a news
conference. "My office will continue to work with the NYPD to
determine who killed Mark Schwartz and Christina Petrowski."
According to the
indictment, three of the defendants—Mr. Delvicario, Mr. Johnson and
Ms. Bruce—ultimately "turned" on the Schwartzes and began stealing
from Mr. Schwartz's firm.
Mr. Delvicario, a former
business partner of Mr. Schwartz, has long been considered a suspect
in the murders of Mr. Schwartz, 60, and Ms. Petrowski-Schwartz, 48.
Reached for comment
yesterday, Mr. Delvicario's attorney, solo practioner Joseph Mure,
said, "We'd love to see the discovery on how they connect [Mr.
Delvicario] to all this."
Mr. Mure added that his
client "obviously denied and continues to deny" any responsibility
for the murders.
The individual defendants
were arrested early yesterday morning and face prison sentences of
up to 25 years.
Assistant District
Attorneys Laura Neubauer and Wojciech Jackowski of the Rackets
Division are prosecuting the case, which investigators dubbed
"Operation Bankroll."
Two NY
Lawyers, One Ex-Lawyer
Arrested in Mortgage Fraud Probes
By Mark Fass
New York Law Journal
New York Lawyer
February 5, 2010
Brooklyn District Attorney
Charles J. Hynes announced yesterday that 12 people, including two
lawyers and one ex-lawyer, have been charged with participating in
various, unrelated mortgage and real estate scams.
Attorney Jarrett Haber was
charged with using Brooklyn properties to secure mortgages without
the properties' owners' permission.
Attorney Alan Rocoff, the
court-appointed referee for the sale of a foreclosed church,
allegedly pocketed the net proceeds from the sale, more than
$200,000.
And former attorney
Alexander Landy, who resigned from the bar in 2006 after being
accused of failing to safeguard client escrow funds, was charged
with grand larceny and falsifying business records for selling a
building without repaying the underlying mortgage.
Ex-BigLaw
Partner Charged in Corruption Probe
By Brian Baxter
The American Lawyer
New York Lawyer
January 25, 2010
A federal grand jury in
Raleigh, N.C., has charged C. Ruffin Poole, a former partner at
McGuireWoods and one-time chief legal aide to former
North Carolina Gov. Michael Easley, with
51 counts of corruption. As
prosecutors were closing in, Poole left McGuireWoods last month.
Prosecutors claim that the
37-year-old Poole extorted money from key Easley supporters through
his role as the governor's legal counsel and took action on
environmental permits to push forward development projects in which
he was a silent investor.
The
64-page indictment charges
Poole with bribery, racketeering, money laundering and deprivation
of honest services. The News & Observer of Raleigh reports
that while the indictment doesn't name any other defendants, one
well-known developer in North Carolina circles resigned on Thursday
from a position he held on the state's Board of Transportation.
The indictment against
Poole is the first stemming from a long-running probe by federal
prosecutors into Easley, who served as governor of North Carolina
from 2001 until last year. Easley, who previously served as the
state's attorney general from 1993 until 2001,
joined McGuireWoods last April
along with Poole and another former adviser named Franklin Freeman
Jr.
All three became partners
at the firm, with Easley serving as a corporate partner in Raleigh,
specializing in economic development, life sciences and energy
issues. Easley also serves as a senior adviser for
McGuireWoods Consulting, the firm's public affairs
subsidiary.
Joseph Cheshire of
Raleigh's
Cheshire Parker Schneider Bryan & Vitale
is representing Easley. According to The News & Observer,
Easley released a statement through Cheshire that said in part:
"We have reviewed the
indictment of Ruffin Poole. While Governor Easley has no knowledge
of the conduct that makes up the criminal allegations therein, he
has faith in Ruffin Poole and finds it hard to believe that he would
ever intentionally violate the law. Ruffin Poole, like anyone else
charged with a crime, deserves the presumption of innocence, not a
rush to judgment."
Joseph Zeszotarski Jr., a
partner at North Carolina firm
Poyner Spruill in Raleigh,
is representing Poole. Last month Zeszotarski had his client
invoke his Fifth Amendment right
not to incriminate himself when testifying before the State Board of
Elections.
A McGuireWoods spokesman
told The Am Law Daily that Poole resigned from the firm last month.
Easley, who has maintained his innocence throughout the ordeal, is
still employed by the firm.
First Assistant U.S.
Attorney John Stuart Bruce and Assistant U.S. Attorney Dennis Duffy
from the economic crimes section of the U.S. Attorney's Office in
Raleigh are prosecuting the case against Poole.
This article first
appeared on
The Am Law Daily
blog on AmericanLawyer.com.
Disbarred
Attorney, Partners Busted for
Scamming Struggling Homeowners
By Amanda Bronstad
The National Law Journal
New York Lawyer
January 25, 2010
An ex-lawyer in Irvine,
Calif., has been arrested on charges of defrauding more than 400
victims in a $1.25 million loan modification scam targeting
struggling homeowners.
According to the Orange
County, Calif., district attorney's office, Christopher Lee Diener,
42, along with two business partners, defrauded homeowners by
promising loan modification services in exchange for advance
payments. The trio allegedly told customers that they would
guarantee their loan modifications, negotiate lower rates with
lenders, reduce the principal on their mortgages and have lenders
forgive second mortgages or late fees.
The accused, who were
neighbors, operated under the names Home Relief Services LLC, U.S.
Loan Mod Processing, HRS Communications, The Diener Law Firm and
Diener Law Group, according to the district attorney's office.
Diener allegedly served as the attorney in the scheme.
Also arrested was one of
Diener's business partners, Terrence Green Sr. Diener and Green are
each being held on $1.5 million bond and are expected to be
arraigned on Jan. 26 in Santa Ana, Calif. Each faces one count of
conspiracy to commit grand theft and 97 counts of grand theft by
false pretense — both felonies. They face a state prison sentence of
up to 70 years.
A warrant has been issued
for the arrest of the other business partner, Stefano Joseph
Marrero.
Diener lost his license to
practice law in October after the State Bar of California found that
his conduct posed "a substantial threat of harm to his clients or
the public." California Attorney General Jerry Brown has filed a
civil suit against all three defendants.
In April, the State Bar of
California launched its Loan Modification Task Force, targeting
attorneys for alleged loan modification misconduct. Since then, more
than a dozen attorneys have resigned or been placed on involuntary
inactive status. About 250 lawyers are under investigation. Suzan
Anderson, supervising trial counsel for the State Bar of California,
said that Diener, who faces a trial before the State Bar of
California next month that could lead to his being disbarred, is the
first attorney under investigation who has been arrested.
But she indicated that
there could be more arrests in the future.
"When we see something that
looks, for example, like theft, we'll send it over to the DA's
office. When we see something that looks like fraud, we'll send it
to the DA's office," she said. "The State Bar has been and continues
to refer attorneys to the DA's offices, or the proper law
enforcement offices, when we find something that we feel they need
to take a look at."
Diener's attorney in that
suit, Jefford Davis, a solo practitioner in Brea, Calif., did not
return a call for comment.
NY Lawyer
Busted in Bribery Scheme
By The Associated Press
New York Lawyer
January 7, 2010
A former Yonkers city councilwoman was accused in
a federal indictment
yesterday of accepting bribes in exchange for crucial votes on two
real estate developments. Sandy Annabi, a Democrat who recently left
office, accepted a series of lucrative gifts designed to curry her
favor on the development deals, according to the indictment. Two
others—Zehy Jereis, the former head of the Yonkers Republican Party,
and attorney Anthony Mangone of Santangelo Randazzo & Mangone in
Hawthorne—also were indicted.
Southern District U.S.
Attorney Preet Bharara said cash payoffs helped Ms. Annabi come up
with the downpayments on property she was buying and also paid her
mortgage, utility and cable TV bills. Ms. Annabi originally opposed
the real estate projects, including a $685 million retail
development known as Ridge Hill. But Mr. Bharara said she switched
her votes under the influence of more than $166,000 in payments
arranged by her co-defendants.
Ms. Annabi left office days
ago when her term expired. She was to be arraigned yesterday on
bribery, corruption and extortion charges. The indictment also said
she did not live in the district she represented and filed false tax
returns in 2005 and 2006. Prosecutors said one developer funneled a
$30,000 cash payment to Ms. Annabi through Mr. Mangone to get her
support. A second developer promised Mr. Jereis a $60,0000-per-year
consulting job if he could get Ms. Annabi to change her vote on the
project. Mr. Mangone was arrested yesterday in Purchase; the other
two defendants surrendered to authorities
The
Attorney and the Jailhouse Lawyer:
NY Man Disbarred for Having Convict Do His Lawyering
By Mark Hamblett
New York Law Journal
New York Lawyer
January 6, 2010
A Garden City lawyer has
been barred from practicing in the Southern District for accepting a
$5,000 retainer from a prisoner but doing little or no legal work.
Uzmah Saghir of Saghir &
Associates was stricken from the rolls of practicing attorneys by
the district's Committee on Grievances, effective Nov. 30, 2009.
According to an opinion by
Committee Chair Judge Jed S. Rakoff, Ms. Saghir accepted the money
from the inmate's family but then had another prisoner draft and
file a motion to set aside his sentence for narcotics convictions.
Three other clients, the court said in
Matter of Uzmah Saghir,
M-2-238, gave testimony indicating that Ms. Saghir "charged
substantial fees and did no work on their behalf
FTC Seeks
Contempt Charges Against
Lawyer Who Won't Turn Over Fees
By Jenna Green
Legal Times
November 10, 2009
The Federal Trade
Commission has filed contempt charges against an attorney for
refusing to fork over fees he was paid by the operators of an
illegal Ponzi scheme.
The lawyer, solo
practitioner Jeffrey Benice of Costa Mesa, Calif., was ordered in
March 2009 to turn over $238,300 to the FTC by a federal judge
Nevada. The court also imposed a $18.9 million judgment on Benice’s
clients for running a fraudulent "Internet kiosk" business in
violation of the FTC Act and the agency’s franchising rule.
According to the FTC, the
defendants – Charles Castro, Network Services Depot, Inc. and
others, paid Benice a $375,000 retainer in January 2005.
Judge Lloyd George of U.S.
District Court for the District of Nevada in March 2009 determined
that Benice’s fee was derived from the defendants’ unlawful conduct
and was subject to consumer restitution. He allowed Benice to keep
$136,700 for his work but ordered him to return the balance -
$238,300 - within 10 days.
The FTC says it is still
waiting for Benice’s payment, and now asks the court to hold him in
contempt.
Benice was a partner at
Brobeck, Phleger & Harrison from 1986 until 1994, when he launched
his own criminal and civil trial practice, according to his
website. He is a 1978 graduate of UCLA School of Law
and clerked for Justice F. Douglas McDaniel in the California Fourth
District Court of Appeal in 1978.
Benice could not be reached
immediately for comment.
In court papers, Benice
argued that he could not afford to comply with the order, but
offered to pay $2,500 a month. The FTC says this is not enough,
noting that Benice in a deposition said he makes an average of
$400,000 a year. The FTC also noted that he spends more than $3,100
a month in car payments alone, for a BMW, a Porshe Turbo, a Jeep
Wrangler and a motorcycle.
The FTC wrote that Benice
and his firm "have not explained why they have not put money aside
every month to restore the funds that the Court found rightfully
belonged to consumers. Apparently Benice did not heed the Court’s
March 2006 warning that he should factor such a risk into his fee
calculations."
Judges
Reject NY Attorney's
Bid to Resign "Gracefully," Disbar Him
By Noeleen G. Walder
New York Law Journal
New York Lawyer
October 28, 2009
An attorney who continued
to practice law after being suspended has been disbarred.
Howard L. Blau, who had an
office in Manhattan, was suspended in February 2008 based on
"substantial admissions" that he misappropriated client funds.
However, he failed to notify clients of the suspension, continued to
maintain a Web site identifying himself as a lawyer and represented
a seller in a real estate deal.
After the First Department
Disciplinary Committee moved to disbar Mr. Blau, he asked the court
to allow him to "resign gracefully." Claiming he was on a number of
psychiatric medications, Mr. Blau argued he was "emotionally unable
to participate in any hearings or referrals to referees" and "cannot
handle the stress which would be generated by such proceedings."
However, he would not admit
the charges against him and said he was unwilling to "prostrate
myself in order to resign from the Bar."
The Appellate Division,
First Department, refused Mr. Blau's bid to resign, concluding that
he had "openly and notoriously engaged in the unauthorized practice
of law" in
Matter of Blau,
M-2914.
Closing
Bell: Lawyer Admits Losing
Million of Clients' Cash Playing the Stock Market
By Amanda Bronstad The
National Law Journal
New York Lawyer
October 5, 2009
A Southern California
lawyer who lost nearly all of a $2.5 million class action recovery
by investing client trust funds in the stock market has pleaded
guilty to criminal charges.
Sandeep Baweja, 39, of the
Baweja Law Group in Irvine, Calif., pleaded guilty on Oct. 1 to one
count of wire fraud and one count of obstruction of justice. He
faces a maximum sentence of 30 years in federal prison and fines of
up to $500,000.
"One of the worst things an
attorney can do is to steal from his clients. Another is to lie to
the court. Mr. Baweja did both," said Assistant U.S. Attorney
Richard Robinson, lead prosecutor in the case. "To his credit,
however, he eventually decided to self-report his misconduct to the
authorities."
Baweja's attorney, Jeffrey
Rutherford, a partner in the Los Angeles office of Crowell & Moring,
issued a statement via e-mail.
"Before anyone had learned
about what he'd done, Mr. Baweja stepped forward and self-reported
his conduct to the Court, his clients, the State Bar, and the
criminal authorities," Rutherford said. "He did this, fully
understanding the consequences, because it was the right thing to
do. He has agreed to plead guilty for the same reason."
In 2007, Baweja filed a
class action on behalf of current and former agents of ZipRealty
Inc., alleging that their employer failed to pay certain sales
commissions, refused to reimburse business expenses and made
unlawful wage deductions. The case settled later that year for $3.55
million.
On March 10, 2008, U.S.
District Judge S. James Otero of the Central District of California
approved the settlement, which included about $887,000 in attorney
fees for Baweja and his co-counsel, Ernest Franceschi, a solo
practitioner in Los Angeles. Baweja received 75% of the fee award,
according to an information filed with his plea agreement.
Approximately $2.5 million
was deposited into an account at Union Bank of California for
approximately 800 class members, according to court documents.
Baweja clandestinely transferred all of that money, plus some of his
awarded legal fees, to an online stock brokerage account with TD
Ameritrade Inc., from which he began investing in the securities
market.
"In pursuing his fraudulent
scheme, defendant Baweja removed client trust funds from the safety
and security of an insured fiduciary bank account at Union Bank, and
placed them at extreme risk by using them to day trade securities on
margin," federal prosecutors assert in the information.
During 2008, Baweja failed
to disclose the real reason for his delays in distributing the
proceeds to the class, according to court documents. As of December
2008, Baweja had lost all but $55,000 of the money. About $121,500
ended up being distributed to 46 class members before Baweja
confessed that he had lost the rest. He filed a motion to withdraw
from the case; at least two lawsuits were filed on behalf of class
members seeking to remove Baweja and Franceschi from the case.
Otero granted Baweja's
motion and disqualified Franceschi from the case.
A State Bar of California
security fund is expected to reimburse class members, according to
court documents.
Baweja is to make his first
court appearance later this month.
Disbarred
NYer and Ponzi Scheme
Embroil BigLaw Firm in Malpractice Fight
By Julie Kay Daily
Business Review
New York Lawyer
September 2, 2009
MIAMI - The receiver in an
alleged $347 million Ponzi scheme has filed a malpractice lawsuit
against Holland & Knight and partner Scott MacLeod, claiming they
failed to provide investors with crucial information about the
disbarred attorney behind the investments.
The suit filed Monday in
Sarasota Circuit Court accuses the law firm and its attorney of
preparing disclosure documents for investors that failed to mention
Arthur Nadel, who headed the hedge funds, was a disbarred New York
attorney who had drained a client’s escrow account. The suit also
accuses Holland & Knight of conflicts of interest by representing
Nadel and his investment funds simultaneously.
The suit seeks in excess of
$50 million in punitive damages, receiver Burt Wiand said.
Karen McBride, a
spokeswoman for Holland & Knight, said, "the firm’s position remains
unchanged. We’ve done nothing wrong and we intend to vigorously
defend this."
MacLeod, an Orlando partner
who represented Nadel, did not return calls for comment by deadline.
Holland & Knight
represented Nadel’s hedge funds and his Scoop Management since 2002
and received hundreds of thousands of dollars in legal fees,
according to the suit. The receiver may add other attorneys at the
firm to the suit in the future, said Guy Burns, a partner with
Johnson Pope Bokor Ruppel & Burns of Tampa, which filed the suit on
behalf of Wiand.
"Holland & Knight either
knew, should have known or was reckless in not knowing of Nadel’s
past conduct in illegally and improperly using money of third
parties entrusted to him," the complaint said. The firm "should have
recommended and insisted that normal and usual safeguards be put in
place so that a person with a history of improper use of client
funds would not be put in unrestricted and unsupervised charge of
hundreds of millions of dollars of assets belonging to the
investment funds."
The suit also alleges the
firm failed to advise the Securities and Exchange Commission that
Nadel was legally required to register and was operating illegally
as an unregistered investment adviser. Additionally, when Holland &
Knight learned funds were being illegally sold by a salesman, rather
than reporting the violation, the firm reached a settlement with the
salesman allowing him to receive additional payments under the guise
of "public relations," according to the suit.
"In exchange for aiding and
turning a blind eye to Nadel’s and Scoop Management’s activities,
Holland & Knight received hundreds of thousands of dollars [in]
legal fees," the suit states.
The lawsuit came days after
a similar lawsuit was filed in federal court by investors against
the New York law firm Proskauer Rose, which represented Stanford
Financial Group, before the discovery of an alleged $7 billion fraud
driven by sales of certificates of deposit by a Caribbean bank.
Experts anticipate more
such suits as fraud schemes crumble, leaving investors scrambling to
recover funds sometimes by seeking to place liability on deep-pocket
defendants such as law and accounting firms.
"In the aftermath of large
financial fraud cases or Ponzi schemes, investors and law
enforcement agencies are going to look for compensation and
wrongdoing from law firms, accounting shops, investment banks and
any related third parties who might be held accountable," said
Anthony Alfieri, a law professor who heads the Center for Ethics &
Public Service at the University of Miami. "This is unsurprising and
likely to continue."
Alfieri said the current
financial climate prompted him to offer a course on professional
liability and malpractice this fall.
The lawsuit against Holland
& Knight is the second for its representation of Nadel. Investors
led by Chicago investor Michael J. Sullivan filed a class action
suit against the law firm in Tampa federal court in March. The
allegations are similar to those in the suit by the receiver.
Nadel, 76, is being held in
a New York jail in lieu of $5 million bail. He is charged with one
count each of securities fraud and wire fraud. Each charge carries a
maximum penalty of 20 years in prison.
In January, Wiand, a
shareholder with Fowler White Boggs in Tampa, was appointed receiver
to try to recover some of the funds investors say they lost to Nadel
and associates. On Aug. 12, the court granted Wiand permission to
hire Johnson Pope Ruppel & Burns on a contingency basis to sue
Holland & Knight.
In addition to the
malpractice claim, the receivership alleges breach of fiduciary
duty, aiding and abetting breach of fiduciary duty and aiding and
abetting fraud.
Wiand said in an interview
that he filed suit in state court rather than federal court because
Nadel’s hedge funds were Florida entities.
When asked if it was a
difficult decision to sue a fellow law firm operating in the same
city, Wiand said, "No."
"I make the decision to
review the information that is available to me and determine whether
there are claims that can be pursued," he said. "If there are, I
have an obligation to pursue those claims. The decision to go after
them is a practical one as to whether it’s a worthwhile claim on
behalf of the receivership."
Guy Lewis, a former Miami
U.S. attorney and partner at Lewis Tein in Miami who frequently
serves as a receiver, said Holland & Knight likely has enough
malpractice insurance to cover the claims. However, the injury to
its reputation would be far more damaging than a financial loss.
"In a profession where your
judgment is key, you’ve already lost the battle," he said. "To be on
the wrong side of something like this is never a good thing.
Lawsuits against third
parties are becoming commonplace in fraud scandals.
"Law firms and lawyers are
the target du jour because they have deep pockets through their
malpractice carriers," Lewis added.
"It’s sad because 99
percent of the time they do their best. You try to dot your Is and
cross your Ts. There is no such thing as perfection in this
business."
Holland & Knight has more
than 1,000 attorneys in 23 cities and is one of the country’s
largest law firms, ranking 44th by revenue last year in a survey by
American Lawyer, a Daily Business Review affiliate.
NY
Mainstay Firm, Partner Accused
of Role in $7 Billion Fraud
By Leigh Jones The National
Law Journal
New York Lawyer
August 31, 2009
A group of investor clients
of Stanford Financial Group has filed a class action against
Proskauer Rose and partner Thomas V. Sjoblom.
The lawsuit, filed Aug. 27
in the U.S. District Court for the Northern District of Texas in
Dallas, alleges that the law firm and Sjoblom participated in a
massive investment fraud scheme that led to the intervention by the
U.S. Securities and Exchange Commission and the appointment of a
receiver for the investment firm.
The class action follows a
guilty plea by former Stanford Chief Financial Officer James Davis
made Aug. 27. In it, Davis appeared to implicate Stanford's outside
attorney, Sjoblom, in a conspiracy to thwart an investigation by the
SEC into Stanford's alleged fraud.
Sjoblom was assistant chief
litigation counsel in the SEC's enforcement division prior to
entering private practice.
Proskauer Rose issued a
statement that said the lawsuit was "legally flawed and factually
erroneous."
"There is no basis
whatsoever for any claim that Proskauer, which functioned as defense
counsel in a regulatory investigation, bears any responsibility for
the fraud allegedly inflicted upon investors," the firm said in the
statement.
A phone call to Sjoblom was
not immediately returned.
In February, the SEC
charged Stanford Financial Group, led by Allen Stanford, with
orchestrating a "massive ongoing fraud" that included selling some
$8 billion in high-yield certificates of deposit.
The class action, Troice
v. Proskauer Rose, claims that the law firm and Sjoblom aided
and abetted Stanford Financial's alleged fraud and that it conspired
with Stanford Financial. It claims that under Texas law Proskauer
Rose is liable for the $7 billion in total fraud losses.
Representing the plaintiffs
are Edward C. Snyder and Jesse R. Castillo of Castillo Snyder in San
Antonio.
"We know that one or two
people cannot carry out a massive fraud of this scale," Snyder said.
Attorney
Indicted for Taking Bribe to Coach Client to Lie
By Amanda Bronstad
The National Law Journal
New York Lawyer
August 25, 2009
A California lawyer who allegedly agreed to accept more than
$100,000 in bribes in exchange for coaching his client to lie to a
grand jury investigating immigration fraud has been indicted on
obstruction of justice charges.
Alfred N. Villalobos, who
recently moved from West Hills, Calif., to South Lake Tahoe, Calif.,
was indicted on Aug. 21. Federal prosecutors allege that Villalobos
coerced an attorney who represents the target of an immigration
fraud investigation to give him $107,000 in cash and other
compensation. In exchange, Villalobos promised that his client,
referred to in court documents as "Client One," would make false
statements to the federal prosecutor conducting the investigation,
as well as to the grand jury.
Prosecutors allege that
Villalobos accepted the first installment of the alleged bribe -
about $50,000 in cash - during an Aug. 4 meeting in Century City,
Calif. He was arrested later that day at the law office where the
meeting took place.
Reached in his own law
offices in West Hills, Villalobos, a solo practitioner, referred
calls to his attorney, Brian Sun, a partner in the Los Angeles
office of Jones Day. Sun's recent clients have included former
Orange County, Calif., Sheriff Mike Carona, once dubbed "America's
Sheriff" by broadcaster Larry King, but who was sentenced earlier
this year to 5 1/2 years in federal prison on one count of witness
tampering.
"We're severely
disappointed that the government would seek to bring charges and
engage in a rush to judgment," Sun said. "Villalobos would contend
that he was zealously representing his client in seeking payment for
lawfully earned wages she had been forced to rebate back to this guy
in order to retain her immigration status."
According to court
documents, the alleged bribe stemmed from a federal investigation of
an individual referred to in court documents as "Confidential
Witness One," or "CW1," who runs a religious organization in Los
Angeles. Federal law permits people involved in religious
occupations to obtain temporary work visas. According to the court
documents, CW1 allegedly falsified employment records for
individuals claiming to work at the religious organization.
Grand jury subpoenas had
been served and witnesses interviewed as of July 15, according to
court papers. One of the witnesses was Client One, who had obtained
a visa by claiming to be employed at the organization.
Federal prosecutors contend
that Villalobos contacted the attorney representing CW1, who was
cooperating with the FBI. During that meeting, Villalobos agreed
that if his client got paid $100,000 in cash, plus additional
compensation in the form of charitable donation receipts, his client
would tell federal prosecutors that the employment was legitimate.
Villalobos said his client would describe the cash, if necessary, as
payment from the settlement of a sexual harassment claim.
During the Aug. 4 meeting,
Villalobos accepted half the bribe, with the other half to be paid
after his client provided the false testimony, according to federal
prosecutors.
Villalobos will be
arraigned on Aug. 31.
Lawyer
Run Out of Town in Banking Scandal
Gets Partnership at Major Firm
By Susan Beck
The American Lawyer
New York Lawyer
August 11, 2009
Former UBS general counsel
David Aufhauser, who resigned last year following allegations of
involvement in the bank's alleged sale of auction-rate securities,
has rejoined his former firm Williams & Connolly.
Aufhauser - a former
managing director of the Swiss bank and general counsel of the US
Department of the Treasury - last October settled charges with New
York attorney general Andrew Cuomo that he engaged in insider
trading at UBS, agreeing to pay $6.5m.
As part of the settlement,
Aufhauser also agreed not to practise law in the state of New York
for two years. Williams & Connolly is based in Washington DC.
According to Cuomo's
statement announcing the settlement, Aufhauser's trading occurred
during the auction rate securities crisis. On December 14, 2007,
Aufhauser was on a train from New York to Washington DC, when he
read an email sent that day by UBS's chief risk officer. The message
described serious problems with UBS's auction rate securities
market. A few minutes later, Aufhauser sent an email to his
financial adviser and told him to sell all of his auction rate
securities, according to the statement.
The District of Columbia
Bar's Web site shows no disciplinary actions taken against Aufhauser.
He is not a member of the New York Bar.
Last November Raoul Weil,
the chairman and CEO of the global wealth management and business
banking division at UBS, was indicted by a federal grand jury on
charges that he helped US taxpayers avoid income taxes on assets in
overseas accounts.
Disbarred
NY Lawyer Busted for
Forging Ruling in Case He Never Filed
By The Associated Press
New York Lawyer
August 7, 2009
NEW YORK — A disbarred Long
Island attorney is accused of falsifying a court document promising
his client a $24,000 settlement.
Brian Holzberg, of Port
Washington, is charged with criminal possession of a forged
instrument. He faces up to seven years in prison if convicted.
Nassau County District
Attorney Kathleen Rice says the document contained the forged
signature of a Nassau Supreme Court judge.
She says Holzberg gave his
client numerous documents indicating the suit was filed. She says no
paperwork was filed.
The 53-year-old Holzberg
was supposed to help his client collect a debt from a business
associate.
He was disbarred in
December 2008 after a similar incident in nearby Suffolk County.
His lawyer, Richard Librett,
declined comment on Friday.
Lawyer
Gets Trashed, Winds Up Canned
By the Staff of The
National Law Journal
New York Lawyer
June 30, 2009
The
city attorney of Jeffersonville, Ind., resigned after police
released a photo of him passed out in the neighbor's trash.
Jeffersonville City Council
attorney Larry Wilder in a trash can after a night of drinking.
Photo: Jeffersonville City Police Department
Larry Wilder said he
had dinner and drinks with friends and was driven home in a client's
limousine but remembers little about what happened after that. A
neighbor found Wilder in the trash can the next day and called cops,
who helped him home.
The Courier-Journal of
Louisville, Ky., reported that one police officer snapped a photo
and another officer released it to the media.
Wilder would like to know
who took the picture. "If you're proud of what you've done, you
should come forward and take praise," he said.
Wire reports contributed t
this article.
Ex-NY
BigLaw Partner Really Going
to Prison for Faking Expense Reports
By the Staff of the New
York Law Journal
New York Lawyer
June 30, 2009
A former partner at Latham
& Watkins was sentenced Friday to 15 months in prison followed by
three years of supervised release and ordered to pay a $10,000 fine
and $350,000 in restitution to Latham for defrauding both clients
and his own firm.
Samuel A. Fishman, 51, of
Fairlawn, N.J., a mergers and acquisitions specialist in the firm's
New York office from 1993 to 2005, pleaded guilty to a single count
of mail fraud last year (NYLawyer,
March 31, 2008). He faced a maximum sentence of 20
years in prison.
Mr. Fishman admitted that
he had billed fraudulent expenses to clients by mischaracterizing
some non-reimbursable costs, such as local meals and parking, as
other reimbursable costs, such as photocopying and express mail, and
had inflated other, otherwise reimbursable expenses.
Mr. Fishman also defrauded
Latham by obtaining reimbursement from the firm for personal
expenses, such as hotel bills, by falsely claiming that they were
business expenses.
At his sentencing, Southern
District Judge Victor Marrera said that Mr. Fishman was "not just an
ordinary citizen or offender but an officer of the court." The judge
added that the lawyer had "betrayed by extensive criminal conduct"
the oath he took.
Mr. Fishman, who faces
disbarment, resigned from Latham when his conduct was discovered.
The firm reimbursed clients for improper expenses.
Lawyers
Stealing From Lawyers -
He Done a Bad, Bad Thing
By Douglas McCollam
The American Lawyer
June 26, 2009
The call that marked the
beginning of the end for James "Jamie" Perdigao came in late August
2004. The accounting department at Boomtown Casino, one of
Perdigao's biggest clients, had questions about a bill that the
attorney had recently submitted. Neither Perdigao, a partner at
Adams and Reese, the largest firm in New Orleans, nor his secretary
was in, so a temp routed the call to the firm's accounting
department, which could find no record of the matter in its system.
The firm asked Boomtown—a riverboat casino business—to fax over the
paperwork, and checked with other Adams and Reese lawyers whose time
appeared on the invoice. No one had a file number matching the one
on the bill. Further inspection showed that the invoice looked
"nonstandard" (as the firm would later term it), as did some other
billing statements to Perdigao's clients, which included many of the
country's top gaming companies.
On the Friday before Labor
Day, Perdigao, the firm's top-billing partner, was placed on
mandatory leave and told not to return to the office until further
notice. Despite that directive, over the long holiday weekend,
security cameras at the 51-story office tower in downtown New
Orleans where Adams and Reese is headquartered captured Perdigao
carting off about 60 boxes of files. On the Tuesday after his Labor
Day haul, Perdigao faxed in his resignation and admitted that he had
been misappropriating funds. In the weeks that followed, the scale
of his theft remained unclear. Initially, it seemed it might just be
around $1 million. But after a series of meetings between firm
management and Perdigao's lawyer, he agreed to return about $9
million to the firm. About a month after that, the U.S. attorney's
office and the Federal Bureau of Investigation, which had been
brought into the case by Adams and Reese, discovered that, even as
Perdigao was negotiating with the firm following his resignation, he
had transferred an additional $19 million to a branch of Credit
Suisse Group in Zurich. The FBI arrested Perdigao on Oct. 16, 2004.
At that time, agents found about $25,000 in cash and two cashier's
checks totaling nearly $1.2 million in the trunk of his car. (He was
released on $2 million bail.)
After a long and often
bitter four-year battle with the firm and federal prosecutors,
Perdigao finally pled guilty in the fall of 2008 to 30 counts of
bank fraud, money laundering and tax evasion. Perdigao further
admitted making $23 million worth of unauthorized withdrawals from
the firm between 1991 and October 2004, according to a summary of
the case against him that he signed. As part of his plea agreement,
Perdigao agreed to pay back about $23.5 million in restitution,
nearly half of that amount to his former firm. (The other monies are
for the Internal Revenue Service, the Louisiana Department of
Revenue and Boomtown's parent company, Pinnacle Entertainment, Inc.
An additional $6 million the feds seized has so far gone unclaimed.)
In a statement, Adams and Reese labeled Perdigao's actions "among
the most egregious of any lawyer who has ever been criminally
prosecuted in our nation's history," and the U.S. attorney
prosecuting the case called him "a poster boy for all corrupt
attorneys."
At Perdigao's sentencing in
March, federal district court judge Eldon Fallon fixed the wayward
lawyer with a reproving eye. "Mr. Perdigao, every day I see
defendants with no education, no family, no letters [asking the
court for leniency], because there is no one to write for them, no
opportunity, no job, very little to lose. You don't fall into that
category," Fallon said. Below him, Perdigao, manacled hand and foot
and clad in an orange jump suit, slumped. His lawyer, Charles
Griffin, a solo practitioner in New Orleans, caught him around the
waist. Fallon continued: "You are a lawyer, an officer of the court,
you took an oath to follow the law and the Constitution of this
country. You let yourself down, your family down, let society down,
let the country down. This was not aberrant behavior. For a decade
you did this." And with that, the judge gave Jamie Perdigao, Phi
Beta Kappa key holder, 15 years and eight months in prison, with no
possibility of parole.
At first glance, Perdigao
might seem like just another high-living rogue of our new gilded
age. (Through his lawyer, Perdigao declined to be interviewed for
this story.) But in interviews with almost two dozen colleagues,
classmates and family friends, the picture that emerges is hardly
that of a callous huckster. To the contrary, Perdigao is often
described by those who know him as a "nice guy," "personable" and
"considerate," hardly the adjectives usually invoked when describing
a hard-driving attorney who routinely billed 3,000 hours a year. In
contrast to the lifestyle one might suppose Perdigao lived, he was a
notorious miser—wearing rumpled suits, scuffed shoes and driving a
beat-up Mitsubishi sedan that doubled as a cluttered rolling office.
Though he was paid more than $300,000 a year as a partner at Adams
and Reese, at the time of his arrest he still lived in the same
$500-a-month rental apartment he moved into just after law school.
"He came across as something of a Boy Scout," says William Scheffler,
a New Orleans attorney who worked with Perdigao on litigation
matters as outside counsel. "He was very polite, very hardworking.
He was really the epitome of what you'd want your son to grow up to
be." Perhaps it was unsurprising, then, that despite the energy and
ingenuity Perdigao put into stealing millions of dollars from his
clients and partners, he was in a good position to pay them back. It
turned out that he'd never spent a penny and was able to turn it all
over to the U.S. Marshal's Service to be placed in the registry of
the court.
Perdigao, 47, grew up in
New Orleans. He graduated with honors from Tulane University and
Tulane Law School before joining Adams and Reese as a first-year
associate in 1987. He arrived at the firm at an auspicious time.
Long known as a no-frills insurance defense, admiralty and product
liability firm, Adams and Reese was on the cusp of a rapid
expansion. Within five years it opened offices in Washington and
Mobile. Two years later it established a branch in Houston, and
later, offices in Jackson, Miss., and Birmingham. Part of this
growth was led by current managing partner Charles "Chuck" Adams Jr.
(no relation to the firm's name partner), who brought in a host of
big clients, including telecom giant WorldCom Inc., when he joined
the firm in 1996 from Jackson-based Brunini, Grantham, Grower &
Hewes. Last year Adams and Reese had 233 attorneys and revenue of
$103 million.
Within New Orleans legal
circles, the term frequently used to describe Adams and Reese is
"entrepreneurial," that is, a firm where the partners often
maintained a variety of outside business ventures, including
ownership stakes in local sports teams and casinos. The firm is also
known as very politically connected. Its blend of dealmaking and
politics, in a state where politics is often a dirty business,
fosters some ambivalence about the firm in the more buttoned-down
precincts of New Orleans's legal community. "I always thought of A
and R as a little schizophrenic," says one former managing partner
of a big competing firm in town. "One set of guys would have fit in
at [other prominent New Orleans firms] Liskow & Lewis, Jones Walker,
and Phelps Dunbar. But another set were more of the wheeler-dealer
... political types."
One practice that meshed
well with the firm's mix of business and politics was gaming law. In
the early 1990s, Louisiana passed a series of measures allowing the
operation of video poker machines, riverboat casinos and other forms
of legalized gambling. One of Adams and Reese's longtime clients,
Robert Guidry—a local businessman with strong political ties to
then-Gov. Edwin Edwards—decided to bid on one of the coveted
licenses to operate a riverboat casino. Guidry retained Adams and
Reese partner Robert Vosbein to assist him on the deal.
To help advise Guidry on
gaming issues, Vosbein tapped Perdigao, then a young partner at the
firm. Perdigao quickly built a reputation as one of the top legal
experts in the field. Within Adams and Reese, he was seen as a
rising star with a prodigious work ethic. Though not an early riser,
Perdigao routinely worked until after 10 p.m. and almost every
weekend. He regularly exceeded his annual billing quota and, as his
gaming practice grew to include industry heavyweights like Pinnacle,
Harrah's Entertainment Inc. and Bally Gaming International Inc., he
became Adams and Reese's top-billing lawyer for several years in a
row. According to attorneys who worked with him, Perdigao was viewed
as very bright and well-liked, but he had a reputation as a loner
who was intensely focused on his work and kept his social life to
himself.
In retrospect, Perdigao's
profile as a brilliant soloist takes on a more ominous cast. Even
before he made partner, according to federal prosecutors and court
filings, Perdigao began to engage in fraudulent billing. At first he
simply added time to legitimate bills. Later, Perdigao fashioned
dummy bills to look like legitimate Adams and Reese invoices and
sent them out with special return envelopes addressed to him that he
personally collected from the firm's mail room. These bills were
usually for no more than $15,000 and included time attributed to
other lawyers at the firm. When the checks arrived, he would deposit
them in the firm's trust account (which prosecutors say was not
closely audited at the time). Then he would have checks from that
account cut to one of several outside entities he controlled, such
as Atlas Development Corp. and Capital Services Group. These
companies were sham businesses created to help Perdigao launder the
proceeds from his billing operation, according to federal
investigators. Later, as Perdigao became more brazen, he would
intercept checks from clients and deposit them directly into his
personal accounts, stamping "Adams and Reese" on the back as an
endorsement. The firm has sued at least one bank, JP Morgan Chase &
Co., for allowing Perdigao to do this. A lawyer for the bank
declined to comment except to say that his client denies any
liability.
Why didn't the clients
catch on? Robert Murphy, a partner with New Orleans-based Murphy,
Rogers, Sloss & Gambel who is representing Pinnacle in a suit
against Adams and Reese, says that even though Perdigao submitted
$5.2 million in fictitious or inflated bills to the company between
1999 and 2004, "no bell went off" in his client's accounting system.
Murphy says Perdigao and the firm did so much legitimate work for
Pinnacle that the extra billing didn't seem out of the ordinary.
Perdigao alone was billing the company about 1,000 hours a year and
did about $2.5 million worth of legitimate work during those same
five years. "There were so many bills, it just didn't jump out,"
says Murphy. He adds that Perdigao's stature in the gaming world
also bolstered the scheme: "He had our confidence. He was the top
guy in gaming law. I know that the Louisiana Gaming Control Board
used to call him up when they had questions about how something
worked." In the end, the court granted Pinnacle $6.5 million in
restitution from Perdigao. Pinnacle's suit against Adams and Reese
has yet to be dismissed pending receipt of that payment.
Among aficionados of the
Perdigao case in New Orleans (and there are many), there is frank
skepticism that one lawyer, however talented, could have pulled off
a billing scheme involving almost $30 million at a medium-sized
regional firm without someone at the firm getting wise. (No charges
have been brought against anyone else at the firm.)
Managing partner Chuck
Adams declined to be interviewed about the case, but he said in an
e-mail that Perdigao's "elaborate crimes unexpectedly evaded
standard safeguards that law firms routinely employ and that
otherwise have served us well for decades." Speculation about a
wider conspiracy in the case was fueled, in part, because after he
was arrested, Perdigao signed a cooperation agreement and was
debriefed by federal law enforcement officials for more than two
years before being formally indicted. That was partly due to exigent
circumstances, says U.S. Attorney James Letten, such as the
disruption caused by Hurricane Katrina in 2005. But partly it was
because Perdigao had some fantastic tales to tell about his former
law firm. He told prosecutors that Adams and Reese partners had
buried documents to obstruct the government's investigation into the
administration of former New Orleans mayor (and Adams and Reese
partner) Marc Morial, who now heads the National Urban League.
(Though members of his administration have gone to jail, Morial has
never been charged with wrongdoing.) Perdigao told prosecutors that
Chuck Adams had helped his client Bernard Ebbers, the now-jailed
former CEO of WorldCom, obtain fraudulent loans by disguising the
true state of Ebbers's personal finances. All of these
allegations—and many, many more—found their way into a voluminous
Racketeer Influenced and Corrupt Organizations suit Perdigao filed
against the firm and eight of its top partners in May 2008. "It read
like a damn Grisham novel," one former Adams and Reese lawyer said
of the lawsuit's explosive allegations. Indeed it did—and was about
as popular around New Orleans when it was filed, with Perdigao
casting himself as the lone voice of virtue, forever battling the
dark designs of his nefarious partners.
The problem, according to
federal prosecutors, was that none of Perdigao's stories checked
out. "We talked, but we came up goose eggs on his information," says
prosecutor James Mann. Another prosecutor in the office even
referred to Perdigao as a "pathological liar." (Along with Mann and
Letten, other prosecutors on the case included Sal Perricone, Brian
Klebba and Mimi Nguyen.)
Even though Letten and his
team didn't find Perdigao's allegations against the firm credible,
the charges nevertheless seemed to contain oddly detailed knowledge
of certain meetings between prosecutors and Adams and Reese. Mann
went so far as to suggest to the firm's leaders that they had a leak
in their shop. Adams and Reese had similar concerns. For example,
they found it odd that the only common thread among the eight
partners named in Perdigao's civil suit was that they were the ones
assigned to handle the investigation of Perdigao's billing, and
liaise with the government. How could he know this?
Eventually, an explanation
surfaced. On Oct. 11, 2008, about six weeks before Perdigao's
criminal trial was to begin, David Erwin, then the chief information
officer of Adams and Reese, was reviewing computer user logs when he
noticed some unusual activity. Someone using Perdigao's user name
had tried to log in to the firm's network in the early morning
hours. Though the attempt had been unsuccessful (Perdigao's name had
been deleted from the system), one minute later someone from the
same IP address had successfully logged in, using the name of a
lawyer in the firm's Baton Rouge office. Curious, Erwin called the
lawyer and asked if he had been on the network the night before. He
said he had not. The IP address used by the trespasser was
ultimately traced to the home of Perdigao's longtime girlfriend,
where he had been staying. A search of her home by the FBI turned up
two laptops belonging to Adams and Reese, as well as information
stolen from the files of an Adams and Reese partner. In all, it
turned out that Perdigao had hacked into the firm's computer network
more than 400 times since his initial October 2004 arrest. Perdigao
was rearrested, and his $2 million bail (secured by his parents'
homes) was revoked. Prosecutors determined that, in addition to
stealing information related to his case and personal information
about firm lawyers and staffers, Perdigao was attempting to create a
false paper trail in the firm's system that would have authorized
his billing activities, which he could then obtain in discovery.
With his rearrest and the
revocation of his bond, all resistance within Perdigao seemed to
crumble. Though he had previously rejected a plea deal (against the
advice of his lawyers and others) that would have given him a
maximum of five years in prison for one count of mail fraud, he now
agreed to plead guilty to 30 counts of a 61-count indictment.
As part of the sentencing
process, family and friends (including former Republican
congressional leader-turned-lobbyist Bob Livingston) wrote to Judge
Fallon asking for leniency. In the letters, those closest to
Perdigao struggle to reconcile the good man they knew with the man
facing the prospect of spending years behind bars. Many noted that
his parents' bitter divorce while he was a teenager, and a
subsequent seven-year estrangement from his mother, had a profound
impact on him. His father, H. Gunther Perdigao, a New Orleans
psychiatrist, described how after the divorce Jamie became much more
of a loner, and how, despite the family's wealth, he began shopping
for clothes at the Salvation Army because he was sure he would
become destitute. Jamie, his father wrote, developed "a dark side"
and would carefully manage information, "never telling any one
person everything ... he began to lie so no one knew exactly what he
was doing." His son, Dr. Perdigao wrote, never had any intention of
spending the money he stole, comparing him to a "homeless man found
dead with a million dollars under his mattress."
Perhaps the keenest
insights came from Perdigao himself in a letter he wrote to Judge
Fallon. "I am not sure what is wrong with my judgment and
decision-making process, but it relates somehow to the fact that I
don't have much balance in my life," he wrote, noting that at firm
Christmas parties he'd been given a blanket and pillow for his
office. "My life was my work. On most nights for many years, I left
the office after the night cleaning crew. I never bought a house,
never married, never had children." His years as a corporate defense
lawyer, he noted, had taught him how "to deflect the focus of the
charges and allegations against my clients by raising all sorts of
misdirections, counterpoints and counterclaims, which did not
necessarily have any basis in fact. Unfortunately, trying to be my
own lawyer, I used this same approach to try to deflect the charges
against me."
As for what his ultimate
plans were for the money, or why exactly he stole it, Perdigao
offered no clue. Nor do those around him claim any special insight.
As one of his defense lawyers put it: "I'm no closer to
understanding that than I was in the beginning."
Douglas McCollam
is a New Orleans-based freelance writer, who contributes to The
American Lawyer.
Ark.
Lawyer Expected to Plead Guilty
in Alleged $9M Escrow Shortfall
By Debra Cassens Weiss
ABA Journal
May 19, 2009
Prominent Arkansas plaintiffs securities lawyer Gene Cauley is
expected to plead guilty for failing to pay clients $9.3 million in
settlement funds he was supposed to be holding as their escrow
agent.
Cauley will plead guilty to
wire fraud and criminal contempt for failing to safely hold the
money, the Wall Street Journal
Law Blog reports. The blog
says the expected plea was revealed in an Arkansas Supreme Court
filing.
Cauley’s lawyer,
John Wesley Hall, told the
Law Blog his client is expected to file the guilty plea in June.
Hall said the missing money "could be in all kinds of things," such
as real estate and business ventures. So far, Hall said, he has
recovered about $500,000 and he hopes to find the other missing
funds.
Cauley
revealed to co-counsel last month
that he can’t produce the money. It was supposed to be held in U.S.
Treasury bonds.
The Law Blog cites this
explanation in Cauley's court filing: "I now understand I have been
faced with issues of depression and am seeking appropriate help for
them. I do not offer this situation as any form of defense for my
actions detailed here. I accept full responsibility for my actions."
Foreign
Trusts Allege N.Y. Lawyer
'Shamelessly Looted' Millions From Bank Accounts
Pamela A. MacLean
The National Law Journal
April 14, 2009
The owners of five
Liechtenstein-based trusts have sued a New York lawyer with 60 years
experience in international estate planning, alleging he
"shamelessly looted" more than $15 million from the clients for
longer than a decade.
Winthrop Ross Munyan, most
recently associated with a small Rye, N.Y.-based trusts and estates
firm, Riad & Associates, was accused of fraud, unjust enrichment,
conversion and breach of fiduciary duty in a state court suit filed
on April 9. It alleged he embezzled millions of dollars from the
offshore companies between 1997 and 2007.
Munyan left the Riad firm
in 2008, according to Maged Riad, the managing partner.
"He has no relations with
the firm, Riad said. "He was acting as trustee for the foreign
trusts for 30 or 40 years. I thought I saw something improper, and I
called the trustees and brought it to their attention," Riad said.
"That was his [Munyan's] last day with the firm," he said.
Named in the suit along
with Munyan are Riad & Associates; Dr. Peter Ritter; Dr. Guido
Meier; Peter Meyer; Pictet & Cie, a private bank in Geneva; and
Kinbrace Corp., a Liberian flow-through entity allegedly operated on
behalf of Munyan by Ritter.
Munyan could not be reached
for comment. None of the other named defendants could be reached for
comment.
Riad said he has not yet
seen the lawsuit but denies all allegations related to him and the
firm.
Michael S. Feldberg of
Allen & Overy in New York
represents the plaintiffs. He alleged that Munyan "looted" money
from the bank accounts he was meant to manage "all while living the
high life ... often flying on the Concorde and maintaining an
apartment in Paris and hotel suites in London."
"It is unclear whether
Munyan planned his scheme from the outset or if he slithered into it
as the opportunity arise," Feldberg wrote in the complaint.
The suit alleges that funds
were embezzled between January 1997 and December 2007. The five
plaintiffs, Establishment Finapart, Establishment Figest,
Establishment Gour-Sande, Establishment Elatia and Establishment
Elatia, accuse Munyan of "using a Byzantine system of trusts and
offshore companies for his own personal use." It alleges he diverted
assets from the five Liechtenstein trusts to make payments to Riad's
accounts and to pay Kinbrace for his personal use, and that he
diverted plaintiffs' funds to pay his American Express accounts.
In Establishment
Finapart v. Munyan, No. 0960110 (New York Co., N.Y., Sup. Ct.),
Feldberg alleges that Ritter and Meier were directors on the trusts'
board of directors and had an obligation to prepare annual financial
statements. Instead, "Ritter and Meier gave Munyan the keys to the
establishments and, by extension, the assets they controlled, and
turned a blind eye as Munyan drained the establishments' coffers."
Ritter is described as
co-founder of a Liechtenstein wealth management company, Kaiser
Ritter Partner Holding, and Meier as a Liechtenstein lawyer.
The suit states that Munyan
resigned as trust protector in December 2007. In addition, it
alleges that Maged Riad contacted a lawyer for the trust
beneficiaries in March 2008 to provide a list of documents in Riad's
possession related to the trusts. "Maged Riad subsequently offered
to make those documents available subject to an exorbitant fee," the
suit states.
Ex-Partner
Gets 15 Years for
Ripping Off Millions From His Firm
By Michael Kunzelman
The Associated Press
New York Lawyer
March 27, 2009
A former attorney who pleaded guilty to stealing millions of dollars
from a prominent New Orleans law firm and a casino operator he once
represented was sentenced Wednesday to just over 15 years in prison
and ordered to repay about $23 million.
Former Adams and Reese
partner James Perdigao, 46, pleaded guilty in October to charges
that included fraud and money laundering. He briefly apologized
before U.S. District Judge Eldon Fallon sentenced him.
Fallon also ordered
Perdigao to pay restitution of about $11 million to his former law
firm, about $6 million to casino company Pinnacle Entertainment,
about $5 million to the Internal Revenue Service and about $768,000
to the Louisiana Department of Revenue.
Fallon scolded Perdigao
before he handed down the sentence.
"You let yourself down, you
let your family down, you let your profession down, and you let your
country down," the judge said. "It's not aberrant behavior. For a
decade you did this, not just one time."
Perdigao expressed remorse
in a statement filed by U.S. Attorney Jim Letten's office on the eve
of the sentencing hearing. In the statement, Perdigao said he
regrets making "uncorroborated allegations" about Letten and other
prosecutors "based entirely on rumor and hearsay."
Perdigao had accused
Letten's office of failing to act on information he gave them about
other criminal activity because his allegations involved a key
witness against former Gov. Edwin Edwards, whom Letten prosecuted
for corruption.
He also had dropped a
lawsuit that accused his former Adams and Reese colleagues of
involvement in a wide range of fraud and bribery schemes, including
the WorldCom scandal.
"His crimes were
reprehensible," Letten said of Perdigao. "The man abused a position
of trust and stole about $30 million from his clients and his law
firm."
Perdigao, who resigned from
Adams and Reese in September 2004, was awaiting trial in the fraud
case last year when a grand jury indicted him on new charges that he
hacked into his former firm's computer system and stole confidential
correspondence between prosecutors and the firm.
"This man's crimes were
about as broad as any economic crimes could be," Letten said.
Lawyer
Convicted of Mortgage Fraud
By Mark Hamblett
New York Law Journal
New York Lawyer
February 9, 2009
The bogus world of a Brooklyn attorney who built a profitable
business on title insurance while earning high fees on real estate
closings came crashing down on Friday as a federal jury convicted
him in a subprime mortgage scam.
Alexander M. Kaplan, 34, of Lerner & Kaplan, sat stoically at the
defense table while a jury of 10 women and two men pronounced him
guilty on all 18 counts in an indictment charging him with
conspiracy and bank, mail and wire fraud.
Mr. Kaplan, who testified in his own defense, is scheduled to be
sentenced May 1 by Southern District Judge Richard Holwell.
The verdict was a victory for Assistant U.S. Attorneys Avi Weitzman
and Jonathan New, who persuaded the jury that Mr. Kaplan played a
pivotal role in a wide-ranging conspiracy that ripped off lenders of
millions of dollars.
Read the indictment of Mr. Kaplan.
Mr. Kaplan's role, they proved, was to keep lenders in the dark by
representing the bank, the buyer and the seller in transactions
where mortgage brokers, particularly lead actor Alexander Lipkin,
would use the identities of innocent straw buyers to obtain huge
loans on properties. Sometimes, they would flip the properties
within weeks using even more phony documents.
Mr. Weitzman told the jury during summations in the two-week trial
that Mr. Kaplan was "a liar and fraudster," who "engaged in a
massive fraud that was perpetrated by all these people.
"He did so by telling lies to banks over and over again. He lied
about who the real purchasers were and he lied about the amount of
money he disbursed from the loan proceeds," Mr. Weitzman said. "His
lies were all intended to protect his criminal partners and to make
sure the real estate transactions looked legitimate."
Mr. Kaplan was one of 27 people indicted in the conspiracy. All of
the other defendants except one have pleaded guilty, including Mr.
Lipkin who admitted to guilt in two schemes in June 2008. He has yet
to be sentenced.
The first was part of a foreclosure "rescue scheme" whereby Mr.
Lipkin induced distressed homeowners to transfer the deeds in their
homes to straw buyers who would supposedly "save" their homes and
promise to return the deed to the homeowners.
In the end, Mr. Lipkin and his cohorts, using the straw buyers,
would take out millions of dollars in loans on the property. They
would then default on those loans, leaving both the banks and the
straw buyers damaged.
The second scheme concerned subprime mortgages. Mr. Lipkin and
others submitted applications for millions of dollars to lenders
using fraudulent documents, a scheme that cost the lenders more than
$4.5 million.
Mr. Kaplan, the prosecutors said, was one of several dirty lawyers
who helped facilitate these plots, including the signature scam in
the indictment: the purchase of a block of apartments at 243 West
98th Street in Manhattan where Mr. Lipkin and several others,
including Mr. Kaplan, never disclosed to the bank that the units
were occupied and under rent control. Some tenants were paying as
little as $393 a month.
Mr. Kaplan made between $850 to $1,100 in fees per closing and much
more in title fees, Mr. Weitzman said, and he made "tens of
thousands" in fees on the West 98th Street deal.
An Uphill Battle
Defense lawyer Diarmuid White of White & White in Manhattan, was
faced with an uphill battle. It did not help when his client took
the witness stand and was unable to remember key details, claimed
paralegals handled a good deal of the work, and conceded he did not
file income taxes in 2006 and then blamed his accountant.
Mr. White's strategy was to portray Mr. Kaplan as an ambitious young
attorney who was trying to build a "mill" and who let things get
away from him through sloppy business practices and mismanagement.
"No question he did not act as diligently as he should have," Mr.
White told the jury during opening statements, asking why Mr. Kaplan
"would risk everything - his law career, his business, everything,
to willingly participate in such a conspiracy?"
Mr. Kaplan, admitted to the bar in 1999 after graduating from New
York Law School, started with a small firm practicing immigration,
matrimonial and real estate law. After working for another real
estate firm in Brooklyn, he and partner Garry Lerner, who is his
cousin, started their own practice focusing on real estate.
Mr. Kaplan got his foot in the door by becoming the closing agent
for one bank. He soon became the agent for another six banks and, at
the peak of his practice, did closings for as many as 60 banks.
By 2004, he was doing as many as 10 closings a day, employing teams
of paralegals to handle most of the transactions.
In the same building as Lerner & Kaplan on E. 12th Street in
Brooklyn, Mr. Kaplan built a thriving 10-employee title company,
Executive Settlement Services.
"Why send this out? Why not have a title company that I control and
all the fees that it generates?" Mr. White said to the jury during
opening arguments. "Now that's good business, but it's not so good
for a lawyer because there is a potential conflict of interest."
There were ethical lapses, he said, and Mr. Kaplan "spread himself
too thin" because "he couldn't possibly oversee every transaction."
In his summation, Mr. White did not mince words, saying Lerner &
Kaplan was "run poorly, not well supervised, not managed properly."
"There was too much emphasis on growing the business," he said. "The
practice was a mess."
Mr. White said that Mr. Lipkin, "the ringleader," lied to everyone
along the way, the banks, the straw buyers, the other defendants and
Mr. Kaplan, whom he played for a dummy.
"He was a fool, a total fool," Mr. White said. "He was ripe for
Lipkin to manipulate and that's what happened. He was duped."
But Mr. Weitzman and Mr. New convinced the jury that it was
impossible for Mr. Kaplan to sign off on one document after another
on the closings, particularly the West 98th Street property, without
knowing, or at least consciously avoiding, the truth.
Mr. Weitzman compared Mr. Kaplan to the three monkeys who hear no
evil, see no evil and speak no evil.
"Essentially, Kaplan's defense is 'I didn't see nothing. I didn't
hear nothing,'" he said.
Mr. Kaplan faces a potential sentence of upwards of 30 years and a
fine of $1 million, but is expected to receive much less under the
U.S. Sentencing Guidelines.
Attorney's Office Shut Down
for
Alleged Illegal Practice of Law
By Amanda Bronstad
The National Law Journal
New York Lawyer
February 6, 2009
LOS ANGELES — Prosecutors
at the State Bar of California, responding to a tip from the Orange
County District Attorney's Office, have shut down a satellite office
of Walter S. Martinez, a solo practitioner in Upland, Calif., on the
ground that two office administrators were allegedly illegally
practicing law.
Earlier this week, the
Orange County District Attorney's Office charged a dozen people,
most of them chiropractors, as part of an ongoing sting operation
targeting illegal patient referral and insurance overbilling
schemes. Operation K-Fraud, which stands for "Knockout Fraudulent
Attorneys and Unscrupulous Doctors," targets a scheme in which
doctors have allegedly agreed to pay 30% of their patient billings
to law office administrators in exchange for those patients'
referrals.
This week's defendants
include eight chiropractors, one attorney and three administrative
staff members. The attorney is David Gonzalez of the Law Offices of
David Gonzalez, in Placentia, Calif. Another defendant, a law office
administrator named Lisa Marie Tran, worked in Martinez's Orange
County office, which is in Westminster, Calif.
Brooke Schafer, deputy
trial counsel at the State Bar, said most actions against
nonattorneys do not involve related criminal investigations. "In the
course of their investigation, one little part of it was this
satellite office of Mr. Martinez in Westminster," he said. "It
appeared to them that it was being run by nonattorney staff and so
they let us know and brought us in on it."
Earlier this week, an
Orange County Superior Court judge granted the State Bar authority
to take over Martinez's Westminster satellite law office, which also
goes by L&M Legal Services. Two office administrators were ordered
to cease and desist from practicing law.
According to the State Bar,
Martinez had little or no contact with many of his clients from the
office, which handled primarily personal injury claims. Schafer said
the State Bar has taken files from the office and returned them to
clients. He declined to say whether the State Bar intended to
investigate Martinez, who has not been charged.
Martinez did not return a
call for comment.
Famed
Civil Rights Lawyer Faces Bar Charges
By Mike McKee
The Recorder
New York Lawyer
December 4, 2008
SAN FRANCISCO - SAN
FRANCISCO — Nationally known San Francisco civil rights lawyer
Philip Kay has won millions of dollars for clients in discrimination
and sexual harassment cases over the past 25 years.
But he might be facing his
biggest fight with State Bar prosecutors, who have charged him with
turning two cases before three San Diego judges into three-ring
circuses by repeatedly impugning court orders and caustically
accusing the judges of misconduct in front of jurors.
Prosecutors also claim Kay
entered into an illegal fee-splitting agreement in his most
high-profile case — a sexual harassment suit against mega-law firm
Baker & McKenzie that in 1994 resulted in a $6.9 million San
Francisco jury award for his client, former legal secretary Rena
Weeks. (The judgment was later reduced to $3.5 million.)
Kay's motion to have the
charges dismissed was rejected Tuesday by the State Bar Court's
review department.
State Bar Supervising Trial
Counsel Allen Blumenthal, who's prosecuting Kay, wouldn't say
Wednesday what punishment he intends to seek, but he called the
charges "serious."
NY Lawyer
Indicted for Ripping Off
$735,000 in Real Estate Deal
By Noeleen G. Walder
New York Law Journal
New York Lawyer
December 4, 2008
A Manhattan attorney was indicted yesterday for allegedly stealing
$735,000 he received from a real estate transaction.
According to the Manhattan
District Attorney's Office, James John Armenakis, 65, and his law
firm, Armenakis & Armenakis, received a deposit in October 2007 of
$735,000 in connection with representing the seller of a $7.35
million condominium at 285 Lafayette St. While Mr. Armenakis
initially deposited the funds into his attorney escrow account, he
failed to show up on the day the transaction was scheduled to close
and did not return the money to the buyer.
Mr. Armenakis, who
allegedly spent the deposit on personal items, was indicted on
charges of second-degree grand larceny and second-degree criminal
possession of stolen property, both class C felonies punishable by
up to 15 years in prison. In addition, Mr. Armenakis faces
second-degree larceny charges for allegedly failing to pay some
$98,000 in withholding taxes to the New York State Department of
Taxation and Finance and under-reporting his personal income from
2002 to 2007.
Mr. Armenakis pleaded not
guilty and posted a $75,000 bond.
Lawyers
Who Made Job Offer to the Judge
on Their Case Sued by Opposing Party
Charles Toutant
New Jersey Law Journal
New York Lawyer
November 12, 2008
Lawyers who engaged a retiring judge in discussions about a future
business relationship while he was ruling in one of their cases have
been sued for damages -- specifically, the other party's attorney
fees.
The suit, just filed in
Morris County, N.J., is the aftermath of the New Jersey Supreme
Court's September ruling in Denike v. Cupo, A-61-07, which
upended a commercial suit judgment based on a perceived appearance
of impropriety.
The justices found Gerald
Escala, a Bergen County Superior Court judge nearing retirement,
created an appearance of impropriety by talking about a job offer
with a Hackensack, N.J., law firm while winding up the dispute, in
which the firm represented one of the parties.
Now the other party,
Michael Cupo, is suing Herten, Burstein, Sheridan, Cevasco,
Bottinelli, Litt & Harz and partner Thomas Herten, claiming the
firm's actions amounted to professional negligence and have injured
him in the pocketbook.
"Cupo spent over $250,000
to have his case against Lawrence Denike tried to conclusion and now
as a direct result of the actions of Thomas J. Herten, Esq., and the
Defendant law firm of Herten, Burstein, Sheridan, Cevasco,
Bottinelli, Litt & Harz, LLC, he must spend additional funds for the
retrial," reads the complaint in Cupo v. Herten.
The suit advances a
third-party legal malpractice cause of action, for which Cupo's
lawyer says there is ample precedent. "Cupo is a third-party
beneficiary to the contract between Denike and Herten," says his
attorney, Jeffrey Pocaro, a Fanwood, N.J., solo. "Herten's got an
obligation not to injure my client."
Herten's job offer came in
the final chapter of a contentious, three-year dispute between Cupo
and Denike, founders of a mortgage company who decided to go their
separate ways.
According to court papers,
Escala issued a final decision in the underlying case on Jan. 23,
2006, ordering Denike to pay Cupo the $731,682. The next day, Herten
visited the judge's chambers, inquired about his retirement plans
and asked whether he would consider joining Herten Berstein in some
capacity. Escala outlined the type of firm relationship he was
contemplating. Herten discussed the proposed relationship with his
partners on Jan. 25 and told Escala they would need a few days to
analyze it.
On Jan. 30, Herten received
from Escala by mail an order with terms that seemed inconsistent
with the judge's prior decision. Herten submitted an alternate form
of order, which the judge signed on Feb. 1. The same day, Herten
told Escala the firm's analysis of the proposed relationship was not
yet completed.
On Feb. 3, Herten visited
Escala in chambers and the two agreed to a relationship in
principle, with the financial terms to be worked out later. That
night, Escala announced at a retirement dinner, attended by his
former law clerks and staff, that he was joining the firm. He came
aboard Feb. 27.
The Appellate Division said
the episode did not amount to reversible error. But the Supreme
Court ordered a new trial, finding that the job negotiations between
a judge and an attorney appearing before that judge cast doubt on
the integrity of the judicial process. Judges may not talk about
jobs with parties or attorneys in a matter in which they are
participating, and, if offered a job by parties in a matter before
them, should halt the conversation immediately and disclose on the
record what happened, the court said.
The new suit is seeking
compensatory and punitive damages, including reimbursement for legal
bills from the original trial. "It's wasted money now," says Pocaro.
The suit also seeks legal
fees for the appeals process just completed and for the prospective
retrial. What's more, if Cupo's recovery at retrial for his share of
the business is less than the $731,682 he was awarded in the first
trial, he will seek compensation from Herten's firm for the
difference.
Cupo's suit includes counts
of malpractice, deprivation of right to fair trial and tortious
interference with business advantage. Pocaro says there is a common
law right to bring a malpractice claim against an adversary's lawyer
based on the Supreme Court's holding in Petrillo v. Bachenburg,
139 N.J. 472 (1995). There, the buyer in a real estate transaction
sought damages from the seller's attorney for providing incomplete
information about percolation tests on the property. The Petrillo
court held that the seller's attorney had a fiduciary duty of care
to the buyer and that such duty may exist "when the attorney knew,
or should know, that nonclients will rely on the attorney's
representations."
Pocaro says, "It's a
question of foreseeability. Could Herten foresee his offering the
judge a job before the judge signed the final orders would result in
a retrial? The answer is yes."
Pocaro also intends to rely
on the Appellate Division holding in Finderne Management Co. v.
Barrett, 355 N.J. Super. 197 (2002), that "generally, to recover
for an economic loss resulting from negligence by one furnishing a
service, a "direct contractual relationship between the parties"
must exist or the injured party must be a known "beneficiary of the
defendant's undertaking."
Divorce
lawyer Raoul Felder Sues Alliance
Bernstein Over Lost $200,000
By Jose Martinez
Daily News
October 21st 2008
Now it's the divorce lawyer
who says he's getting taken to the cleaners.
Famed divorce lawyer
Raoul Felder sued a top
investment firm Monday for allegedly costing him $200,000 by
gambling on a risky hedge fund when he wanted to play it
conservatively.
"My instructions were very
simple," he said.
The so-called Duke of
Divorce filed the $5 million suit in
Manhattan against
AllianceBernstein, saying he
was misled last year into investing $750,000 in a riskier fund that
brought the firm more fees and commissions.
Felder, whose divorce court
targets have included
Martin Scorsese,
Lawrence Taylor and
Patrick Ewing, said the
investment firm steered him into the losing fund out of "greed and
self-interest."
"It's like the owner of a
restaurant who tells his waiters to push the chopped liver," Felder
said.
AllianceBernstein, whose
parent is French insurance giant
AXA, manages more than $590
billion. A spokesman for the firm declined to comment.
NY Lawyer
Clashing With Judge May
Face Sanctions Over Accusations
By Joel Stashenko
New York Law Journal
New York Lawyer
October 21, 2008
ALBANY - Sanctions appear
to be warranted against an attorney who made the "utterly baseless"
accusation that the Northern District Bankruptcy Court altered his
complaint, a judge has ruled.
Judge Robert E. Littlefield
Jr. ordered Paul S. Hudson to appear before him on Oct. 29 in Albany
to show cause why the attorney should not be punished for alleging
the judge had ex parte conversations with the plaintiff in a Chapter
7 bankruptcy action against Mr. Hudson and that Mr. Hudson's
complaint had been changed by the court.
"The court is greatly
distressed by the tactics Hudson is willing to employ in attempts to
have the court recuse itself from this matter, especially given that
Hudson is an attorney," Judge Littlefield wrote in In re Hudson,
00-11683. "There simply was no foundation for Hudson to falsely
accuse this court of a crime. Given the seriousness of the
allegations combined with the lack of any evidentiary support or
minimal investigation, sanctions against Hudson appear to be
warranted."
Judge Littlefield noted
that the Rule of Bankruptcy Procedure 9011(b)(1) and (3) empowers
him to admonish Mr. Hudson, impose a monetary sanction and/or refer
his case to the Committee on Professional Standards.
The judge also denied Mr.
Hudson's motion that the judge recuse himself from an adversary
proceeding titled Washington 1993 Inc. v. Hudson, 00-90091,
filed in connection with the bankruptcy case. Judge Littlefield
noted it was the fourth time Mr. Hudson had asked the court to
recuse himself in Mr. Hudson's 8 1/2-year bankruptcy case or in
related adversary proceedings.
As with Mr. Hudson's other
motions, Judge Littlefield said he would not recuse himself because
"the court finds that a reasonable person would not conclude that
the court's impartiality could be reasonably questioned" under 11
U.S.C. §455(a).
Mr. Hudson, who is
representing himself, contended that in reviewing the court's file
in his case in connection with an appeal to the district court, he
discovered Post-It notes on the cover sheet of the adversary
proceeding and on his complaint.
One note read "5/1/00 added
relief per chambers direction"; the other, "added 727 relief for
this complaint per chambers 5-01-00."
At the time of the filing
for bankruptcy protection and the adversary proceeding, Mr. Hudson's
case was before Bankruptcy Court Judge E. Stephen Derby in Maryland.
Judge Littlefield explained
that one cause of action on the discharge in the adversary
proceeding was entered by Judge Derby in error because it mentioned
11 U.S.C. §523(a)(6), when the applicable Bankruptcy Code section is
§727. After Judge Derby noticed the error, he vacated the discharge
by an order dated March 14, 2000.
However, before the docket
was corrected under Judge Derby's direction, the adversary
proceeding and Mr. Hudson's bankruptcy case were transferred to the
Northern District of New York.
Judge Littlefield wrote
that the docket was corrected on May 1, 2000, as reflected in the
Post-It notes. The changes were not made, as Mr. Hudson argued, by
the court ex parte and sua sponte, the judge determined.
He also rejected Mr.
Hudson's contention that his complaint was altered by the court. Mr.
Hudson claimed that a typewritten passage in the complaint did not
match the font of the rest of the computer-printed copy he submitted
to the court.
Judge Littlefield wrote
that he reviewed not only the docket in the case before his court,
but also that in Maryland bankruptcy court. He held that the copies
of the complaint were identical, meaning they had not been altered
in the Northern District.
The document that Mr.
Hudson purported to be a "smoking gun" in reality shows that his
charges are "simply false," the judge held.
"Hudson obviously failed to
conduct a reasonable inquiry prior to filing his motion," Judge
Littlefield wrote. "Seemingly, if one was going to accuse the court
of altering a pleading the first piece of evidence one would gather
to support this claim would be an unaltered copy of the pleading."
Judge Littlefield and Mr.
Hudson sparred in a different case last year in which the judge
reduced the tax liability for Mr. Hudson and his late wife on a
trust recovery.
Judge Littlefield reduced
liability for the Hudsons from more than $50,000 to about $5,000,
and ordered that Mr. Hudson, who also represented himself in that
case, could seek attorney's fees. But Judge Littlefield reduced the
$21,206 Mr. Hudson sought to $6,831 and wrote that he was tempted to
refuse him any fees because of an application that was "replete with
deficiencies and problems."
Washington 1993 Inc., is
seeking to recover $385,000 from Mr. Hudson.
Washington 1993 Inc., was a
real estate company. It no longer exists, and all of its rights have
been transferred to its principal, Richard Corvetti, according to
his attorney, Kenneth G. Varley of Donohue, Sabo, Varley & Armstrong
in Albany.
Mr. Varley said yesterday
that Mr. Corvetti will not have a role in Mr. Hudson's hearing
before Judge Littlefield.
Mr. Hudson, formerly of
Albany and now of Sarasota, Fla., yesterday said he expects to file
a written response to Judge Littlefield's order to show cause by
tomorrow's deadline and to appear before the judge on Oct. 29. Mr.
Hudson said any further comments would be inappropriate.
NY Lawyer
Clashing With Judge May
Face Sanctions Over Accusations
By Joel Stashenko
New York Law Journal
New York Lawyer
October 21, 2008
ALBANY - Sanctions appear
to be warranted against an attorney who made the "utterly baseless"
accusation that the Northern District Bankruptcy Court altered his
complaint, a judge has ruled.
Judge Robert E. Littlefield
Jr. ordered Paul S. Hudson to appear before him on Oct. 29 in Albany
to show cause why the attorney should not be punished for alleging
the judge had ex parte conversations with the plaintiff in a Chapter
7 bankruptcy action against Mr. Hudson and that Mr. Hudson's
complaint had been changed by the court.
"The court is greatly
distressed by the tactics Hudson is willing to employ in attempts to
have the court recuse itself from this matter, especially given that
Hudson is an attorney," Judge Littlefield wrote in In re Hudson,
00-11683. "There simply was no foundation for Hudson to falsely
accuse this court of a crime. Given the seriousness of the
allegations combined with the lack of any evidentiary support or
minimal investigation, sanctions against Hudson appear to be
warranted."
Judge Littlefield noted
that the Rule of Bankruptcy Procedure 9011(b)(1) and (3) empowers
him to admonish Mr. Hudson, impose a monetary sanction and/or refer
his case to the Committee on Professional Standards.
The judge also denied Mr.
Hudson's motion that the judge recuse himself from an adversary
proceeding titled Washington 1993 Inc. v. Hudson, 00-90091,
filed in connection with the bankruptcy case. Judge Littlefield
noted it was the fourth time Mr. Hudson had asked the court to
recuse himself in Mr. Hudson's 8 1/2-year bankruptcy case or in
related adversary proceedings.
As with Mr. Hudson's other
motions, Judge Littlefield said he would not recuse himself because
"the court finds that a reasonable person would not conclude that
the court's impartiality could be reasonably questioned" under 11
U.S.C. §455(a).
Mr. Hudson, who is
representing himself, contended that in reviewing the court's file
in his case in connection with an appeal to the district court, he
discovered Post-It notes on the cover sheet of the adversary
proceeding and on his complaint.
One note read "5/1/00 added
relief per chambers direction"; the other, "added 727 relief for
this complaint per chambers 5-01-00."
At the time of the filing
for bankruptcy protection and the adversary proceeding, Mr. Hudson's
case was before Bankruptcy Court Judge E. Stephen Derby in Maryland.
Judge Littlefield explained
that one cause of action on the discharge in the adversary
proceeding was entered by Judge Derby in error because it mentioned
11 U.S.C. §523(a)(6), when the applicable Bankruptcy Code section is
§727. After Judge Derby noticed the error, he vacated the discharge
by an order dated March 14, 2000.
However, before the docket
was corrected under Judge Derby's direction, the adversary
proceeding and Mr. Hudson's bankruptcy case were transferred to the
Northern District of New York.
Judge Littlefield wrote
that the docket was corrected on May 1, 2000, as reflected in the
Post-It notes. The changes were not made, as Mr. Hudson argued, by
the court ex parte and sua sponte, the judge determined.
He also rejected Mr.
Hudson's contention that his complaint was altered by the court. Mr.
Hudson claimed that a typewritten passage in the complaint did not
match the font of the rest of the computer-printed copy he submitted
to the court.
Judge Littlefield wrote
that he reviewed not only the docket in the case before his court,
but also that in Maryland bankruptcy court. He held that the copies
of the complaint were identical, meaning they had not been altered
in the Northern District.
The document that Mr.
Hudson purported to be a "smoking gun" in reality shows that his
charges are "simply false," the judge held.
"Hudson obviously failed to
conduct a reasonable inquiry prior to filing his motion," Judge
Littlefield wrote. "Seemingly, if one was going to accuse the court
of altering a pleading the first piece of evidence one would gather
to support this claim would be an unaltered copy of the pleading."
Judge Littlefield and Mr.
Hudson sparred in a different case last year in which the judge
reduced the tax liability for Mr. Hudson and his late wife on a
trust recovery.
Judge Littlefield reduced
liability for the Hudsons from more than $50,000 to about $5,000,
and ordered that Mr. Hudson, who also represented himself in that
case, could seek attorney's fees. But Judge Littlefield reduced the
$21,206 Mr. Hudson sought to $6,831 and wrote that he was tempted to
refuse him any fees because of an application that was "replete with
deficiencies and problems."
Washington 1993 Inc., is
seeking to recover $385,000 from Mr. Hudson.
Washington 1993 Inc., was a
real estate company. It no longer exists, and all of its rights have
been transferred to its principal, Richard Corvetti, according to
his attorney, Kenneth G. Varley of Donohue, Sabo, Varley & Armstrong
in Albany.
Mr. Varley said yesterday
that Mr. Corvetti will not have a role in Mr. Hudson's hearing
before Judge Littlefield.
Mr. Hudson, formerly of
Albany and now of Sarasota, Fla., yesterday said he expects to file
a written response to Judge Littlefield's order to show cause by
tomorrow's deadline and to appear before the judge on Oct. 29. Mr.
Hudson said any further comments would be inappropriate.
NY Lawyer
Suspended for Forgery
By Anthony Lin
New York Law Journal
New York Lawyer
October 16, 2008
The Appellate Division, First Department, has ordered a three-year
suspension for a lawyer convicted in New Jersey of forging his
clients' signatures on a $75,000 settlement check from which he
failed to distribute their share.
Anthony M. Mahoney had
originally been convicted in 2002 on two theft counts as well but
those were ultimately reversed in 2006 by the New Jersey Supreme
Court. Noting that the twists and turns of the criminal case had
delayed Mr. Mahoney's New York disciplinary proceedings and then
removed the most serious charges, a referee had recommended a
three-year suspension retroactive to January 2004. The referee cited
Mr. Mahoney's previously unblemished disciplinary record and history
of active community involvement in her recommendation and noted he
had made restitution to his clients within months of his alleged
theft.
The hearing panel in the
case, however, urged a prospective five-year suspension on the
grounds that Mr. Mahoney only made restitution after he became aware
his actions were the subject of a criminal investigation.
In ordering a prospective
three-year suspension, the court split the difference, noting that
his misconduct appeared "truly aberrational" but was nonetheless
serious.
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.
Grimsley pleaded guilty to two Florida Bar grievances April 25,
and the Florida Supreme Court has approved the unconditional plea
and consent judgment for discipline.
Under the judgment, Grimsley wrote a letter of apology to the
Daily Business Review for his inappropriate comments about judges
and admitted a 2006 drunken-driving arrest.
The date of Grimsley's reprimand by the Bar's board of governors
has not been set. He must undergo a medical evaluation by a doctor
who specializes in substance and alcohol abuse and comply with any
treatment recommendations. He also must pay $1,371 in costs.
Grimsley, who remains with the company, declined to comment
beyond his letter to the Daily Business Review.
United Automobile Chief Executive Officer Richard Parillo Sr.
issued a statement saying the company "regrets the entire incident
resulting in the Florida Bar reprimand issued against Mr. Grimsley."
Parillo distanced the company from the comments but also criticized
Florida law for allowing abuse in insurance claims.
"His frustration with a legislative system widely known to
condone abuse unfortunately caused him to express thoughts and ideas
that were misdirected," Parillo's statement said.
The firm's outside attorney Carlos Lidsky declined to
comment.
In the June 17 apology letter, Grimsley acknowledged making an
inappropriate comment about judges but claims he immediately asked
to retract it.
The Daily Business Review disputes that contention and stands by
its story.
"Irrespective of how it happened, the fact remains that I should
never have made such a statement that was clearly derogatory toward
the judiciary in direct violation of several rules of professional
conduct," Grimsley's letter stated.
He was quoted in the article about United's efforts to fight
fraudulent and excessive claims for personal injury protection
coverage in car accidents. Company leaders and others alleged PIP
encourages fraud by lawyers, medical providers, policyholders and
others, increasing pressure for higher rates.
Grimsley didn't single out any judges, but the company had
aggressively been targeting Miami-Dade County Court Judge
Jacqueline Schwartz to get her removed from all of its cases for
alleged bias. The article also noted United had contentious lawyer
fee hearings before both Schwartz and County Judge Lawrence King.
Miami-Dade Circuit Court spokeswoman Eunice Sigler said Judges
King and Schwartz declined to comment on the disciplinary action.
Grimsley complained in the article about the rates of summary
judgments granted by judges compared with the company's success
before juries and concluded, "I think the judges are being paid off,
but I can't prove that."
In a follow-up article, he groused about judicial hostility and
the role of campaign contributions, but he added, "I don't think
there's any money changing hands."
Former Dade County Bar Association President Merrick Gross
wrote a letter to the editor criticizing Grimsley and the Daily
Business Review for publishing his "scandalous and unsupported
quotation."
United distanced itself from Grimsley's comments. Lidsky, a
partner in the Hialeah, Fla.-based law firm of Lidsky Vaccaro &
Montes, said at the time that his firm hand-delivered an apology
letter to King.
Grimsley's letter to the Daily Business Review was on the
letterhead of Charles J. Grimsley & Associates of Miami Gardens and
listed a phone number that reaches United's claims switchboard.
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.
Defense attorneys say investigators misunderstood taped phone
conversations.
Lawyers for executive Lance Poulsen were beginning their case
Monday after the government spent a week playing taped phone calls
and meetings for a federal jury.
Poulsen goes on trial in August on multiple charges of
conspiracy, securities and wire fraud and money laundering. The
government alleges he misled investors about unsecured loans his
company was providing health care companies such as hospitals and
nursing homes.
Before that trial, he is defending himself against charges that
he and longtime acquaintance Karl Demmler, a Columbus bar and
restaurant owner, teamed up to persuade the witness to help Poulsen
beat the fraud case against him.
Poulsen is founder and former chief executive officer of National
Century Financial Enterprises, once described as the country's
biggest health care financing company.
Poulsen said on a tape played Friday that the government's star
witness should explain that her previous statements to prosecutors
were based on old facts.
Poulsen said the witness should say, "But now, there is a new set
of charges and it's a new indictment and I'm not familiar with it,"
Poulsen said on the recording.
Prosecutors say the witness, Sherry Gibson, a former National
Century executive vice president was promised $500,000 if she could
"have amnesia" when it came time to testify.
On Friday, Poulsen attorney Peter Anderson suggested telephone
conversations between Demmler and Poulsen were harmless because they
corresponded with trips that Poulsen, living in Florida, was about
to make back to Columbus.
Jeffrey Williams, an FBI agent who led the investigation,
disagreed, saying records indicated dozens of phone calls back and
forth between the two at several different times last year.
Gibson pleaded guilty in 2003 to a lesser charge of securities
fraud in exchange for helping prosecutors.
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.
I llegal 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.
U.S. Immigration and Customs Enforcement (ICE) agents arrested
Darrell Lee Johnson, 78, of the Law Offices of Darrell Lee Johnson,
who is charged with possessing and attempting to sell fictitious
financial obligations. Johnson has had his license suspended five
times by the State Bar of California for failing to pay his
membership fees and MCLE noncompliance. He also has received two
disciplinary actions, most recently in 2006.
ICE agents allege that Johnson, along with two other people
previously arrested, marketed the fraudulent notes to investors
nationwide. The agents seized 500 fraudulent notes from Johnson's
law office, and from his residence, that had a 1934 issue date and
depicted President William McKinley.
The Bureau of Engraving and Printing's largest denomination
printed for the public was a $100,000 Series 1934 Gold Certificate
with a picture of President Woodrow Wilson. These notes, printed in
1934 and 1935, were used as transactions between Federal Reserve
Banks.
The investigation, which is ongoing, is being prosecuted by the
U.S. Attorney's Office for the Central District of California, with
assistance from the U.S. Secret Service. ICE is the investigative
arm of the Department of Homeland Security.
For prior articles
click here
NY Lawyer Sees Plea Deal Unravel
After
Swindled Ex-Client Tells Judge He's Being Conned
By Vesselin Mitev
New York Lawyer
New York Law Journal
February 26, 2008
A plea deal that would have sent a disbarred Long Island attorney to
prison for as little as a year is off the table after his former
client last week read a victim impact statement to the sentencing
judge.
Melissa Seganti detailed in her statement how her former lawyer,
Hewlett-based Joseph Levine, swindled her out of a $300,000 personal
injury settlement and pocketed the money to pay off gambling debts.
"Please do not allow Mr. Levine to con you the way he conned me,"
Ms. Seganti asked Nassau County Court John Kase. "I am begging you
to give him the maximum sentence allowed, to not only restore my
faith in the judicial system, but to send Mr. Levine a clear message
that he will not get away with this."
According to Ms. Seganti, of Rockville Centre, she suffered a
"horrific injury" on Jan. 19, 2004, after sheet rock that was
delivered to her home fell on her, causing her to tear the meniscus
in her right knee and break her right wrist. After five surgeries,
she told the court, "I still take medication for pain and suffer on
a daily basis."
Initially, Ms. Seganti retained Mr. Levine's wife, Jennie M.
Dellaria to represent her, as she knew her from a beach club. Ms.
Dellaria told Ms. Seganti she wanted to spend more time with her
child and could no longer represent her, but her husband, Mr.
Levine, would handle the case.
In actuality, Ms. Dellaria had resigned from the bar after the
grievance committee began investigating an allegation that a check
she drew on her attorney trust account was dishonored.
In re Dellaria, 38 AD3d 14 (2nd Dept. 2006).
Ms. Seganti stated she settled her case at mediation for "much less"
than she and Mr. Levine had discussed. Mr. Levine agreed to reduce
his fee to $50,000, instead of the customary one-third of the net
settlement, or $100,000. However, she stated that when she tried to
collect her money, Mr. Levine stalled.
"Every single day it was excuse after excuse, phone call after phone
call, message after message, fax after fax, as to why I still did
not have my proceeds of the check," she said.
"The final story was the IRS had frozen his escrow account and he
was trying to have it reversed but, in the meantime he was going to
take out a second mortgage to pay me my money while this was being
cleared up," said Ms. Seganti, adding that Mr. Levine had actually
faxed her fake mortgage documents and arranged for her to speak with
people who were purported representatives of the lenders.
After hearing Ms. Seganti's statement, Judge Kase, in an unusual
move, pulled the one-to-three year sentence offered by the Nassau
County District Attorney's Office in exchange for his guilty plea
last month.
The judge offered Mr. Levine a three-to-nine year sentence instead,
in the alternative, an opportunity to take back his plea and take
his chances at trial. Mr. Levine faces up to 15 years in prison if
he is convicted of the grand larceny charge to which he pleaded
guilty.
Michael L. Soshnick, Mr. Levine's attorney, said he was surprised at
how "hot" Ms. Seganti was, as she had been reimbursed by the
Lawyers' Fund for Client Protection.
"She got a quarter of a million dollars for her personal injury
claim, so I don't think she did that badly," he said.
While stressing that "no one is ever justified" in stealing someone
else's money, Mr. Soshnick said that Mr. Levine had been warned that
he was being targeted by organized crime because he had not paid his
gambling debts.
"One night FBI agents knock on his door, confirm his identity and
tell him that pursuant to a court-ordered wiretap warrant my
client's name was mentioned and he was perceived to be an intended
murder victim," said Mr. Soshnick, of Mineola.
At that point, Mr. Soshnick said his client decided to steal the
money.
"I think it's obvious that my client is a sick person with a severe
disorder," said Mr. Soshnick of his client's gambling addiction.
Mr. Levine is due back in court today.
Mr. Levine had been suspended for two years from practicing law on
Dec. 3, 2001, after being convicted of conspiracy to commit mail
fraud. He was reinstated on April 15, 2005.
He resigned on April 6, 2007 and was subsequently disbarred on June
26, 2007 after four complaints of professional misconduct, including
the withholding of settlement funds from Ms. Seganti.
In re Levine, 43 A.D.3d 176.
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.
Russell is currently on leave from his firm, serving a home
confinement sentence for his admitted destruction of a hard drive
containing child pornography while working for a Greenwich church.
The church's music director was implicated. Russell, a former Bronx,
N.Y., assistant district attorney, pled guilty to a single count of
obstruction of justice, and was spared prison time.
Lamothe says Russell warned her at her first job interview that
his law firm was in disarray and that he was a "yeller." Within a
few months "he fulfilled his prophecy," with Lamothe resigning after
the final outburst. During her course of employment, Russell said
she had been a good employee, but harangued the 300-pound woman
about her weight gain. She was diagnosed with uterine cancer in
February 2006.
She had diabetes and testified she was concerned about her
ability to have a child.
Russell told the court "it's none of my business," about her
health problems, but allegedly ordered Lamothe to exercise daily, to
walk from the train station, and, she says, "constantly belittled,
berated and screamed at her in front of her fellow employees," wrote
Gilardi in his Jan. 18 ruling. Russell allegedly told her to "move
her fat ass," called her "fat" and threw objects at or near her.
The alleged incidents of physical contact convinced Gilardi to
issue the pre-judgment remedy. At one time a workman broke a light
fixture in a stairwell and Lamothe called the building's management
to clean up the debris. Upset, Russell allegedly grabbed her arm and
brought her to the basement to get a vacuum cleaner. "When he
couldn't open the basement door because the vacuum was in the way he
pushed the door open, grabbed the vacuum, and threw it down the
stairs, breaking it," Gilardi noted.
He then allegedly took Lamothe nearby to the lobby of the Patriot
National Bank and "in front of the bank tellers and customers yelled
to ask if there was a dust pan or a broom" Lamothe could use, then
made her go get them.
On another occasion, Lamothe says she was outside smoking a
cigarette, and Russell "came up and grabbed the cigarette out of her
mouth and stomped it on the ground. He announced to everyone that
she is '(expletive) sick' and told her that if he ever saw her
smoking again she would be fired," Gilardi recounted. Russell
conceded he might have told Lamothe she was sick because she was
"fat," Gilardi noted, adding, "He said it was not beyond the realm
of possibility that he told plaintiff she was 'retarded.'"
Russell, a former member of the Connecticut Law Tribune's
editorial board, is defended in this case by Lewis H. Chimes of New
Haven, Conn.'s Garrison, Levin-Epstein, Chimes & Richardson.
"I think, given the very low standard for a PJR in Connecticut,
this wasn't a surprise, although I was surprised at the amount,"
Chimes said. "I think once the facts are known, it will be clear
this is a garden variety workplace stress situation. [The tort of]
Intentional infliction of emotional distress has a very high
standard, and 90 percent of claims are not allowed." He added, "I
don't think this case meets this threshold."
Lamothe is represented by the five-lawyer New Milford, Conn.,
firm of Guendelsberger, Collins, Henry & Guendelsberger. Her lawyer,
Rebecca E. Guendelsberger, said her client is currently employed in
a Bridgeport law office. She said the judge, "obviously recognized
that my client was hurt. This is something that no employee should
have to experience, especially someone who works for an attorney."
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.
"We were very pleased with
this sentence," said Carpenter, who prosecuted Charles. "It reflects
the terrible damage he's done to these six girls. It also reflects
his offense not only against his profession but against the
courthouse where you seek justice and truth."
In addition to the sexual
encounter that the sheriff's deputies disrupted, Charles raped a
16-year-old in the rear room of the lawyers' lounge and also
sexually molested a girl in the anteroom outside a courtroom and
twice pulled girls onto his lap in the lawyers' lounge, Carpenter
said.
Charles' defense attorney,
Angelo Cameron, had sought for Charles to be sentenced to five to 10
years in prison and supervised counseling. He wanted a "controlled
environment and psychiatric treatment" for his client, Cameron said,
"because pedophilia is a mental abnormality."
Philadelphia Common Pleas
President Judge C. Darnell Jones II said that after Charles was
initially arrested, the Philadelphia Sheriff's Office, which
controls security for the CJC, reviewed if more restricted access
should be instituted for the building, but it was ultimately
determined that attorneys do need to meet and work inside the CJC at
varied hours.
It also was decided that
Charles' activities were an aberration so the sheriff's CJC
protocols were found to be sufficient, Jones said.
"It's one-in-a-billion for
a lawyer to do something like that," Jones said.
Two of the girls, and four
of the other girls were from the same family, Carpenter said.
"He basically used his
influence and his status to gain the trust of families, particularly
families in difficult circumstances, and then used that trust to
isolate the girls, buy them things, use treats and to groom them for
sexual contact," Carpenter said. He used force when the girls
resisted, Carpenter said.
Once the MLK incident
opened up awareness into Charles' activities, some of the other
victims came forward and law enforcement conducted an investigation,
including verifying motel records and bank surveillance tape
footage, the prosecutor said.
Charles was ruled to be a
sexually violent predator and a pedophile strongly attracted to both
pre-pubescent and post-pubescent children during a Megan's Law
hearing held before his sentencing, Carpenter said.
Cameron has not discussed
yet with Charles if he wants to appeal his sentencing. Charles will
not be eligible for parole until he's 75, Carpenter said.
Charles did have remorse
for his actions, Cameron said.
Charles agreed to an
emergency suspension of his legal license after his arrest in
January.
Corporate
Attorneys Mull Meaning
of NY BigLaw Partner's Indictment
New York Lawyer
December 20, 2007
By Anthony Lin
New York Law Journal
Has the
indictment Tuesday of Mayer
Brown partner Joseph P. Collins sent "a chill down the spine" of
transactional lawyers everywhere, as Mr. Collins' defense lawyer
said it should?
"It's definitely a wake-up call," said Mark S. Vecchio, a corporate
partner in the New York office of Venable. "I'm sure a lot of
lawyers read about this in the morning papers and said, 'Oh my
God.'"
Mr. Collins was indicted for allegedly helping executives at
commodities brokerage Refco Inc. hide massive losses from investors.
When those losses subsequently came to light, Refco was forced to
declare bankruptcy. In a statement Tuesday, Mayer Brown said Mr.
Collins had been put on leave but that the firm stood by its work
for Refco.
Four Refco executives, including CEO Philip Bennett, were also
indicted. Yesterday, one of the executives, Refco Capital Markets
President Santo Maggio, pleaded guilty to securities fraud and
conspiracy charges and agreed to cooperate in the case.
Since Enron and the savings and loan crisis before that, corporate
lawyers have been on the defensive about what responsibility they
have, if any, for the misdeeds of their clients. Many have argued
that even experienced lawyers cannot be expected to detect fraud in
a complex web of transactions.
"If he was just careless, there's a hell of a chill running down my
spine about this," said the head of one New York firm who asked to
remain unnamed. Another prominent corporate lawyer, who also asked
to remain unnamed, said the case would be watched closely in the
darkening economic climate.
"When the economy takes a hit, there is a tendency to look for
scapegoats to be taken out and shot," he said.
But most of the lawyers who spoke to the Law Journal yesterday are
not ready to rally around Mr. Collins. Citing the damning report of
the Refco bankruptcy examiner, they noted that it was indeed
possible that he crossed a line in the course of his representation.
"He may just be a bad apple," said Mr. Vecchio.
Indeed, in
announcing the indictment,
Southern District U.S. Attorney Michael Garcia seemed keen to allay
fears among the profession. He stressed that it was not a crime to
represent a client who had committed a crime and described Mr.
Collins as a lawyer who had become a full co-conspirator.
"[Mr. Collins] was not merely a lawyer whose client was committing
fraud and who should have caught on," said Mr. Garcia. "Collins
instead played an active and crucial part in perpetrating the Refco
fraud."
Where that line is drawn is a major issue of concern for corporate
lawyers though. While criminal cases against corporate lawyers over
client representation are extremely rare, high-stakes civil lawsuits
alleging law firms participated in corporate fraud have become
almost routine.
Mayer Brown itself was already facing a trio of big lawsuits over
its Refco work. A securities class action, a bankruptcy trustee suit
and a lawsuit by private equity group Thomas H. Lee, which bought a
controlling interest in Refco allegedly due in part to
misrepresentations by Mr. Collins, all loom over Mayer Brown. A
guilty plea or conviction in the prosecution of Mr. Collins would no
doubt hurt in all three civil cases.
British legal giant Clifford Chance is also facing civil allegations
in federal court in Philadelphia that it participated in fraud that
led to the bankruptcy of health-care finance company DVI Inc.
Clifford Chance is being represented in that case by William J.
Schwartz of Cooley Godward Kronish, who is also representing Mr.
Collins.
According to a recent survey of British law firm partners by
Legal
Week, a London-based affiliate of the Law Journal,
more than half of those polled said it was "possible" or "likely"
that a major law firm would collapse due to a lawsuit.
Law firms are particularly vulnerable to lawsuits because their most
valuable assets, lawyers, are highly mobile. Vinson & Elkins,
Enron's chief outside law firm, managed to survive that scandal and
the major lawsuits it spawned. But Jenkens & Gilchrist saw its
lawyers depart in droves after the firm's tax shelter practice
became the target of government probes and lawsuits. The firm shut
down earlier this year.
Solo
Faces 73 Criminal Counts for Leading 25-Year,
$2 Million Fraud Scheme
By Amaris Elliott-Engel
The Legal Intelligencer
New York Lawyer
December 12, 2007
A Market Street solo practitioner was charged yesterday with leading
a personal injury insurance fraud scheme since 1981 that bilked
insurance companies out of more than $2 million.
Personal injury attorney H.
Allen Litt, 58, of Bryn Mawr, Pa., has been charged along with 14
others in a scam involving falsifying personal injuries from made-up
or exaggerated slip-and-fall and auto accident cases and submitting
fraudulent insurance claims, Philadelphia District Attorney Lynne
Abraham said.
Litt was charged with 73
criminal counts, including 31 third-degree felonies of insurance
fraud and one first-degree felony of corrupt organizations.
Litt, who was admitted to
practice law in 1975, is accused of working with 100 runners who
both located potential imposter claimants or posed as claimants,
according to a grand jury presentment charging Litt and his
co-defendants.
The imposters would obtain
medical care from physicians selected by Litt and rack up inflated
medical bills via numerous visits to the Litt-selected doctors, the
grand jury charged. Some claimants actually took falls or had an
injury from another instance but still participated in a fraudulent
fall or accident claim at the behest of the runners, the grand jury
charged.
Litt would file fraudulent
insurance claims based on the doctors' bills and bogus photographs
taken by the runners, the grand jury charged. Four runners alone
brought in 300 claims for which insurance companies paid $2.5
million, according to the grand jury presentment. Runners received
commissions for bringing in cases and for taking pictures of
fraudulent accident scenes, the presentment charged.
Abraham cited the Charles
Dickens' story Oliver Twist about an orphan sucked into a crime ring
and called Litt the equivalent of the story's Fagin, the Dickensian
criminal mastermind.
The 25 years of alleged
fraud and "hundreds upon hundreds and hundreds of fake accidents"
probably involved much more than the $2.5 million, Abraham said.
Abraham's office plans to
seek a judge's imprimatur on an exception to the statue of
limitations in order to be able to prosecute Litt for more
fraud-based charges.
Litt was scheduled to be
arrested at the office of his attorney, Marc Neff, at noon
yesterday, Abraham said. A call to Neff's office was not returned.
There was no answer at Litt's 1515 Market St. office.
Litt also was charged with
one first-degree felony count of conspiracy, 21 third-degree felony
counts of theft by deception, 13 third-degree felony counts of
attempted theft by deception, four counts of second-degree
misdemeanor of false swearing, one first-degree felony count of
dealing in proceeds of unlawful activities and one third-degree
felony, count of criminal use of a communication facility.
Litt could face up to 20
years in prison and a $25,000 fine for each first-degree felony,
seven years in prison and up to a $15,000 fine for each third-degree
felony, and two years in prison and up to a $5,000 fine for each
second-degree misdemeanor.
The grand jury evidence
included testimony from three alleged runners for Litt: Lewis Crump,
a North Philadelphia man who said he was in the "accident business,"
James "Big Frank" Guinn, a taxi driver who based himself at 27th and
Tasker streets in South Philadelphia and Nathaniel Shaw, who said he
was a real estate investor and landlord in North and West
Philadelphia. All three men have already pleaded guilty to insurance
fraud as part of plea bargains.
They revealed Litt "relied
on a stable of runners like themselves to recruit friends and family
members who pretended to fall and faked injuries in order to file
false insurance claims. He then paid the runners, usually between
$100 and $1,000 per case," the grand jury charged.
According to the grand jury
presentment, the 132 claims brought by Shaw to Litt involved more
than $1 million, and Shaw was paid $47,000. The 36 claims brought by
Guinn to Litt brought in $100,000, and Guinn was paid $12,000, the
presentment said. Crump allegedly brought 10 to 12 cases to Litt.
The runners "worked on
commission and they were more than happy to recruit," Abraham said.
Shaw, who first met Litt
when he was involved in a legitimate trolley accident, said Litt was
aware the 132 cases he brought him were fraudulent, but Litt would
pretend with these clients that he was not involved in the fraud,
the grand jury charged. Litt, however, coached Shaw to choose
accident sites that involved a cracked sidewalk or a broken step and
no surveillance cameras; Litt also told Shaw to instruct the
imposter claimants to go to an emergency room and complain of
injuries from a fall, the grand jury charged.
Shaw's imposter-accident
recruits complained that Litt promised them big money if they made
frequent appointments with the doctors he referred to them, but that
their share of settlements were tiny, according to the grand jury
presentment.
Litt dismissed the
complaints, the grand jury charged, and said: "Don't worry about it.
They're not hurt anyway, and I got to pay the medical bills and got
to pay the doctors."
Iris Kurtz, the
receptionist in Litt's office, testified that Litt directed her to
improperly notarize releases of settlements without obtaining the
signatures of the clients, the grand jury charged.
According to the grand jury
presentment, Shaw learned that an investigation was being undertaken
of his and Litt's activities from two women he had recruited to take
part in fraudulent claims.
In response, according to
the grand jury presentment, Litt got Shaw to obtain retraction
statements from both women. Those statements were not submitted to
the district attorney, but instead were turned over to an
investigator and were introduced as evidence in front of the grand
jury.
Files were seized from
Litt's office in December 2005, and Litt asked Shaw to contact the
claimants involved in the cases in those files, but Shaw refused
during a phone call with Litt, the grand jury charged.
"In response, Litt
announced, 'things are going to get ugly,' and hung up," according
to the presentment.
Guinn said that he drew
claimants from 16 of his neighbors that he called the "Tasker Street
Crew," according to the presentment. Guinn said he followed Litt's
instructions to find holes in front of "well-off, but not too big,
businesses" that didn't have a lot of attorneys to fight a case but
would have more money to pay out than Chinese or Korean businesses,
the grand jury charged.
Abraham said that the
investigation is continuing into at least 10 doctors that Litt
allegedly referred fraudulent clients to.
The investigation into Litt
and his alleged cohorts began with an October 2004 tip from an
insurance fraud investigator with Chubb Insurance Co., Abraham said.
A search of Litt's office
revealed hundreds of documents, including accounting file cards,
canceled checks and accident scene photos, according to the grand
jury's presentment.
Litt was "really very
helpful to us," Abraham said. "He kept great records."
Linda Perkins, chief of the
District Attorney's Office's Insurance Fraud Unit, said Litt is an
exception to the rule and that most attorneys are honest and
withdraw a claim for a fraudulent accident.
Joshua Pitts, 63, of
Philadelphia, was Litt's most active runner, according to the
presentment. Over 400 checks totaling more than $190,000 were issued
to Pitts from Litt, according to records seized from Litt's office,
the grand jury charged.
Pitts and three of his
adult children were charged each with one count of insurance fraud
and related offenses, according to the District Attorney's Office.
Ten alleged co-conspirators, including Crump, Guinn and Shaw, have
already been arrested. Some have pleaded guilty as part of plea
bargains and have agreed to testify against Litt.
Samuel Stretton, an
attorney who writes an ethics column for Pennsylvania Law Weekly,
The Legal's sister publication, and who often represents jurists in
legal quandaries, said that Litt will most likely be able to
continue practicing law pending the outcome of his court case.
But the Disciplinary Board
of the Pennsylvania Supreme Court can seek more immediate action on
Litt's law license by requesting that a hearing be held on
suspending Litt from practicing law on an interim basis, Stretton
said.
Attorney
Get 15 Years in Prison for
Bilking Elderly Clients Out Of $13 Million
New York Lawyer
December 7, 2007
By John Pacenti
Daily Business Review
MIAMI -- Saying he would mete out a longer sentence if he could,
U.S. District Court Judge Alan Gold handed down the strictest prison
sentence possible under federal guidelines -- 15 years -- for
one-time high-flying Miami attorney Louis S. Robles for bilking
elderly clients out of more than $13 million.
Gold had previously rejected a plea deal worked out for Robles by
the U.S. Attorney's office that would have resulted in 10 years
behind bars for the 59-year-old lawyer, saying it was too lenient.
Besides serving 15 years in prison, Gold ordered Robles to pay
$13.5 million in restitution and work 900 hours of community service
in a nursing home. He must also relinquish his law license for good.
The attorney represented more than 7,000 asbestos clients from
the late 1980s through February 2003. Federal prosecutors said he
operated an elaborate Ponzi scheme. Clients -- many elderly and
dying -- would not be paid until he misappropriated money from other
clients. Nearly 4,400 clients were defrauded, the government said.
Robles pleaded guilty to three counts of mail fraud on Sept. 17
for misappropriating settlements in asbestos lawsuits, defrauding
thousands of clients nationwide. He paid little or nothing to
clients while living in the lap of luxury with two full-time
servants, a private plane and a waterfront mansion on Key Biscayne.
The lawyer "abused the special trust that his clients placed in
him," U.S. Attorney R. Alexander Acosta said in a statement late
Tuesday. "Robles sought out clients who were dying and cheated them
out of millions of dollars, so that he could finance his own
extravagant lifestyle."
Attorney
Indicted for Helping Clients Avoid $4.6M in Taxes
By Shannon P. Duffy
The Legal Intelligencer
New York Lawyer
November 29, 2007
A Montgomery County lawyer allegedly concocted schemes to help eight
clients and two of his employees hide more than $23 million in
income and avoid paying more than $4.6 million in taxes, a federal
grand jury charged in a 168-page indictment handed up yesterday.
Attorney Bernard J.
Bagdis, 58, who has an office in Blue Bell, Pa., was arrested
yesterday at his home in Norristown, Pa. The indictment accuses him
of allegedly assisting his clients - including two doctors, a lawyer
and several small-business owners - in funneling large portions of
their income through shell corporations.
Also named in the
indictment are eight of Bagdis' clients and two of his employees.
U.S. Attorney Patrick
Meehan alleged in a news release that Bagdis "was so proud of his
schemes that he boasted he would write a book and call it Federal
Tax Fraud, The User's Guide."
The indictment alleged that
Bagdis has not filed an individual federal tax return since at least
1990 and was captured on tape saying the government investigation of
him would be "a fight to the death."
Bagdis was charged with one
count of attempting to impede and obstruct the IRS, seven counts of
conspiracy, 16 counts of aiding and assisting the preparation of a
false tax return, six counts of failing to file individual income
tax returns and five counts of failing to file currency transaction
reports.
Attorney
Arrested in Internet Sex Sting at Statehouse
By John McCarthy
The Associated Press
New York Lawyer
November 1, 2007
COLUMBUS, Ohio -- An
attorney arrested in an Internet child-sex sting in the basement of
the Ohio Statehouse thought he was going to meet a 15-year-old girl
he had met online, authorities said.
Barry Mentser, 48, a former
children's services lawyer, was taken into custody Wednesday moments
after the police officer who conducted the sting testified two
floors above in favor of a bill that would increase penalties for
such offenses.
Lt. Jeff Braley, a
detective from Hamilton Township in Warren County in southwest Ohio,
said he posed as the girl to set up a Statehouse meeting with the
man.
"I said, 'I'm in Columbus.'
He said, 'I'll meet you anywhere,'" Braley said.
Braley, who said he'd been
communicating with the man for about a year, testified before the
Senate Criminal Justice Committee in favor of a bill that would set
mandatory sentences of one to five years for the offense of
importuning by telecommunications, aimed at sexual offenders who
prey upon underage children through the Internet.
Braley said he didn't
arrange the sting at the Statehouse to draw attention to the bill or
his testimony, but that he knew the man was in the Columbus area and
that police were aware of his identity.
Undercover Columbus police
officers spotted Mentser in the Statehouse cafeteria, where Braley
had set up the meeting, said city police spokesman Sgt. Rich Weiner.
A security video later made available by Statehouse officials showed
a man identified as Mentser walking from one side of the basement to
the other, then back across, toward the cafeteria.
The Statehouse is a popular
stop for school field trips, but there were none scheduled
Wednesday, and the building had few visitors besides people
attending legislative sessions and hearings, said Statehouse
spokesman Gregg Dodd.
Mentser, of nearby Gahanna,
is married with three children, The Columbus Dispatch reported. He
was charged with importuning and attempted unlawful sexual conduct
with a minor, Weiner said. If convicted he could face from one year
to 30 months in jail.
Defense attorney Steve
Palmer said Thursday he expected Mentser would enter a not guilty
plea.
"He had no prior record
whatsoever, criminal or otherwise, and this sort of came out of left
field," Palmer told WCMH-TV.
His client remained in the
Franklin County jail Thursday afternoon, hours after a judge set
bond at $50,000. Mentser was scheduled to return to court Nov. 9 for
a preliminary hearing.
Current Ohio law doesn't
require prison sentences for people convicted of importuning by
telecommunications. Many judges say sexual acts typically don't
occur in undercover stings, so they take a "no harm, no foul" stance
and sentence offenders to just weeks in jail and probation, Warren
County Prosecutor Rachel Hutzel said after testifying before the
committee.
Braley said he'd arrested
about 35 people as the result of such sting operations in the past
year.
"The Internet has served as
a very fertile preying ground for these predators," Braley told
committee members.
Mentser was a staff
attorney for Franklin County Children's Services from 1987 to 1990,
when he resigned, agency spokeswoman Kay Marshall said. He had no
direct contact with children outside of court while employed there
and no complaints were filed with the agency about him, Marshall
said.
Disbarred
NY Lawyer Headed
to Prison for Ripping Off Clients
By Daniel Wise
New York Law Journal
New York Lawyer
October 31, 2007
A disbarred lawyer pleaded guilty yesterday in Manhattan Supreme
Court to stealing $148,000 from at least 20 clients.
The ex-lawyer, Richard
Boter, has agreed to a sentence of at least one year in prison and
to pay $160,000 in restitution and forfeiture, according to the
Manhattan District Attorney's Office.
Mr. Boter was the twelfth
attorney to be netted by the office's probe into the use of runners
by personal injury lawyers to bribe hospital employees to gain
access to potential clients. Mr. Boter had purchased cases from
various runners, at least one of whom had bribed hospital employees
to gain confidential information about patients, who were often
being treated for injuries sustained in automobile accidents,
according the the district attorney. To date, the 12 lawyers caught
in the investigation have agreed to pay restitution or forfeiture of
$1.7 million.
With regard to Mr. Boter,
who was
disbarred last month for treating clients like "commodities",
the district attorney's office said he had stolen client funds by
keeping their share of settlement proceeds. He was able to do that
by settling cases without his clients' permission and then forging
their signatures on release forms forwarded to insurance companies
to obtain the release of the settlement funds, the office said.
Missing Local Lawyer Turns Up Dead
By Douglas S. Malan
The Connecticut Law Tribune
New York Lawyer
October 30, 2007
The saga of missing Clinton, Conn., lawyer Jonathan Hoyt has ended
with his suicide in Cedar Rapids, Iowa.
Hoyt, a 59-year-old business law attorney believed to have
embezzled close to $700,000 from about a dozen clients, was found by
police Monday around 11 a.m. in his one-bedroom apartment that he
had been renting since Aug. 30.
Cedar Rapids police Lt. Kenneth Washburn said there was "no
indication of foul play," without providing further details.
Dr. Donald J. Linder, chief medical examiner of Linn County in
Iowa, said that Hoyt's death was "a well-planned suicide," but
declined to comment further until a final autopsy report is ready
within a couple of weeks.
Police were called by Hoyt's landlord, Richard G. Hileman, a
semiretired lawyer from Cedar Rapids. Hileman said that Hoyt began
renting the apartment two months ago under the name Jim Bragg of NY
Biz Systems, a company Hoyt portrayed as assisting companies going
through bankruptcy and other financial difficulties.
Hileman received a letter in the mail from Hoyt on Monday: "It
said that by the time I had received the letter, he would've
committed suicide and not to call 9-1-1 because he didn't want
anyone to be hurt rushing over to the apartment," Hileman said.
Hoyt signed the letter using his real name, Hileman noted.
"I didn't quite know what to make of it," Hileman added. "I
thought I was getting his rent check or his 30-day notice" of
vacating the apartment for which he was paying $470 per month.
Hileman said he drove to the apartment building and told his wife
to call the police. Hileman added that he had had only brief
encounters with Hoyt but had found him to be a "very likeable guy.
"He had only been here two months, and I really didn't know the
gentleman," Hileman said. "[Hoyt's stay] was just unremarkable until
[Monday]."
Hoyt had been missing since early July. Clinton police officers
investigating the case estimate that
Hoyt
embezzled almost $700,000.
Fugitive
Local Lawyer Leaving Few Clues for Cops
By Douglas S. Malan
The Connecticut Law Tribune
New York Lawyer
October 15, 2007
Police say the trail has
gone cold in the case of missing Clinton, Conn., lawyer Jonathan
Hoyt.
The 58-year-old business
law attorney was last seen in early July before he left behind his
tan 1999 Lexus and cryptic letters in which he confessed to
embezzling funds from clients.
Police said they received
tips from acquaintances and colleagues in July and August, but leads
in the case have since come to a halt.
"There hasn't been anything
for a while," said William F. Tate, a public information officer
with the state police. "Nothing has come from [tips we received this
summer]. We're still looking."
The state police Criminal
Intelligence Unit has taken over the case, which is standard
protocol after 30 days. The unit is working with local police in
Westbrook, where Hoyt lived, and in Clinton, where he based his
practice.
Clinton Sgt. Joseph Flynn
said Hoyt has "totally dropped off the grid" with no credit card or
cell phone activity. Flynn, who led the Clinton Police Department’s
investigation of Hoyt, estimates that the missing lawyer embezzled
close to $700,000 from about a dozen clients. Flynn added that he
doesn't know if Hoyt is alive or dead.
"I wouldn’t be surprised
either way, at this point," he said. "There's a good chance he's
offed himself, but I don't know how or where. It's pretty baffling."
Family in Shock
In one letter sent to
grievance officials in July, Hoyt cleared his assistants and his son
Christopher by taking sole responsibility for "the thefts that have
happened concerning The Hoyt Law Group, LLC Connecticut's office."
Hoyt wrote a letter to his
son, dated July 7: " have embezzled funds from my clients … . Like
most lawyers who fall into this trap I always did it with the idea
that I would repay the funds, but of course once I started down this
slippery slope there was nothing but failure for me at the end."
Hoyt's confessions and
disappearance come "as a shock to the family," Christopher said in
an interview. Christopher Hoyt practices intellectual property,
business and criminal law out of the firm's New York office.
"I'm not at liberty to make
a statement that might jeopardize the investigation," he added. "The
family is very concerned. Nobody knows where he is."
Flynn said he believes
Christopher Hoyt is telling the truth.
The elder Hoyt was last
seen on July 6 at his Clinton office, according to police. His Lexus
300, four-door sedan was found by police on July 17 in a parking lot
near the Intermodal Transportation Center in Bridgeport.
On July 20, Middletown
Superior Court Judge Julia L. Aurigemma accepted the state
disciplinary counsel's application to immediately suspend the elder
Hoyt's law license.
Legal Aid
Lawyer Admits Videotaping Female Co-workers
By Barbara Ross and Bill
Hutchinson
New York Daily News
October 25th 2007
A former Legal Aid Society
lawyer pleaded guilty Wednesday to using a spy camera to videotape
female co-workers changing their clothes in their office.
Peter Barta won't go to
jail for behavior he admitted was "creepy, disrespectful, juvenile
and stupid," but he will lose his law license.
"I offer no excuse or
justification for my action. My behavior was inexcusable," added
Barta, 32, in a letter he submitted to Manhattan Supreme Court
Justice Michael Obus.
But before admitting to
felony crime of unlawful surveillance, he asked that the charge be
dismissed or reduced to a misdemeanor.
"I'm not asking for
forgiveness, but an opportunity to earn it," Barta of Queens said in
his letter.
Obus refused to reduce the
charges, but agreed to go along with a recommendation from
prosecutors to show mercy when Barta is sentenced Dec. 3.
Under the plea agreement,
the case will be dismissed and sealed once Barta completes a year of
probation and counseling.
A Georgetown University Law
School graduate, Barta began working as a Legal Aid attorney in
2001.
Between May 2004 and
October 2006, he used a $179 Sharper Image minicam hidden in a clock
to videotape female colleagues changing their clothes. The women
would use an office to change out of their casual clothes into more
dressy attire to appear in court.
When investigators searched
Barta's Kew Gardens home, they found it full of porn and adult toys,
according to court papers.
Claims of
Adultery, Forgery Have Firm
Lawyers Looking for Way Out, Dodging Subpoenas
New York Lawyer
October 15, 2007
By Nathan Carlile
Legal Times
Daniel Portnoy wasn't
having much luck. For days he'd been tracking his quarry. First he
had called his house. Then he began stopping by unannounced, only to
be turned away by a woman who said the man he sought was out of
town. But now, on the morning of Tuesday, Oct. 2, after days of
mounting frustration, he finally had his target in his sights.
As Portnoy watched from a
parked car up the block, Albert Beveridge III, name partner of the
Washington-based environmental boutique Beveridge & Diamond, pulled
his silver Acura up to his home in the tony neighborhood of Wesley
Heights in Northwest Washington. As Beveridge headed to his front
door, Portnoy moved in, but the 72-year-old corporate litigator was
too quick for him, doubling back into his car before Portnoy could
reach him. As Portnoy ran back to his own car, Beveridge raced down
the street to shake his pursuer. The chase was on.
As Portnoy would later
recount in a sworn affidavit, he soon caught up with Beveridge at a
stoplight at the corner of Nebraska and New Mexico avenues, but when
he tried to talk to Beveridge, the lawyer responded by executing a
quick U-turn, brushing Portnoy out of the way. But Portnoy still
managed to make his long-thwarted delivery, sticking a subpoena
under the Acura's windshield wiper as Beveridge sped away.
The incident was just the
latest twist in a sordid story that has ensnared partners at
95-lawyer Beveridge & Diamond in allegations that include adultery
and forgery. The dispute stems from a bitter divorce battle between
firm partner John Guttmann and his wife, Nancy Lasater, a
nonpracticing attorney who was previously co-chairwoman of the Law
Practice Management Section of the D.C. Bar and a solo practitioner
who often represented firms on ethics issues.
The couple's real-life "War
of the Roses" has pulled a litany of well-known Washington lawyers
into the fray, including the elusive Beveridge, who is now senior
counsel at the firm and was subpoenaed to testify about his role as
a former trustee of the firm's 401(k) program.
It was Lasater, acting pro
se, who persuaded Maryland state Judge Durke Thompson to issue the
subpoena to Beveridge, based on her allegation that Guttmann forged
her signature while taking out a loan from the firm's 401(k) plan in
1993. That loan is one of three Lasater is investigating.
"I'm entitled to all of the
documents surrounding these three loans," Lasater says. "I need
information."
The firm argued against
subpoenaing Beveridge because of his age and the fact that nearly 14
years have passed since the disputed loan was executed. But that
argument didn't get far with Thompson.
"If Mr. Guttmann is dipping
into the 401(k) without Ms. Lasater's permission at the time and
altered documents and now says 'I can't remember what I did,' it
doesn't look too good," Thompson said during a Sept. 24 hearing on
the firm's motion to quash the subpoena, according to a transcript.
"And it may not look too good for Mr. Beveridge either if, indeed,
there isn't an adequate documentation in the file."
The firm and Guttmann both
say Lasater's allegations are much ado about very little. "Mr.
Guttmann denies Ms. Lasater's allegations and intends to defend
himself vigorously," says Guttmann's attorney, Mark Carlin, a
partner at Ain & Bank. "The only fair inference is that incomplete
and misinformation was given to the Legal Times in a
deliberate effort to embarrass Mr. Guttmann and to extract a larger
settlement for Ms. Lasater."
The firm hired Evan Miller,
an Employee Retirement Income Security Act partner at Jones Day (who
was formerly at Hogan & Hartson) and Hogan & Hartson ethics partner
John Keeney Jr., to look into Lasater's allegations. Both lawyers
concluded there was no wrongdoing on the part of the firm.
Which isn't to say there
were no problems. "I wish that we had been more scrupulous with the
paperwork," says Robert Brager, managing partner of Beveridge &
Diamond, "because then this wouldn't be an issue.
"The firm," he adds, "is
behind John 1,000 percent."
Signing Your Wife's Name
Guttmann is an
environmental litigation partner focusing on commercial and
securities cases. According to a court document filed by Lasater, he
is the billing partner for the firm's largest client, Sunoco Inc.
Lasater cites his high profile as an incentive for the firm "not to
have to report itself for disciplinary proceedings under the
affirmative whistle-blowing obligations."
In 1995, Guttmann was
tabbed by The American Lawyer as one of the 45 best lawyers under 45
years of age. At the time, Guttmann was serving as managing partner
of the burgeoning environmental firm. When he stepped down at the
end of his six-year run in January 1996, he left behind a record of
tremendous growth. Under Guttmann's guidance, Beveridge & Diamond's
head count and profits doubled, jumping to 60 lawyers and gross
revenue of about $60 million.
But it was also during this
period that Guttmann served as one of three trustees to the firm's
401(k) plan. While a trustee, he took out three loans from his
401(k) over a three-year period beginning in 1992. In total,
Guttmann borrowed $103,693 from the retirement plan. But taking
those loans required spousal approval. And because of what the firm
acknowledges is "sloppy bookkeeping," there is now a dispute over
whether that approval was ever obtained.
Lasater claims she had no
knowledge of the three loans. She says it was only through discovery
during the divorce proceedings that she came across copies of three
promissory notes. "He took money out of our account without my
consent," Lasater says. "I don't know where that money went." While
she acknowledges that the first and third loan appear to have her
signature, she maintains that the second loan, for just under
$33,000, does not have her signature. About that fact, there appears
to be no dispute.
According to an August 2007
deposition, Guttmann says he wrote his wife's signature on the
promissory note dated April 1994, but contends it was with her
blessing. She insists that's not the case. "I haven't the faintest
idea," said Guttmann, when asked in his deposition if he was aware
of any other 401(k) participants at the firm receiving loans without
the paperwork being done first.
Further clouding the matter
is the fact that records show that the effective date of the loan
was in December 1993, but that the promissory note wasn't signed by
the firm administrator until February 1994. And Guttmann did not
sign the loan document for both himself and Lasater until April
1994. Beveridge, who was then a trustee of the firm's 401(k)
program, signed his name without dating his signature. Beveridge
declined to comment for this story.
These points in particular
drew Judge Thompson's attention.
"It's certainly not Ms.
Lasater's signature, and it's a little fuzzy whether she consented
or whether he just forged it," Thompson said during the Sept. 24
court hearing, according to a transcript. "What does that mean? That
means he [Guttmann] is committing acts of moral turpitude which
could affect his license to practice. ... And if the law firm
through the 401(k) and its trustees hasn't done what they were
supposed to do, guess what, the law firm is now liable, OK?"
An 'Alternative'
Investment?
Beveridge & Diamond was
made aware of the loan dispute in a letter Lasater sent to the firm
in December 2006. The firm responded on Jan. 7 with a letter from
its general counsel, Cynthia Lewis, saying it would look into the
allegations.
The firm then hired Jones
Day's Miller to investigate, and he concluded that there were no
ERISA violations. In a letter to Lasater sent in March, Miller said
the loan had been paid back in full and at a reasonable rate of
interest. Miller added that "any adverse effect on the value of Mr.
Guttmann's 401(k) plan account would be both speculative and
trivial. And, in any event, the statute of limitations on ERISA
violations you assert has long since expired."
Miller says that prior to
being withdrawn, the money Guttmann took from the 401(k) plan was
invested in treasury bills and money markets, which provided the
investment return of roughly 3.8 percent. The loans Guttmann repaid
had an 8 percent interest rate.
"It becomes an alternative
investment that, at the end of the day, had more money in it as a
consequence of the loan being at 8 percent," Miller says. "Ms.
Lasater actually saw her interests as a contingent beneficiary
enhanced."
But Lasater says she does
not know what Guttmann did with the money he borrowed.
ERISA lawyers agree that
there appears to be no violation by Guttmann, but there is
puzzlement over the loan being approved before Guttmann signed the
promissory note.
"It would seem odd that a
firm would permit the execution of a promissory note well after the
loan had been executed to the participant," says Kenneth Robbett, an
ERISA lawyer at Robbett & Robbett.
Accounting for an Affair
For Lasater, the issues
aren't limited to Guttmann and the disputed loans. Dean "Holly"
Cannon, a partner at the firm and managing partner from 1996 through
the summer of 2001, admitted in an August 2006 deposition to having
an affair with Guttmann that began in May 2005, six months before
Guttmann filed for divorce, according to a transcript of that
deposition. She is also helping Guttmann pay his soaring legal fees
in the case. According to court documents and copies of personal
checks produced by Guttmann in the litigation and provided to
Legal Times by Lasater, Cannon has contributed more than
$300,000 to help Guttmann pay his lawyers at Ain & Bank. Cannon
declined to comment. According to court documents, Guttmann has
signed promissory notes to repay the money to Cannon.
Lasater alleges in a court
document that Guttmann is borrowing money from Cannon and claiming
it as a loan in order to "reduce both his obligation to support his
family and to negate his equitable obligation to reimburse my legal
fees." Court documents show Guttmann's assets totaling $2 million,
with a net worth of $1.6 million. He claimed a gross monthly wage of
$45,695. Guttmann declined to comment.
Beveridge's Brager, who
says he has been friends with Guttmann for roughly 20 years, has
also been pulled into the fray. According to both Lasater and Brager,
he told a psychologist appointed by the court to determine custody
of the couple's two children that they would be better off with
Guttmann.
"Nancy has accused me of
unethical conduct for talking to the psychologist," Brager says.
"She's threatened to report me to the D.C. Bar. That claim on me
reflects on her."
This isn't the only pending
litigation between Lasater and Guttmann. In August 2005, before
Guttmann filed for divorce, Lasater filed a fraud case against him
in the Circuit Court for Montgomery County, Md., alleging he moved
money to a secret bank account. In that case, Lasater, who is
seeking $2 million in punitive damages, is represented by Timothy
McEvoy, a partner at Odin, Feldman & Pittleman. The case has been
stayed by Judge Ann Harrington until the divorce is settled. The
divorce trial date is Oct. 29.
Moreover, there remains a
question as to whether Guttmann could be subject to an ethics
investigation by the D.C. Office of Bar Counsel.
The investigation done on
the firm's behalf by Hogan's Keeney determined that Beveridge &
Diamond attorneys overseeing the 401(k) did not violate any ethics
laws. "We were responding to a letter that said attorneys who
received the authorization to execute the loan acted unethically,"
Keeney says. "And that's just not true."
But Keeney says he did not
specifically look into whether Guttmann acted unethically. Barry
Cohen, a legal ethics and malpractice partner at Crowell & Moring,
says the D.C. rules of conduct for lawyers are clear. "If he signed
her name without her permission then it would be, for ethics
purposes, a dishonest act," Cohen says. "It would fall under the
category of dishonesty and could result in a censure or a
suspension. We'd need to know the facts and the motivation."
Lawyer's Assistant Wore Wire
for FBI in Fee Scam Case, Defense Claims
By Brett Barrouquere
The Associated Press
New York Lawyer
October 9, 2007
LOUISVILLE, Ky. -- An
assistant to one of three lawyers charged bilking clients of
millions of dollars in a diet drug settlement wore a wire and turned
over notes of meetings to the FBI, a defense attorney said.
Rebecca Phipps, an
administrative assistant to Melbourne Mills Jr., secretly recorded
conversations as early as June 2006 as the FBI investigated how
Mills, William Gallion and Shirley Cunningham handled a $200 million
settlement over the diet drug fen-phen, said Mills' attorney, Jim
Shuffett of Lexington.
"It appears reasonably
certain that an intentional violation of (Mills') right to counsel
occurred and that a hearing is necessary to develop and remedy the
parameters of that violation," Shuffett said.
Gallion and Cunningham, who
are part owners of Preakness winner Curlin, and Mills are jailed in
northern Kentucky pending a trial in January on charges of
conspiracy to commit wire fraud. A civil court has ruled that they
owe at least $42 million to their former clients.
The use of Phipps as an
informant became known in a motion filed last week seeking to
exclude any evidence that Phipps turned over to FBI agent Mary
Trotman. Shuffett wants U.S. District Judge William Bertelsman to
hold a hearing to determine whether the evidence turned over by
Phipps can be used against Mills in a criminal trial set for Jan. 7.
The U.S. Attorney's Office
in Lexington did not immediately return calls seeking comment
Tuesday morning.
Mills wants 63 handwritten
notes and 293 pages of e-mails and other memos Phipps turned over to
federal authorities excluded from evidence in the case. Those notes
involve meetings she attended between Mills and former attorney
William Johnson or current attorneys James Shuffett and Calvin
Fulkerson.
Federal prosecutors turned
over Phipps' information as part of the discovery process. But,
prosecutors also told Shuffett that some of the information provided
by Phipps could be protected under attorney-client privilege.
Typically, attorney-client
privilege does not extend to others who hear conversations between
attorneys and their clients. However, because Phipps was working as
Mills' legal assistant, the privilege also extends to her, Shuffett
said.
According to Shuffett's
motion, Phipps wrote in July 2006 that her attorney, Burl McCoy,
called and told her that an FBI agent on the case wanted her to
attend a meeting at the office of Johnson, who was then representing
Mills in a civil lawsuit regarding the settlement.
McCoy said Phipps has
cooperated with the FBI and will most likely continue to cooperate.
Trotman has testified that
the attorneys, who represented about 440 clients sickened by fen-phen,
settled the case for $200 million.
Trotman said the clients
received $74.8 million from the settlement. Gallion received $30.4
million; Mills, $23.7 million; and Cunningham $20.7 million. A chunk
of the settlement also went to other attorneys and employees
involved in the case.
Bertelsman has said that
millions of dollars are still unaccounted for.
Cunningham, 52, and Gallion,
56, bought Curlin for $57,000 as a yearling through their Midnight
Cry Stable. They sold controlling interest in the horse in February
for a reported $3.5 million to a group composed of Jess Jackson,
founder of Kendall-Jackson wines; Satish Sanan's Padua Stables; and
George Bolton, an investment banker.
Fla.
Prosecutor Charged in Sex Sting Kills Self
Had Been Detained While Allegedly
Trying to Fly to Molest 5 Year Old Girl
Associated Press
October 6, 2007
DETROIT - A federal
prosecutor from Florida accused of flying to Detroit last month to
molest a 5-year-old girl committed suicide in his cell Friday in
federal prison, authorities said.
Assistant U.S. Attorney
John D.R. Atchison was found unresponsive, taken to a hospital and
pronounced dead, said Felicia Ponce, spokeswoman for the Federal
Bureau of Prisons in Washington. A previous suicide attempt was
foiled in September, according to authorities.
Atchison was being held in
a special housing unit in the prison in Milan, about 36 miles
southwest of Detroit.
The administrative
detention area houses all levels of prisoners, and Atchison had a
cell to himself, Ponce said.
She declined to say
how Atchison killed himself or whether he was on suicide watch,
saying the death was being investigated.
Atchison, 53, was arrested
last month at Detroit Metropolitan Airport after weeks of Internet
conversations between the prosecutor and a detective posing as the
mother of a 5-year-old girl, authorities have said.
Carried presents for girl
He was
carrying presents for the girl, including a doll and hoop earrings,
and also had sexual materials, including petroleum jelly.
After his arrest Atchison
was placed on suicide watch, but it was lifted at the request of the
defense, after Atchison assured a U.S. magistrate he wouldn't harm
himself.
Two days later, Atchison
used a sheet in his Sanilac County jail cell to try to hang himself
around 4 a.m. Another inmate yelled out to jailers, who kept
Atchison from hurting himself, according to Sanilac County Sheriff
Virgil Strickler. Atchison was later moved to the Milan prison.
Atchison, a married father
of three, was an assistant U.S. attorney in northern Florida, based
in Pensacola. Gulf Breeze, Fla., residents have described him as a
respected figure who coached girls' softball and basketball in a
park a few blocks from his home.
A statement released Friday
by his lawyer, James Thomas, said Atchison had "done a lot of good
in his life."
"Unfortunately, he is going
to be judged by his most recent charges and what we have read in the
media, and not by the goodness, hard work or by the love of his
family," the statement read.
The statement also said
Thomas would file a request to have the case dismissed.
Authorities have said they
found no cases of child molestation in Florida involving Atchison,
who worked mostly on tax and financial crime cases.
The prosecutor had been
charged with three felonies. The most serious charge was crossing
state lines with intent to have sex with someone younger than 12.
Conviction carries a minimum 30-year prison sentence and a maximum
of life.
Suspended
NY Lawyer Charged
With Selling Old Man's House Out From Under Him
By Anthony Lin
New York Law Journal
New York Lawyer
October 5, 2007
The Queens District
Attorney's Office has announced criminal charges against a suspended
lawyer who allegedly helped sell an elderly man's house out from
under him.
Attorney N. Stephen Sukhdeo
is facing larceny and forgery charges for participating in a scheme
with real estate broker Mohammed Keita.
According to the
prosecutor's office, the two men forged the signature of one of Mr.
Sukhdeo's clients in order to sell his house while he was
hospitalized with a stroke. The house was first sold to a company
owned by Mr. Sukhdeo's brother and then "flipped" to Mr. Keita's
daughter.
Queens District Attorney
Richard A. Brown said the scheme netted its participants hundreds of
thousands of dollars.
Messrs. Sukhdeo and Keita
each face up to 15 years in prison.
Mail
Fraud Scheme Leads to Guilty Plea;
Lawyer Admits He Orchestrated Plot to Defraud Companies
By Jeff Coen
Chicago Tribune
September 28, 2007
A Chicago attorney pleaded
guilty to mail fraud charges in federal court Thursday in connection
with a scheme to cheat insurance and rental car companies by staging
phony traffic accidents.
Gerald Penovich
acknowledged in a plea agreement that he instructed and directed
some of those involved in the plot, which involved purposely
colliding vehicles and filing false claims and bogus medical bills.
He was the last of six
defendants in the case to plead guilty, and all are to be sentenced
by U.S. District Judge Amy St. Eve in December. Penovich acted as
his own lawyer in the case, court records show. A call to his law
office Thursday was not immediately returned.
Prosecutors said leaders of
the scheme recruited players, orchestrated the fake accidents and
directed the filing of false reports.
Those taking part allegedly
were told to consult with Penovich and others about making false
claims, and they were instructed to visit medical clinics that were
in on the scam. Fraudulent medical records were created at those
facilities, according the plea agreement, and fraudulent insurance
claims were filed with the victimized companies.
In one 1998 incident,
Penovich filed a personal injury claim of $64,000 and a damage claim
of $9,750 with Avis Rent a Car, court records show.
Avis eventually paid out
$24,000, according to the plea agreement, based in part on bogus
bills created by the Devon Family Medical Center.
In a second incident the
next year, Penovich allegedly helped the schemers after a staged
two-car crash. Penovich was accused of filing claims for $25,000
with Enterprise Rent-a-Car and an insurer, which were settled for
$13,000.
Defendants associated with
the Devon Family Medical Center generated false treatment records in
that incident as well, court records show.
Prosecutors are expected to
recommend Penovich be sentenced to between 27 and 33 months in
prison. The maximum penalty for the two counts of mail fraud
Penovich has pleaded guilty to is 10 years in prison.
I Covered
up Church Porn: Att'y
Associated Press
New York Post
September 28, 2007
A prominent Connecticut attorney admitted yesterday that he
destroyed evidence in a child pornography investigation at a
Greenwich church.
Philip Russell
pleaded guilty in federal court in Bridgeport to one count of
misprision of a felony, which means he had knowledge of a felony but
didn't report it.
Russell was charged Feb. 16
with destroying a computer that contained child pornography at
Christ Church in Greenwich.
Russell, a former attorney
for the church, is accused of obstructing an FBI probe that led to
the January conviction of the church's music director, Robert Tate,
for possessing child pornography.
Former President George
Bush attended the church while growing up, and funeral services for
his parents were held there.
Russell was released on
$100,000 bond and faces eight to 14 months in prison.
"I just want to make
perfectly clear how sorry I am for what I did in this case," he said
yesterday.
NY Lawyer
Accused of Saying He'd Make Charges
"Go Away" as Comehither Line
By Joel Stashenko
New York Law Journal
New York Lawyer
September 28, 2007
A special prosecutor will
investigate a woman's claim that a part-time public defender
promised he would make her drug case "go away" if she had sex with
him.
Latoya Gorton contends she
had sexual encounters with attorney Matthew Swedick at his law
office in Albany while he represented her. Mr. Swedick was assigned
Ms. Gorton's case after she was arrested for having 39 grams of
crack cocaine and $10,000 in a dwelling she shared with her
boyfriend. In June, Ms. Gorton pleaded guilty to fifth-degree
criminal possession of a controlled substance under a plea agreement
that carried a two-year prison sentence.
Albany County Judge Thomas
A. Breslin allowed her to withdraw her plea last week after her
allegations against Mr. Swedick surfaced through her attorney,
William Martin of Brooklyn.
Another Albany County
judge, Stephen Herrick, appointed attorney Michael Koenig to
investigate Ms. Gorton's charges after District Attorney P. David
Soares of Albany removed himself from the case.
Mr. Swedick, who has been a
part-time public defender in Albany County since 1999, has been
placed on administrative leave with pay, according to county
spokeswoman Kerri Battle. Officials are also reviewing his actions
in a personnel inquiry separate from Mr. Koenig's, Ms. Battle said.
James E. Long, Mr.
Swedick's attorney, said the allegations are false. Mr. Long said
that as a public defender, Mr. Swedick was in no position to make
the charge against the woman "go away," as she contended.
"It's absurd," Mr. Long
said.
NY Lawyer Disbarred for Treating
Clients Like "Commodities"
By Anthony Lin
New York Law Journal
New York Lawyer
September 28, 2007
The Appellate Division,
First Department, has
disbarred a Manhattan personal injury
lawyer for a litany of misconduct, including paying a
non-lawyer "runner" to refer cases to him.
Richard Boter had pleaded
guilty in Nassau County to misdemeanor charges relating to that
scheme, but the Manhattan appellate court noted that Mr. Boter, 32,
had also faced a wholly separate disciplinary proceeding charging
him with 51 counts of professional misconduct. These included
presenting his clients with overreaching retainer agreements,
settling cases without his clients' consent, falsifying clients'
signatures on documents and lying to clients to convince them to
withdraw disciplinary complaints.
Mr. Boter also allegedly
commingled client funds with those of his practice.
In disbarring him, the
court noted that though the lawyer "knew at the time that his
actions were illegal and wrong, he displayed no remorse and seemed
insensitive to interests of and risks to his clients, and he
considered personal injury law to be a competitive 'business' to be
expanded through referrals, with clients treated as commodities."
Ex-top
Lawyer Robles Faces Prison
By Jay Weaver
The Miami Herald
September 19, 2007
Dressed
in a drab prison uniform, once high-flying lawyer Louis Robles
pleaded guilty in federal court in Miami to charges of stealing
$13.5 million in settlements from thousands of elderly clients
ailing from exposure to asbestos.
Robles, 59, who lived in
a Key Biscayne mansion before his legal empire collapsed, could
spend his golden years in federal prison.
The disbarred personal
injury attorney
faces up to 15
years behind bars on three
mail fraud
convictions. He must also forfeit the asbestos
settlements -- though
prosecutors could only recover $1.1 million
U.S. District Judge Alan
Gold accepted Robles' plea deal on the brink of trial, saying it
was ''more appropriate'' than previous deals that had limited his
ability to punish him more harshly. The earlier deal required
Robles to plead guilty to two mail fraud offenses, which carried a
maximum 10-year prison sentence.
His sentencing is set for
Dec. 4. Gold revoked his $1 million bond and placed him in the
federal detention center last spring after Robles had spoken with
his girlfriend about fleeing.
During Tuesday's hearing,
Robles said nothing beyond declaring his ''guilty'' plea and
responding ''yes'' to standard questions about the plea from the
judge. His defense lawyer, Hector Flores, also said little. Any
apology from Robles would come at his sentencing.
Prosecutors portrayed
Robles as a scoundrel who defrauded about 4,400 clients by
pocketing millions in asbestos settlements to pay for a lavish
lifestyle: a 9,000-square-foot home on Biscayne Bay, ski
properties in Telluride, Colo., and leased apartments in Los
Angeles and New York, which he used for his ventures into the
motion picture and recording industry.
During the 1990s, Robles
and wife, Ruth, now divorced, were spending about $2 million a
year in mortgage payments and living expenses.
Assistant U.S. Attorney
Michael Davis called Robles' modus operandi through the 1990s and
early 2000 period ''an ever-expanding pyramid scheme.'' He stole
asbestos settlements from trust accounts and kept almost all the
money for himself while paying small amounts to some victims,
Davis said.
The ''gap'' between his
client obligations and trust account funds grew at a rate of $1
million annually, Davis said. By September 2002, he had
''misappropriated'' $13,522,159.92 owed to clients, leaving less
than $25,000 to pay them.
Robles allegedly tried to
cover up the theft through sleight-of-hand accounting practices by
charging bogus expenses to clients.
Davis said Robles'
victims, whose claims ranged from a few hundred dollars to
$185,000, were agreeable to receiving a fraction of the money
because they have waited so long -- more than a decade in some
instances. The victims are expected to receive roughly 8 percent
of their total settlements.
Among them: A 79-year-old
widow from Jacksonville, who was going to testify against Robles
at trial. He owed her $177,952.87 but will now get $14,236 under
the payout plan.
''She is living on a
fixed income and has not received any settlement money in many
years,'' Davis wrote in court papers in July. ``She is going blind
and fears that she will die soon without receiving any of the
money owed to her during her lifetime.''
Robles, who was initially
charged in a 41-count indictment, plead guilty to defrauding three
asbestos victims in 2001-02. His victims -- many of whom have died
or are dying from lung-related diseases -- are spread all over the
country.
Both prosecutors and a
private attorney assigned by the Miami-Dade Circuit Court to take
charge of thousands of Robles' cases pushed for the plea deal.
They said there would be no more money to recover from Robles --
other than the $1.1 million frozen after his indictment last year.
Miami attorney Thomas Tew,
who represents Robles' asbestos victims in a class action case,
hailed the final agreement. Said Tew: ``This will mean a lot to a
lot of people who otherwise won't be fully compensated for their
losses.''
Federal Prosecutor Arrested for Making Date
to Have Sex With 5-Year-Old Girl
By David N. Goodman
The Associated Press
New York Lawyer
September 19, 2007
DETROIT -- A U.S.
prosecutor accused of using the Internet to arrange for sex with a
5-year-old girl flew to Michigan carrying sexual materials and
presents for the child, authorities said Tuesday.
John D.R. Atchison, 53, of
Gulf Breeze, Fla., was arrested Sunday at Detroit Metropolitan
Airport after several weeks of Internet conversations between the
prosecutor and a detective posing as the mother of a 5-year-old
girl, authorities say.
Officials said Atchison, an
assistant U.S. attorney in Florida, made the trip anticipating a
sexual encounter but was arrested instead. He was carrying presents
for the girl, including a doll and hoop earrings, and also had
sexual materials, including petroleum jelly, Sheriff Mark Hackel
said.
A federal grand jury added
a charge Tuesday of crossing state lines with intent to have sex
with someone younger than 12. Atchison also faces charges of use of
the Internet to seek illicit sex and interstate travel to engage in
illicit sexual contact. He could face up to life in prison.
Defense lawyer James Thomas
declined to comment after the hearing.
Atchison's boss, U.S.
Attorney Gregory R. Miller, said that his staff was "deeply saddened
by the arrest." He said his office was cooperating with the FBI,
U.S. prosecutors and Michigan investigators and believed that "in
the end, justice will be served."
The status of Atchison's
employment was unclear.
The prosecutor is a married
father of three, and Miller said that the staff was concerned about
Atchison's family. "Our thoughts and prayers go out to them," he
said.
According to an FBI
affidavit, Atchison sent an instant message Aug. 29 to Macomb County
sheriff's Detective Linda Findlay, who was posing as a mother who
was willing to let men have sex with her daughter.
Atchison messaged her that
he was "very much a family man," FBI agent Matthew A. Bowman said.
The prosecutor and
undercover detective held almost daily online chats after that, and
he told her that he wanted to have sex with the young girl, the FBI
agent said.
Federal agents obtained a
search warrant Monday for Atchison's Florida home. There was no word
on what they sought or found.
Also Tuesday, a youth
sports organization in which Atchison is active said it was placing
him on leave until the charges were resolved. Atchison is president
of the Gulf Breeze Sports Association, which runs youth baseball,
softball, cheer leading, soccer, football and basketball programs.
In a statement, the group said he had been involved with the
organization for a decade.
Famous Litigator Pleads Guilty to Defrauding Clients,
Faces Up to 15 Years in Prison
September 18, 2007
By The Associated Press
New York Lawyer
MIAMI -- A once-prominent
attorney who specialized in asbestos lawsuits pleaded guilty Tuesday
to fraud charges involving thousands of former clients and could
face up to 15 years in federal prison.
Louis S. Robles, 59,
pleaded guilty to three counts of mail fraud under an agreement with
prosecutors that requires restitution of $1.3 million be paid to
about 4,400 of his former clients. U.S. District Judge Alan Gold set
sentencing for Dec. 4, with each count carrying a potential
five-year prison term.
Last spring, Robles agreed
to plead guilty, but Gold rejected it because the maximum possible
sentence was 10 years in prison. Gold expressed concern that the
sentence was not long enough, especially considering the restitution
was only a fraction of what Robles allegedly stole from clients.
Prosecutors, however, said
the $1.3 million in a frozen bank account was the only amount that
could be recovered from Robles, who has fallen far from his
once-flamboyant lifestyle. An attorney who once jetted around the
country and was known for his stylish clothes now is being held
without bail at Miami's federal detention center.
Robles once represented
more than 7,000 clients in lawsuits against companies that made
asbestos, which has been linked to cancer and other serious health
problems. Over a 13-year period ending in fall 2002, Robles
collected more than $164 million in about 75,000 lawsuit
settlements, according to court documents.
Reprimand
Sought for Local Attorney
Who Wrote Scare Letter to Ethics Grievant
By Henry Gottlieb
New Jersey Law Journal
New York Lawyer
September 14, 2007
When an attorney-client
relationship turns nasty and litigation seems imminent, is it OK for
the lawyer to send the kind of aggressive letter that attorneys
sometimes write to scare off potential adversaries?
The answer is no, the
Disciplinary Review Board suggests in recommending a reprimand for a
lawyer who wrote such a letter, Harry Levin of Levin & Cyphers in
Toms River, N.J.
Levin's actions violated
Rules of Professional Conduct requiring courtesy to participants in
the justice system, RPC 3.2, and against trying to intimidate the
filer of an ethics grievance, RPC 8.4(c), the board said in an
opinion made public Monday, In re Levin, DRB 07-132.
In a letter sent to
personal injury client Linda DiBella on Aug. 29, 2005, after she
filed a grievance that suggested he mishandled escrow funds, Levin
warned he would sue her and would ask a judge to send her to a
psychiatrist if she pursued an ethics grievance.
"As soon as the complaint
is dismissed by the ethics committee, which it is sure to be, I will
file suit against you and your husband," Levin wrote.
"It is obvious to me that
there is something wrong with you," he continued. "I do not know if
it's a function of some medical condition you have or some other
emotional limitation, but I am not going to stand by while you try
to blemish my reputation."
He concluded, "I am also
exploring seeking court intervention to have you examined by a
physician and psychiatrist. If you are suffering from some ailment
that is affecting your thinking, I want that known by the ethics
committee as well."
The dispute centered on
whether Levin had properly handled a medical lien on a $110,000
crash settlement he had obtained for DiBella and whether he owed her
money he had held in escrow.
DiBella filed an ethics
grievance when the dispute arose in 2004, withdrew it to pursue
negotiations with Levin, and re-filed it when she didn't like his
proposed resolution.
An investigator for the
District IIIA Ethics Committee in Ocean County found the grievance
over the escrowed money to be without merit. The panel dismissed a
formal complaint prompted by the letter.
What's more, although the
DRB reinstated the ethics case prompted by the letter, it found
credibility problems with the client and the members of the client's
family, saying they "claimed an ill-fitting fragility" in portraying
their relationship with the lawyer.
Yet credibility and
motivation didn't matter because the letter was unethical on its
face, the DRB concluded, stating, "That respondent's letter was
discourteous is unquestionable. Moreover, it contained threats of
lawsuits and of court-ordered psychiatric examinations, threats that
had the obvious purpose of frightening DiBella into withdrawing her
grievance."
"The only inference to be
drawn was that respondent's pledge to sue DiBella and her husband
was intended to either frighten or bully her into abandoning her
grievance," the DRB said.
Levin's lawyer, Frederick
Dennehy of Wilentz, Goldman & Spitzer in Woodbridge declined to
comment except to say he would ask the state Supreme Court to
reverse the DRB decision.
The defense argued that
Levin's letter was prompted by frustration over the client's refusal
to recognize that the lawyering was proper. By Levin's reckoning,
the filing of the grievance, its withdrawal and its refiling was
evidence of an ongoing dispute with a tough-minded client that could
end up in court.
As Levin put it in a
certification, "While the letter certainly demonstrates extreme
frustration it is not unethical. In fact, it is no different than
letters write every minute of the day, advising the claimant of a
vociferous defense to baseless charges."
Besides warning lawyers to
keep their fingers on the edit button when venting their anger, the
DRB opinion serves as a reminder that the lawyer-client relationship
can be worse than a war between adversaries.
Take, for instance, what
DiBella told the ethics committee.
"She recalled that on one
occasion he became so upset with her that he had 'pulled out of his
pocket a whole bunch of needles, and he goes, because of clients
like you, that's why I have to take these,'" the DRB said. Levin,
who takes insulin shots for diabetes denied the story.
During the dispute, Levin
called in a policeman turned private investigator to dig up
information on the DiBellas. They had "constantly bragged about
getting over on other people and filing lawsuits and claims against
others," Levin told the district ethics committee.
"He also wanted to use the
same lawyer skills against the DiBellas that he had used so
effectively to litigate their claims for them," the DRB said.
Levin said he halted the
investigation after a week because the detective called on DiBella's
son's fiancée, which went beyond the operative's instructions to
make a records search only.
Levin's former associate,
Laura Nunnink, now of November, Nunnink & Napoliello in Glen Rock,
told the ethics committee that DiBella was one of the most difficult
clients she had ever met and had claimed to be a "witch" who could
read people's minds. DiBella later said she was joking.
Lawyer
Found Naked at Courthouse
With Girl, 14, Pleads No Contest
By The Associated Press
New York Lawyer
September 11, 2007
PHILADELPHIA -- A defense attorney who was found naked with a
14-year-old girl in a city courthouse pleaded no contest to charges
of sexually assaulting the teen and five other girls.
Larry Charles, 50, entered the pleas on Monday, the day his trial
was scheduled to begin.
Authorities have said a sheriff's deputy making his rounds in the
courthouse on Jan. 15, Martin Luther King Jr. Day, looked into a
lawyers' lounge and discovered Charles and the girl.
Charles, who often worked in the courthouse as a criminal defense
attorney, was charged with rape and related offenses in that case.
After his arrest, five other girls came forward and testified
that Charles assaulted them. Some of the girls testified they were
assaulted multiple times from 2000 to the time of Charles' arrest in
January 2007.
The girls were ages 5 to 10 at the time of the alleged attacks
and are now ages 11 to 17. They testified the assaults occurred in
motels, Charles' law offices, safe deposit box rooms at banks, and
in the lawyers' lounge and a court anteroom.
Charles was charged in those cases with multiple counts of rape,
sexual assault, corruption of a minor and other charges. He pleaded
no contest to all the counts.
After entering the no contest pleas, Charles' bail was revoked
and he was sent to prison, pending his sentencing on Dec. 20.
Prosecutors said they plan to recommend a sentence of 25 to 50 years
in prison.
Three of the six girls are sisters, one girl was a cousin of
theirs, and the two other girls are sisters, Assistant District
Attorney James Carpenter said.
"The defendant befriended their families and started gradually
conditioning them to be molested" and eventually escalating to rape,
Carpenter said.
An attempt to reach Charles' lawyer, Angelo L. Cameron, for
comment was not successful. A woman answering the phone at his
listed office telephone number said that he did not live there, then
hung up.
Husband-and Wife NY Attorneys Busted in Fraud
By Daniel Wise
New York Law Journal
New York Lawyer
September 10, 2007
A husband and wife who practiced together in lower Manhattan at
Christo & Associates were indicted Friday on charges of counseling
Albanian clients to lie to immigration authorities in order to
obtain political asylum.
Both James Christo and his wife, Remila Christo, have posted the
$100,000 bail that Southern District Judge Richard M. Berman set for
them.
The couple were charged with helping clients concoct fraudulent
stories and evidence to support their asylum claims. James Christo's
lawyer, John W. Mitchell, said his client "is innocent and intends
to vigorously fight this case."
Ex Prosecutor Admits Sex With Judge in
Courthouse,
Loses License for 3 Years
By The Associated Press
New York Lawyer
September 10, 2007
CASTLE ROCK, Colo. -- A former prosecutor faces up to a three-year
suspension of her law license after admitting to having sex at the
Douglas County courthouse with a judge before whom she prosecuted at
least two cases.
Laurie Hurst, 29, admitted misconduct and agreed to a three-year
suspension, with the understanding she would serve only serve six
months with the rest of the suspension stayed upon successful
completion of 2½ years of probation, according to documents
submitted Thursday to the Colorado Supreme Court's Presiding
Disciplinary Judge William Lucero.
Lucero will decide whether to accept the recommendation from a
panel of lawyers.
Hurst, previously known as Laurie Steinman, was fired on Dec. 22.
Grafton M. Biddle, 57, resigned his position after Hurst was fired.
A complaint filed in April said the affair began in the spring of
2006. Both admit to having sex in the judge's chambers and "on a
number of occasions Judge Biddle would 'sneak' into the women's
shower facilities in the courthouse early in the morning," the
complaint said.
A message left after business hours for Hurst was not immediately
returned.
Allegations of misconduct in Hurst's case include misuse of
judicial officer chambers, disrepute upon the judiciary and the
district attorney's office, and potential tainting of bias in the
two trials.
Biddle's case is still pending.
Lawyer
and Two Judges He Bribed Are Sentenced to Prison
Holbrook Mohr
Law.com
The Associated Press
September 10, 2007
A prominent attorney and
the two Mississippi judges he bribed for favorable rulings were
sentenced Friday to several years each in federal prison.
Paul Minor, a once highly
regarded attorney who amassed a fortune from asbestos, tobacco,
medical malpractice and car safety cases, was ordered to serve 11
years in prison. He also was fined $2.7 million and must pay
restitution.
In handing down the
sentence, Southern District of Mississippi Judge Henry T. Wingate
told Minor: "You distinguished yourself in the practice of law.
Speaking metaphorically, Lady Justice must be sobbing."
Minor and his
co-defendants, former judges Wes Teel and John Whitfield, will
appeal their convictions, according to Minor's lawyer, high-profile
Washington attorney Abbe Lowell.
"The various decisions
Judge Wingate made will keep the appeals courts busy for a long
time," he said on the courthouse steps.
The three men have long
claimed they were the victims of a Republican vendetta because of
Minor's support of Democratic causes. The attorney acknowledged
guaranteeing loans for the two judges, but claimed he was only
helping friends and expected nothing in return.
Dave Fulcher, one of the
federal prosecutors in the case, said the sentence reflects the
seriousness of the crimes.
"The defendants put justice
for sale and the sentence is a deterrent to anyone who might
consider corrupting the judicial system," Fulcher said.
Mississippi Supreme Court
Justice Oliver Diaz Jr., who was acquitted in the bribery scheme in
2005, echoed the sentiment that the prosecution was politically
motivated.
"When the federal
government begins to politically prosecute, everyone should be
afraid," said Diaz, who served seven years as a Republican in the
state House of Representatives before becoming a judge.
In the 2005 trial, the jury
failed to reach verdicts on some charges against Minor, Teel and
Whitfield, so they were retried in March. Minor was convicted on 11
charges including racketeering and bribery. The two judges, who
handled trials in coastal Harrison County, were convicted of mail
fraud and bribery.
On Friday, Whitfield was
sentenced to more than nine years in prison and fined $125,000. Teel
was sentenced to nearly six years in prison and he and Minor were
ordered jointly to pay $1.5 million in restitution to USF&G
Insurance Co. That amount involved a settlement reached in Teel's
court between the insurer and one of Minor's clients.
Minor was convicted of
guaranteeing $140,000 in loans to Whitfield in 1998, then using
cash, a third party and a backdated promissory note to conceal that
Minor paid off the loan. Whitfield awarded Minor's client $3.6
million in a lawsuit. The Mississippi Supreme Court later reduced
the award to $1.6 million.
Minor was also accused of
guaranteeing a loan of $24,500 to Teel the same year. Prosecutors
said Teel forced through a $1.5 million settlement in one of Minor's
cases before his court.
During the sentencing
hearing, Minor thanked Wingate for jailing him last year when his
bond was revoked, in part for excessive drinking, because that time
in jail helped him confront his alcoholism.
The judge gave Minor credit
for the year he has served but said he could not give Minor
leniency. "The crimes for which you've been convicted are just so
great to a system of justice," he said.
Teel and Whitfield asked
for short sentences because of family obligations. Teel's wife has
multiple sclerosis. Whitfield, who divorced his wife before she died
last year, has a son in school.
The judge allowed the two
men to report to prison Dec. 27 so they would have time to get their
affairs in order.
Dad on
the Lam: Missing Lawyer Stuns Partner-Son
With Criminal Confession, Advice, and Farewell
By Douglas S. Malan
New York Lawyer
The Connecticut Law Tribune
July 30, 2007
The letter is part confession, part apology and part practical
advice. It is shocking in its honesty.
"I have embezzled funds
from my clients," business law attorney Jonathan Hoyt wrote to his
son, attorney Christopher Hoyt. "Like most lawyers who fall into
this trap I always did it with the idea that I would repay the funds
but of course once I started down this slippery slope there was
nothing but failure waiting for me at the end."
The letter is dated July 7,
one day after Jonathan Hoyt, 58, was last seen in The Hoyt Law
Group’s Clinton office, according to police. As of late last week,
he was still missing. Clinton police are investigating his
disappearance. Hoyt’s tan 1999 Lexus 300 four-door sedan was found
by police on July 17 in a private parking lot near the Intermodal
Transportation Center in Bridgeport.
On July 20, Middletown
Superior Court Judge Julia L. Aurigemma accepted the state
disciplinary counsel’s application to immediately suspend the elder
Hoyt’s law license. A trustee has been appointed to take over the
firm’s client files.
Fatherly Advice
Hoyt, who resides in
Westbrook, was admitted to the state bar in 1974, a year after
graduating from Southern Methodist University School of Law. His
Martindale-Hubbell profile states that his practice provides "a full
range of legal services for commercial transactions."
Hoyt was respected enough
in his field that he gave seminars on topics such as international
taxation and limited liability corporations.
But he also had his
troubles. In his letter, Hoyt makes reference to an illness, which
appears to be depression.
The past few years have
also been littered with his own personal divorce, foreclosure and
bankruptcy proceedings. And Assistant Disciplinary Counsel Frank P.
Blando noted in his application for the suspension of Hoyt’s law
license that Hoyt is under investigation for $800 worth of
overdrafts to his Interest on Lawyers Trust Account.
In the letter, Jonathan
Hoyt advises his son, who is based in The Hoyt Law Group’s office in
the Empire State Building in New York, on how Christopher Hoyt might
continue his law practice.
"Once you receive this
letter, you will have to make arrangements to come back to the
office and start working on the mess I have left you," the letter
states. "You will need someone with a clear mind to advise you as to
how to wrap up the Hoyt Law Group, LLC."
The elder Hoyt added: "I
think in most cases [of defrauded clients] our malpractice policy
and surety bonds will compensate the victims. My recommendation
would be to dissolve the Hoyt Law Group LLC and have you practice
under your name only in [New York City] or join a firm."
In his letter, the elder
Hoyt listed his victims. "Deceived her," is the notation next to the
name of a woman from whom Jonathan Hoyt took funds after a real
estate closing in Seattle. Also listed is a trust for two minor
children. "There are surety bonds so they should be compensated,"
Hoyt wrote, referring to the children’s trust.
‘Totally Out Of Character’
Howard M. Gould, of Gould &
Gillin in Old Saybrook, described Hoyt as a "very conservative,
standard professional transactional attorney," and called his
disappearance and his embezzlement confession "very surprising."
"The reaction you got from
me is the reaction police are getting from everyone," Gould said.
"There was not the slightest clue that any of this was in the works.
It seems totally out of character."
Gould said his office has
consulted two potential clients who lost money in dealings with
Hoyt. He said he has "reason to believe" that federal authorities
are involved, based on his discussions with local police.
Michael J. Sweeney, of
Crosby & Cronan in Madison, is serving as trustee for Jonathan
Hoyt’s clients. Sweeney said he has "no idea" how much money the
elder Hoyt embezzled. He said computer hard drives from the Hoyt Law
Group are in the Clinton Police Department’s possession, and he
planned to submit a written request to the local state’s attorney’s
office to obtain a copy of the hard drive.
Christopher Hoyt contacted
Statewide Bar Counsel Michael P. Bowler twice in the last two weeks
to provide information. In one letter to Bowler, the younger Hoyt
said he wanted to "request instructions on how to proceed in order
to protect existing clients and the law firm from any additional
harm." In another letter, Christopher Hoyt states that his father
"suffers from clinical depression and is under psychiatric care."
The older Hoyt also has a
recent history of legal problems. In March 2007, he and his wife
Ellen B. Hoyt filed for Chapter 7 bankruptcy in New Haven with
creditor debts of nearly $280,000 and debts to the Internal Revenue
Service and state of Connecticut totaling nearly $29,000.
The bankruptcy filing came
eight months after a foreclosure on a property in Durham and almost
a year after the couple filed for divorce, court records reveal.
The bankruptcy case was
dismissed by Chief U.S. Bankruptcy Judge Albert S. Dabrowski on
April 26 when Hoyt failed to file certain required documents. The
day before, the couple’s divorce was finalized. Christopher Hoyt did
not return a telephone call by press time last week. But in a short
to-whom-it-may-concern letter, it’s clear that the father was trying
to preserve his son’s career and reputation.
"I, Jonathan Hoyt, am
solely responsible for the thefts that have happened concerning The
Hoyt Law Group, LLC Connecticut’s office," it states. "My assistant
Melinda Winchell and my son, Christopher, had no knowledge of these
thefts and embezzlements."
Litigious
NY Lawyer Barred From Suing on
Her Own Behalf Says She Is Victim of Judicial Conspiracy
By Mark Fass
New York Lawyer
New York Law Journal
July 18, 2007
After filing 16 lawsuits on her own behalf - eight pro se and eight
using seven various law firms - a Manhattan solo practitioner has
been barred from initiating litigation as a party-plaintiff.
In throwing out Eleanor
Capogrosso's legal malpractice action against the attorney she hired
to litigate a medical malpractice claim, Manhattan Supreme Court
Justice Debra A. James also issued an order requiring Ms. Capogrosso
to receive approval from an administrative judge before filing
future actions or motions on her own behalf.
"Though a review of the
record shows that plaintiff has flirted with placing her own license
to practice law in jeopardy, of more moment is her pattern of
commencing frivolous and repetitious actions," Justice James wrote
in
Capogrosso v. Kansas,
112291/06. "Based on a pattern of vexatious conduct and repetitive
litigation and proceedings brought by plaintiff . . . this court
grants a protective order prohibiting plaintiff from initiating any
further litigation as party plaintiff without prior approval."
Ms. Capogrosso graduated
from the Quinnipiac University School of Law in 1987. She practices
transportation law from her office on 42nd Street.
Last year, she initiated a
pro se legal-malpractice claim (one of five such actions recently
filed by Ms. Capogrosso in New York state courts) against solo
practitioner Tina Kansas. Ms. Capogrosso claimed Ms. Kansas'
negligence resulted in the dismissal of one of her two medical
malpractice claims.
Justice James dismissed the
case against Ms. Kansas on statute of limitations grounds. After
reviewing state court records, the judge also barred Ms. Capogrosso
from pursuing any further claims without the "prior approval of the
Administrative Judge of the court in which she seeks relief."
Justice James noted that of
the 15 cases filed by Ms. Capogrosso between 2002 and 2006, only one
proved meritorious - a landlord-tenant claim against Ms. Kansas, who
was once also her landlord.
Justice James cited Ms.
Capogrosso's challenges to "the integrity of at least three judges"
- including Justice James - and a 2003 decision, Capogrosso v.
Hospital for Special Surgery, 112075/02, in which Supreme Court
Justice Eileen Bransten stated that "Capogrosso narrowly escapes
sanctions this time but hopefully will nonetheless learn that she
must follow court orders."
Reached by phone yesterday,
Ms. Capogrosso detailed the 16 cases for which she is listed as a
plaintiff on the state court Web site.
The actions include the
five legal and two medical malpractice claims, two landlord-tenant
actions, four suits against various government agencies and two
suits involving money allegedly owed to or by Ms. Capogrosso. Ms.
Capogrosso could not recall any details about the final case,
Capogrosso v. Dept. of Health, 101002/02, in which she appeared
pro se.
The attorneys and firms
that have represented her include: Mark Kessner; Jonathan M.
Landsman; Lutfy & Santora; Fried & Epstein; Calabro & Fleishell;
D'Ambrosio & D'Ambrosio (twice); and Ms. Kansas.
John W. Fried of Fried &
Epstein said his firm represented Ms. Capogrosso in two cases, an
insurance matter that was settled and an action against New York
City's Department of Investigation. (Because the insurance case was
filed in federal court, it is not included among the 16 suits listed
on the state's Web site.)
Mr. Fried noted that his
firm is now a defendant in a sixth legal malpractice case filed by
Ms. Capogrosso, this one in New Jersey state court.
The remaining attorneys who
have represented Ms. Capogrosso either could not be reached or
declined to comment.
"This has a lot to do with
a lot of things other than [the] 16 lawsuits," Ms. Capogrosso said.
Namely, Ms. Capogrosso
claimed, the repeated filings are a by-product of a judicial
conspiracy against her, borne from her filing of complaints against
Justices Eileen A. Rakower and Carol Robinson Edmead.
"Ever since I filed a
judicial complaint against Rakower and then Edmead, every case that
I've had has been dismissed, a file has been missing from the
courthouse [and] judges aren't disclosing complaints I made to the
advisory committee on their judicial questionnaires," Ms. Capogrosso
said.
"When a lawyer tries to
complain about actions of a judge, they will face such retaliation
that they will try to run you out of business. To every lawyer out
there: Do not complain about a judge."
Justice Edmead provided a
single exception to her order, allowing Ms. Capogrosso to appeal the
order itself without prior approval. Ms. Capogrosso said that she
intends to avail herself of that exception.
Capogrosso v. Kansas
will become Ms. Capogrosso's fourth case pending before the
Appellate Division.
Ms. Kansas could not be
reached for comment.
Lawyer
Indicted For Paying More
Than $3M in Bribes and Kickbacks
By Brenda Sapino Jeffreys
New York Lawyer
Texas Lawyer
July 5, 2007
Warren Todd Hoeffner, a
partner in Houston plaintiffs firm Hoeffner & Bilek, was named in a
federal indictment that alleges he paid more than $3 million in
"bribes and kickbacks" to two former claims adjustors for The
Hartford Insurance Co. in connection with $34 million in settlements
of Hoeffner's silica-related suits.
Hoeffner and his
co-defendants, Rachel Rossow and John Prestage, the former claims
adjustors for The Hartford, each face one count of conspiracy, one
count of conspiracy to money launder, two counts of wire fraud, four
counts of mail fraud and six counts of monetary transactions with
criminally derived property.
The grand jury indictment,
which was made public on June 27, alleges Rossow received
approximately $2,681,874 in "bribes and kickbacks" and Prestage
received about $764,476 in "bribes and kickbacks." The indictment
also notes that Hoeffner received about $5,366,839 in attorney fees
from the settlement.
Hoeffner, 42, pleaded not
guilty to the charges at an arraignment on June 27 before U.S.
Magistrate Judge Frances H. Stacy of the Southern District of Texas.
He was released after posting a $100,000 deposit on a $250,000 bond
Well
That's Hardly Playing Fair: Firm Asks Bank About Buying Opposing
Counsel's Mortgage
By Henry Gottlieb
New York Lawyer
New Jersey Law Journal
July 5, 2007
A federal judge denounced
lawyers at Hackensack's Cole, Schotz, Meisel, Forman & Leonard on
Thursday, and threatened them with sanctions, for trying to meddle
with an opposing attorney's personal finances.
Two Cole, Schotz partners admitted to U.S. District Judge Harold
Ackerman that an associate asked a bank counsel whether a client of
the firm could buy mortgages the bank held on property of litigation
foe Gregg Trautmann of Rockaway.
Such purchases would have made Cole, Schotz's client - a lender
defending itself against six suits brought by Trautmann - holder of
the mortgages on his home and office.
Nothing in the record explained what the Cole, Schotz associate,
or the partner who authorized the inquiry, had in mind.
But Ackerman said he reached the "evil conclusion" that the goal
was to control Trautmann's mortgages so Cole, Schotz's client,
Kennedy Funding Inc. of Hackensack, could "put the squeeze, as we
use that colloquial phrase, on him and on the litigation."
Trautmann said he believed the idea was to have Kennedy Funding
hold his mortgages so it could argue that he lacked the independence
to represent clients suing the company. He asked that Cole, Schotz
be sanctioned and disqualified.
But the firm didn't wait for a ruling. On Friday, it told the
court it was terminating its representation of Kennedy Funding in
the four federal cases in which Trautmann is their adversary.
At Thursday's hearing, the administrative chair of Cole, Schotz's
litigation department, Steven Klein, had apologized to the judge,
calling the inquiry about the mortgages "improper" and "horrible."
He said "it was the worse exercise of judgment that could have been
made."
"It is a blemish which we will obviously work as hard as we can,
as we have for almost the 80 years of our existence, to remedy and
rectify," Klein told Ackerman. He said an internal investigation of
the incident had started at the firm, Bergen County's largest.
Even so, Klein insisted that the call to the bank for information
was proper and that the offense consisted of just one "very bad
question" at the end of the call. He says the firm would never have
condoned the actual purchase of the mortgages. "It would have gone
no further," he said.
Ackerman did not seem mollified and suggested the U.S. attorney
might be interested in the affair.
"I don't know whether it is attempted criminal behavior or not,
but I am going to find out," he said.
"Lawsuits can get awfully
frisky, we all know that, and in the heat of battle I see lawyers
lose it," he said. "But that, I respectfully submit, does not excuse
in any way, shape or form the kind of back alley tactic which has
been described to me and [is] now conceded."
Violated
in the Peeper's Court
Att'y 'Put Spy Cam' on Undressed Staff
By Laura Italiano
New York Post
July 7, 2007
He
hoped to peruse their briefs - and then some.
A Legal Aid Society lawyer
was charged in Manhattan yesterday with sneaking a camcorder
disguised as a clock into the offices of his young female colleagues
so he could videotape them as they changed in and out of their
business suits.
From 2004 until last
October, attorney Peter Barta, 32, switched the motion-activated
device in and out of at least five women's offices in the Legal
Aid's TriBeCa suite, and succeeded in capturing OBJECTION!
Peter Barta
nude images of at least
one of them
prosecutors said.
But the criminal defense
lawyer was eventually outfoxed by his foxy prey.
One of his victims realized
she had a peeping Tom on her hands when she found a picture of the
same mysterious, reappearing clock in a copy of a catalog for The
Sharper Image - under the heading, "Security Camcorder Hidden in a
Clock."
The unnamed woman and her
female colleagues took a closer look at the clock in question, which
was sitting on a colleague's desk - but aimed toward the desk of one
of the women.
When they were able to pop
out its computer memory card and download images the gals alerted
their bosses, who then trained a hidden camera of their own on the
offending device.
For a few days, the cameras
stared down each other.
Then, last Oct. 26, Legal
Aid's camera caught Barta on tape entering the office and removing
his camera-clock.
"It's a betrayal of trust,"
a Legal Aid lawyer said. "We're all colleagues; we work in close
quarters, and there's an assumption of trust."
Barta, a graduate of
Stuyvesant HS and Georgetown Law School, resigned immediately.
"We don't tolerate this
kind of conduct," said Legal Aid Society spokeswoman Pat Bath. "We
wanted him out as quickly as we could get him out."
On Barta's home computer
from Kew Gardens, Queens, prosecutors said they found images of a
female employee's "breasts and buttocks."
Barta faces up to four
years in prison on felony charges of unlawful surveillance. He could
also be disbarred.
Barta was one of 140
lawyers working in Legal Aid's offices at Church and Thomas streets.
He allegedly targeted
younger women - some working their first legal jobs - who were known
to dress in their offices. Insiders explained that the women either
belonged to gyms, or kept their good suits in their offices.
Denied
Entry to Bar, Law School Grad's "Rubber Check" Business Now Called
"Fraud on Court"
By Michael Booth
New York Lawyer
New Jersey Law Journal
July 2, 2007
Robert Triffin, who makes a living of buying bounced checks and
trying to recover as a holder in due course, has resorted to the
courts so often and so perniciously that a New Jersey appeals panel
evidently feels enough is enough.
Though finding his
fabrication of check assignments did not make Triffin liable for
common law fraud, the judges said his actions might constitute a
fraud on the court itself. On Thursday, they remanded the case,
Triffin v. Automatic Data Processing Inc., A-6986-03, to the
trial court for a hearing on the possible imposition of sanctions.
The court noted that
Triffin's conduct is under review by the Essex County, N.J.,
prosecutor and the state attorney general and that "all parties
defending future claims by plaintiff on purchased dishonored checks
are on notice to scrupulously explore the legitimacy of any tendered
assignments."
Triffin's standard practice
is to buy dishonored checks from check-cashing companies and then
present them to the issuing companies. If they refuse to pay, he
files claims against them in New Jersey Superior Court, Special
Civil Part. His targets have accused him, with success, of drafting
phony assignment contracts, often containing signatures of
questionable authenticity. In addition, many of the bad checks turn
out to be counterfeit, stolen, altered or forged, according to court
records.
At last count, Triffin, of
Drexel Hill, Pa., had filed at least 4,000 lawsuits on bad checks,
and the appellate division judges cited 14 separate appeals stemming
from such suits.
Thursday's ruling stems
from Triffin's appeal from a 2004 verdict by an Essex County
Superior Court jury for Roseland, N.J.-based Automatic Data
Processing Inc., the world's largest payroll processor. When Triffin,
acting pro se, sued ADP and others for refusal to pay him as a
holder in due course, ADP fought back with counterclaims of
common-law fraud, RICO and negligence, alleging the checks were
counterfeit and that Triffin knew it.
The trial judge dismissed
Triffin's complaint on summary judgment. On the counterclaim, the
jury found Triffin defrauded ADP because Triffin admitted that
parties selling him dishonored checks had not signed the assignment
agreements -- he in fact pasted scanned signatures on the 12-page
documents.
The jury awarded ADP
$132,600 in compensatory damages and $50,000 in punitive damages on
the common-law fraud claim, which the trial judge reduced to
$5,919.80 in compensatory damages and $17,759.40 in punitive
damages.
But Judges Thomas Lyons,
Jack Sabatino and Edwin Stern vacated the verdict, finding ADP's
common-law fraud claim against Triffin should be dismissed, because
it failed to meet one of the five criteria for common-law fraud:
reasonable reliance by another party.
ADP had decided to fight
the claims without relying on the manufactured assignments. "An
exhaustive review of the record does not demonstrate that defendant
either took, or refrained from taking, steps to protect its
interests based upon the misrepresentation that the assignment
agreements were authentic," Lyons wrote for the panel.
"Our courts have long held,
however, that where there is a civil wrong, there should be a
remedy," Lyons said. "In this case, there has been a wrong in our
view, a possible fraud on the court." He cited R. 1:4-8(a), which
requires that pro se parties like Triffin file authentic documents
with the court.
"Unlike common law fraud on
a party, fraud on a court does not require reliance. Separate and
distinct from court rules and statutes, courts possess an inherent
power to sanction an individual for committing an act of fraud on
the court," said Lyons.
"Therefore, recognizing
that the trial court possesses inherent power to sanction a fraud on
the court, we remand this matter to the trial court for further
proceedings," Lyons said. "Following a hearing, the trial court may
impose sanctions on plaintiff on its own motion, or on the
application of defendant, or both."
ADP's lawyer, Dennis
Kearney, while disappointed with the vacating of the verdict, says
banks and other potential payers should be gratified by the court's
ruling. "The most important thing is that the whole world is on
notice. This guy's been exposed," he says. "The way he does business
is over. The opinion gives every lower court in New Jersey, where
this guy swims, the ability to shoot him down."
Kearney says his client
will not hesitate to ask the judge to sanction Triffin. "We're going
to follow the instructions of the court," says Kearney, of Florham
Park, N.J.'s Day Pitney.
Triffin did not return a
telephone message left at his home, which doubles as his office.
Officials from the Essex
County Prosecutor's Office and the Division of Criminal Justice did
not return telephone calls seeking comment.
Triffin has been sanctioned
before for his check collection practices. In 2004, in Triffin v.
Commerce Bank, a three-judge panel upheld frivolous litigation fees
against him for $5,723. The special civil judge awarded counsel fees
to the bank's lawyers, concluding not only that the clear
unambiguous language of a contract involving the bank barred
Triffin's claim but also that the case law on point was a 1999
appellate ruling titled Triffin v. First Union Bank, N.A.,
319 N.J. Super. 72. The per curiam opinion called this "a fact which
plaintiff was obviously aware of when he commenced this frivolous
suit."
The adjudication of fraud
by the Essex County jury in the ADP case was not Triffin's first. In
the late 1980s, a Pennsylvania court concluded he defrauded a bank
out of almost $100,000 in a check-kiting scheme in 1985. That
ruling, along with other rebukes for ethical breaches and a lack of
respect for the judicial process, led to Triffin, a law school
graduate, being denied admission to the Pennsylvania Bar in 1990. He
was also denied entry to the New Jersey Bar by the state Supreme
Court in 1993 after the character committee found him unfit.
Never
Mind a Slice - Ferry Lawyers Want Slabs of Pie
By John Marzulli
Daily News Staff Writer
June 28, 2007
Attorneys who defeated the
city's attempt to limit its liability in 2003's deadly ferry crash
now want a piece of every victim's settlement.
The move by two law
firms has sparked warfare in legal circles.
The city so far has settled
120 lawsuits for a total of about $28 million in the Staten Island
wreck of the Andrew J. Barberi, which killed 11 and injured scores
of others. Another 64 cases are pending, so the payout to the
lawyers could be in the millions.
The Staten Island firm of
Anthony Bisignano and maritime law experts Dougherty, Ryan, Giuffra,
Zambito & Hession filed a motion in Brooklyn Federal Court yesterday
seeking "a percentage of all sums recovered" - past and future. They
want Judge Edward Korman to decide what the percentage should be.
None of the two firms' own cases have been settled yet.
"The lawyers who filed this
motion should be ashamed of themselves for attempting to obtain a
windfall," said attorney Sanford Rubenstein, who represents five
victims. "Instead of focusing all the energies of the lawyers on
behalf of the clients they represent, there will now be a fee
dispute."
Another lawyer involved in
the litigation said the demand is a "black eye" on the legal
profession.
The city had tried to use
an 1851 maritime law to cap total damages at $14.4 million, the
value of the ferry's hull.
The city is appealing
Korman's decision not to put a cap on damages.
The firm Weisman & Calderon
doesn't intend to fork over a penny of the $9 million settlement it
negotiated for Tina Evans, who lost both legs in the accident.
"Your reluctance to share
your good fortune is disappointing," Bisignano responded, according
to court papers.
NY Lawyer
Admits Ripping Off Elderly Client
New York Lawyer
June 22, 2007
A White Plains attorney
pleaded guilty to stealing $470,143, the proceeds of a 2006
Peekskill house sale, from an elderly client, the Westchester County
District Attorney's Office announced yesterday.
Chase Caro, 49, practiced
in White Plains and New York City, the New York Law Journal reports.
He ignored numerous requests to transfer the money owed after the
payment of litigation related fees, instead using the money for
personal and business expenses, the DA's office said.
He eventually sent the
client a check for $310,000, but it bounced, according to the
district attorney.
Mr. Caro was arrested in
January and has been free on bail; he was suspended from the
practice of law in March. He faces 2 to 6 years in prison on his
plea to one count of second-degree grand larceny.
Restitution in the amount
of $780,000 to the original victim and an additional victim
identified during the investigation will be considered at Mr. Caro's
Oct. 29 sentencing.
Local Lawyer
Dented by New Charges of Staging Auto Accidents
By Henry Gottlieb
New York Lawyer
New Jersey Law Journal
June 22, 2007
New fraud charges were
filed on Tuesday against a West Orange, N.J., personal injury lawyer
and his firm, both under indictment for almost two years on charges
that they used runners and were involved in a phony accident scheme.
An Essex County
grand jury indicted Irwin Seligsohn and Goldberger, Seligsohn &
Shinrod (now known as Goldberger & Seligsohn) on charges they
conspired between 1998 and 2003 to submit insurance claims for a
fake auto accident, the New Jersey Division of Criminal Justice
announced.
The indictment, handed up
June 15, says nonlawyer conspirators reported a hit-and-run accident
to Newark police on July 17, 1998, and met with Seligsohn later to
pursue fraudulent claims with Allstate Insurance Co.
As a result of what the
announcement called the "purported" accident, $18,000 in bodily
insurance claims were submitted to Allstate and $14,500 in personal
injury protection payments were made.
The grand jury returned
three more indictments accusing nonlawyers of staging other phony
accidents in Newark or East Orange.
It is the third indictment
against Seligsohn, 71, of Kinnelon, N.J., in connection with the
same types of activity.
In April 2005, he and
partner Allen Goldberger, now 74 of Livingston, N.J., became the
first lawyers to be charged with violating a New Jersey law that
criminalized the use of runners. In November 2005, they were
indicted on charges of paying runners to solicit people to
participate in staged automobile accidents to collect insurance
money.
The November 2005
indictment included a racketeering charge and sought the forfeiture
of $5 million in financial assets obtained by the Seligsohn firm.
The latest indictment,
which does not include Goldberger, adds specificity to the
allegations against Seligsohn by providing alleged details of the
1998 accident in Newark.
The announcement quotes
Greta-Ann Gooden-Brown, the state's insurance fraud prosecutor, as
saying, "The use of runners has a domino effect on the insurance
industry."
"Runners, in turn, stage
accidents and urge people who are not injured to be treated for
injuries," she says. "They submit false police auto accident reports
and engage in fraudulent conduct which drives up the cost of auto
insurance in this state."
Seligsohn's lawyer, Dennis
Cipriano of West Orange, N.J., says that after extensive discovery,
the case was scheduled for trial in September but will be most
likely be delayed because of the additional indictment.
"There's got to be an end
to these charges," he says.
"Irwin has from the
beginning denied any fraudulent or improper conduct and he has
defended the charges against him and intends to continue defending
the charges against him," Cipriano says.
Local
Lawyer's Sex With Client, Brings
Angry Husband to His Door and Discipline From the Bar
By Douglas S. Malan
New York Lawyer
The Connecticut Law Tribune
June 18, 2007
A Sunday afternoon tryst
with a married client has sullied an Avon lawyer’s otherwise clean
disciplinary record for the first time in his 25-year legal career.
The Statewide Grievance Committee recently approved a conditional
agreement struck between attorney Gary Joseph Greene and the Office
of Chief Disciplinary Counsel under which Greene was reprimanded.
Since the sexual encounter
occurred in January 2006, a new attorney-ethics rule that took
effect at the beginning of this year prohibiting lawyers from having
sexual relations with their clients did not apply to Greene. Rather
the 49-year-old attorney acknowledged, in his affidavit and
conditional admission, that he violated Rule 1.7(b) of the Rules of
Professional Conduct. That rule bars attorneys from representing a
client if that representation "may be materially limited by the
lawyer’s responsibilities to another client or to a third person, or
by the lawyer’s own interests." The new rule, 1.8, prohibits
lawyer-client sexual relations altogether on the basis, according to
commentary accompanying the rule, that they "can involve unfair
exploitation of the lawyer’s fiduciary role, in violation of the
lawyer’s basic ethical obligation not to use the trust of the client
to the client’s disadvantage."
In this case, Greene was
grieved by his client’s husband, Paul Papagna of Simsbury. In his
June 2006 complaint to the SGC, Papagna said he felt "Greene used
his power and trust that my wife [Lisa M. Papagna] had with him that
[then] resulted in the affair they had in his office … ."
In his July 2006 written
response to the grievance committee, Greene denied that he abused
his power or trust to take advantage of Lisa Papagna, or that he
facilitated "an inappropriate relationship with her."
His attorney, Mark H. Dean
of Hartford, told an SGC reviewing panel "[t]his is a case that
involved a one-time incident, and it’s by an attorney who has no
prior disciplinary record." The "incident" cost Greene his marriage,
Dean told the panel.
At the hearing, Greene
promised that a sexual relationship with one of his clients "will
not happen again." He said he was "deeply sorry that my actions have
brought me here. … I had prided myself on being someone who
understood where the line was, and I never crossed it or came close
to it. And in this particular case, I did," Greene conceded.
Not The First Time?
Paul Papagna stated in a
July 2006 letter to grievance officials that he understood from
Greene’s wife, Lisa, that such relationships were actually common
for Greene. Papagna said he spoke to Lisa Greene after he became
suspicious about late-night telephone calls from attorney Greene’s
cell phone, which appeared on Papagna’s caller ID.
"When I first talked to
Lisa Greene and told her what was going on [between their spouses],
her first response was that bastar[d] is doing it again and that he
did the same thing with another of his clients two years into their
marriage," Papagna claimed in his letter. "She then told me that
that was how they [met]. Attorney Greene was married and that she
was also a client. And they were also having an affair."
Neither Dean nor Attorney
Greene returned telephone messages by press time. In his affidavit
and conditional admission, Greene acknowledged there is a
"substantial likelihood that a trier of fact" would find he violated
Rule 1.7(b).
Lisa Papagna retained
Greene in July 2005 for a bankruptcy matter. During that
representation, Greene began asking her about her considerable
amount of medical debt, Lisa Papagna stated in her August 2006
letter to grievance officials.
"I told him of the
situation leading up to the debt, which was the therapy that … I had
due to past [sexual] abuse," Lisa Papagna wrote. "At that point in
our conversation Attorney Greene stated that I could trust him, that
he was not only my attorney but ‘my counselor.’"
After further discussion of
similarly personal issues, Lisa Papagna said she hired him in
December 2005 for a child support matter from a previous
relationship.
"At some point after that
Attorney Greene phoned me at my house … [w]hich I initially believed
to be for professional reasons regarding the support case," Lisa
Papagna wrote to grievance officials. "Attorney Greene told me he
was happy to have a reason to phone me, [and] went on to say that he
had to tell me something else. I asked him what that was, at which
point he stated that while in his office he had an overwhelming
desire to kiss me. I was shocked. This made me feel extremely
uncomfortable and I was unsure of how to respond," she wrote.
At some point, however,
during December 2005, Lisa Papagna apparently began to feel more at
ease with Greene. The attorney told SGC officials that, during that
time, his client asked his secretary if he liked peanut brittle and
also told the secretary that she would "pop in [the office] with a
little something for him." During their telephone conversations,
"she would flirt with me and I reciprocated," Greene stated and Lisa
Papagna confirmed.
Office Confrontation
After the sexual encounter
in late January 2006, Greene represented Lisa Papagna in court on
Feb. 7, 2006, regarding the child support matter. Later that day,
"Attorney Greene called my wife to tell her that he sent his
secretary home because his office lost power, and he wanted her to
come see him …, Paul Papagna maintained in his letter to grievance
officials.
Greene referenced a Feb. 7,
2006, incident in which Paul Papagna "showed up, barged into another
office here in our building and then came into my office and
proceeded to cause a scene" that caused Greene to call the Avon
police.
Paul Papagna wrote that
Greene "lied" to police and "told them that my wife was in the
middle of a divorce and that I barged into his building and caused a
scene because I was a jealous ex-husband." Chief Disciplinary
Counsel Mark A. Dubois noted in his prehearing memo that Lisa
Papagna "generally supports her husband’s account" of the events and
that the couple has "reconciled." A telephone call to Paul Papagna’s
house was not returned.
Greene’s reprimand matches
the discipline handed to Rockville attorney John F. O’Brien in 2005
for a sexual relationship he had with a client. Torrington attorney
Ira S. Mayo was suspended for 15 months in 2005 for making unwanted
sexual advances toward clients who were referred to him by the Susan
B. Anthony Project for abused women.
NY
Attorney Admits Robbing $550,000 From Aunt
By Daniel Wise
New York Law Journal
New York Lawyer
May 31, 2007
A White Plains lawyer
pleaded guilty yesterday to stealing $550,000 from her aunt.
Under a plea agreement,
Shelly Ann Rivera, 40, will be sentenced to 1-to-3 years in prison
on July 11.
Most of the money was
stolen from the proceeds of two home sales Ms. Rivera handled for
her aunt. Ms. Rivera also promised to pay her relative $700,000 in
restitution, though her sentence is not conditioned upon her making
any restitution.
The Westchester District
Attorney's Office insisted that Ms. Rivera agree to compensate her
aunt, Annette Rivera, for losses related to her handling of her
aunt's affairs beyond those stemming from the theft, a spokesman
said.
For instance, the
restitution amount covers a $100,000 down payment the aunt lost when
her niece failed to produce enough proceeds from the earlier sales
to close on a new home the aunt was buying in Riverdale.
Judge
Rejects Ex Lawyer Robles' Plea Deal
By Jay Weaver
The Miami Herald
May. 22, 2007
A frustrated federal judge
on Monday rejected a plea deal that would have sent once prominent
Miami lawyer Louis Robles to prison for 10 years on charges of
stealing more than $13 million from aging clients exposed to
asbestos.
U.S. District Judge Alan
Gold said he thought Robles, 59, deserved more time behind bars
after Gold complained about the ``lack of meaningful sentencing
options.''
The plea agreement,
recommended by the U.S. attorney's office and Robles' federal public
defender, required him to plead guilty to two counts of mail fraud
-- but each count carried a maximum of five years each.
Gold expressed his
dissatisfaction with those limits, especially because there are
about 4,400 alleged victims of Robles but only $1.3 million
available for restitution.
''A number of these people
are not going to receive restitution,'' Gold said.
Robles -- once dubbed the
King of Torts who was later disbarred -- spent almost $2 million a
year on mortgages and other expenses for a Key Biscayne waterfront
mansion, a ski property in Telluride, Colo., and apartments in New
York City and Los Angeles.
The judge gave Robles a
choice Monday -- plead guilty to the 41-count indictment and face up
to 20 years in prison, or withdraw the original plea and face trial.
Robles, represented by
assistant public defender Hector Flores, opted for trial. Gold set
the date for Sept. 4.
Meanwhile, Robles, who once
wore stylish business suits and flew all over the country for his
work, was headed back to the Federal Detention Center in his
khaki-colored prison jumpsuit.
FLIGHT RISK
Last week, the judge
revoked his $1 million bond because Robles' girlfriend reported to
authorities that the defendant had ''discussed with her on two
occasions his obtaining a false passport for the purpose of
fleeing'' South Florida, court records say.
Gold ruled Robles' recent
behavior ''evidenced an increased likelihood of flight,'' the
documents said.
Both federal prosecutors
and a private attorney assigned by the Miami-Dade Circuit Court to
take charge of thousands of Robles' cases urged the judge to accept
the plea deal. They said there would be no more money to recover
from Robles -- other than the $1.3 million frozen by federal
authorities after his indictment last year.
Assistant U.S. Attorney
Michael Davis said ``nobody has turned up any other assets.''
He said Robles' alleged
victims, whose claims ranged from a few hundred dollars to $185,000,
were agreeable to receiving a fraction of the money because they
have waited so long for it -- more than a decade in some instances.
PUBLIC INTEREST
Davis said the recommended
10-year prison term was ``in the public interest.''
''That is a significant
term of imprisonment in a white-collar fraud case, especially for a
defendant who is 59 years old,'' he said.
The U.S. attorney's office
issued a statement backing the deal.
''We believe that the terms
of the proposed plea agreement were fair and just,'' said Alicia
Valle, special counsel to U.S. Attorney R. Alexander Acosta. ``The
plea agreement served two goals: it provided quick restitution to
elderly and dying victims, and ensured just punishment -- 10 years
in prison -- for the defendant's crimes.
'We do not know and cannot
comment on whether Robles' reported attempt to flee the jurisdiction
played a role in the court's decision,'' she said. ``We are prepared
to proceed to trial as directed by the judge, and will present the
evidence to a jury.''
Tom Tew, the appointed
attorney who reorganized Robles' asbestos cases, said he was
disappointed in the judge's ruling.
''My biggest concern was
getting money to these folks,'' Tew said. ``I don't think they were
as concerned about how much time he got as long as justice was
served that he was going to prison.''
Famous
and Disbarred Lawyer's Girlfriend
Lands Him Back in Jail
By Julie Kay
Daily Business Review
New York Lawyer
May 21, 2007
A federal judge has thrown disbarred Miami attorney Louis Robles
back in jail after Robles' girlfriend told the court he was planning
to flee the country before finalizing a criminal plea deal on
charges that he stole millions from his clients.
On May 10, U.S. District Judge Alan Gold in Miami issued an
arrest warrant and ordered Robles' $1 million bond revoked, calling
him a flight risk. Robles, a nationally known Miami mass torts
lawyer, was placed in federal prison May 11, days before Gold was
set to decide whether to accept a plea deal for a 10-year sentence
that was worked out between Robles and prosecutors.
Gold found that Robles may have moved some of his clients'
unaccounted-for funds to foreign countries while traveling abroad
prior to his indictment. In his order, Gold stated he was concerned
about the fact that Robles only has $1 million left out of the $13
million prosecutors say Robles misappropriated from clients, and
that he traveled to foreign countries just before he was indicted.
Robles' girlfriend, named in court records only as "Ms. Wiki,"
reported to his probation officer that over the last two months,
Robles asked her if she could get him and his grandson phony
passports. He also had been talking to a pilot who previously
offered to help him flee, according to the probation officer's
petition.
On May 14, however, Robles' attorney, assistant federal public
defender Hector Flores, filed a motion seeking a review of the bond
revocation, claiming the allegations in the probation officer's
petition are "overstated and lack factual support." He said,
"Counsel believes the Government's own investigation of these
matters supports this conclusion."
According to Gold's order, the office of U.S. Attorney Alex
Acosta had suggested electronic monitoring and home detention for
Robles. But Gold wrote that "no adequate assurance was given prior
to (or during) the hearing that the Defendant even has a place to
reside in the event he was reinstated on bond."
These developments came days before a scheduled hearing today at
which Gold is set to decide whether to accept a plea deal for
Robles. It calls for Robles to serve 10 years in prison and pay $13
million in restitution to victims. But prosecutors say they've only
found $1 million left in Robles' bank accounts and don't know what
happened to the other funds or to the $13 million he received when
he sold his Key Biscayne mansion last year.
The latest allegations against Robles could affect Gold's
willingness to accept the plea deal and put Robles in a position to
stand trial, according to defense lawyers not involved in the case.
Two of the 41 counts Robles faces carry 20-year maximum penalties,
and the remaining counts carry five-year maximum penalties. "The
maximum potential sentence, therefore, provides an incentive for
flight," Gold stated in his order.
Neither prosecutors nor Flores returned calls for comment.
"This could destroy the plea agreement," said Miami criminal
defense attorney Richard Sharpstein, who's not involved in the case.
"This is absolute proof that Louis is out of his mind. If he's
trying to reunite himself with lost money, that can be huge."
ABUSE AND ALCOHOL
Robles, 59, was indicted in May 2006 on 41 counts of mail fraud
and misappropriating $13.5 million in settlements from asbestos
clients.
According to the indictment, Robles used client trust money to
finance movie productions and waste management companies and to make
mortgage payments on a $13 million Key Biscayne mansion and a
Colorado condominium, and to finance an extravagant lifestyle that
included two full-time servants.
At a hearing scheduled for 4:30 p.m. Monday, prosecutors are set
to report on whether Robles' 4,390 victims approve of the plea deal
worked out between prosecutors and Robles.
Late Thursday, Gold issued an order denying Robles' motion for
bond following a hearing May 17. Gold held the hearing after Robles'
probation officer, Urania Salamanca, filed a petition May 9
requesting bond revocation based on Robles' girlfriend's statements
that he was planning to flee.
The petition also stated that Robles' girlfriend has said Robles
is physically and psychologically abusing her and that she is "in
fear for her life." He is also starting to abuse alcohol, the
petition stated.
"The defendant's girlfriend has concerns that if the defendant
were to flee, she cannot pay the $100,000 lien put on her property
to secure the bond," the petition said.
Robles' girlfriend and the pilot Robles allegedly talked to,
Dwight Hewlett, testified at Thursday's hearing. At the conclusion
of the hearing, the judge issued an order denying Robles' motion for
bond.
In his order, Gold stated he was revoking the bond because of the
substantial sentences Robles faces, the defendant's initial
reluctance to accept the plea agreement, the fact that Robles has
engaged in foreign travel recently, his lack of family ties in Miami
since his relationship with his girlfriend is troubled, and that
only $1 million of the $13 million he apparently obtained from
clients is left.
"The inference, therefore, is strong that the Defendant may have
secreted some of the unaccounted for monies in foreign countries
during his foreign travel prior to the filing of the indictment in
this matter," Gold said.
ROBLES PANICKED?
In 2002, the Daily Business Review first reported on a four-year
Florida Bar investigation into Robles and the abrupt closure of his
downtown Miami office in 2002.
The Bar had received numerous complaints from some of Robles'
estimated 7,000 asbestos clients around the country. Clients had
complained that Robles overcharged them for costs, didn't return
phone calls and sent them few, if any, settlement payments. The
Florida Supreme Court later disbarred him.
After being indicted last year, Robles initially pleaded not
guilty. Then, earlier this year,
he struck a plea deal with federal prosecutors that called for
him to serve 10 years in prison and pay full restitution to victims.
Not so fast, said Gold, who told prosecutors last month that he
wanted them to send letters to all victims to determine whether they
approve of the plea deal terms. Some victims told the Review they
thought the deal was too lenient.
Bruce Lehr, a Miami criminal defense attorney and former county
prosecutor who is not involved in the case, said it's not clear if
the latest developments would harm Robles' chances of getting the
plea deal accepted by Gold.
"A judge can look at it either way," Lehr said. "Either as
unrelated panic, which doesn't change the appropriateness of the
plea deal, or as disrespect and additional criminal behavior." In
his 24 years of practice, Lehr said only one of his clients has
fled, the day after he bonded out of jail.
But Sharpstein said Gold, who is known for being a relatively
strict judge, likely would be tougher on Robles as a result.
The few clients of his who fled the country while out on bond
"inevitably" got caught, Sharpstein said. "The world is a very small
place," he said. "It's an idiotic act."
'Teddy' Rap
By Kieran Crowley
New York Post
May 19, 2007
A St. James, L.I., lawyer is accused of stealing $67,000 from the
estate of a noted historian and expert on Teddy Roosevelt.
Robert Shuster, 66, allegedly
looted the estate of John Allen Gable, director of the Theodore
Roosevelt Association.
Shuster, hired to administer the
estate of Gable, who died in February 2005, made numerous transfers
from an estate escrow account into his personal account over several
months, Nassau cops said - until Gable's brother, Patrick, "found
out there was only $5 left."
Husband
and Wife NY Lawyers Confess Insider Trading
By Mark Hamblett
New York Lawyer
New York Law Journal
May 11, 2007
A husband and wife who are lawyers yesterday admitted passing on
insider information about pending deals at Morgan Stanley.
Randi Collotta broke down and wept as she confessed to Southern
District Judge Victor Marrero that she revealed information about an
April 2005 merger involving Macromedia Inc. and Adobe Systems Inc. -
information she acquired in her role as a compliance officer at the
investment bank.
Ms. Collotta said she breached her duty to Morgan Stanley and its
clients "when I showed that information to my husband, Chris
Collotta," who she knew would pass on to an old high school friend
living in Florida, broker-dealer Marc Jurman.
Mr. Jurman purchased 10 Macromedia call options and turned a quick
profit, sending a total of $9,000 to the couple for their trouble.
Yesterday, Ms. Collotta, 30, and Mr. Collotta, 34, pleaded guilty to
securities fraud and conspiracy to commit securities fraud. While
the conspiracy charge calls for a maximum of 5 years in prison and
the securities charge as much as 20 years, the two are expected to
be ordered to serve far less prison time, somewhere between 10 and
18 months, when Judge Marrero sentences them on Sept. 7.
Their arrest in March was part of a government insider trading sweep
that netted 13 people and has yielded six guilty pleas, including
those of the Collottas. Authorities consider the sweep one of the
largest since the insider trading scandals of 1980s.
Overall, tips provided by Ms. Collotta netted Mr. Jurman and several
associates more than $600,000, according to Assistant U.S. Attorney
Andrew Fish, who said the evidence included tape recorded
conversations involving the Collottas.
Ms. Collotta had to be steadied several times by her lawyers as she
allocuted to the facts on the Macromedia deal and admitted to taking
part in a larger conspiracy covering three other announced mergers
or acquisitions: the November 2004 announcement on the acquisition
of Argosy Gaming Co. by Penn National Gaming, Inc., the June 2005
announcement of the purchase of Catellus Development Corp. by
ProLogis; and the July 2005 announcement of UnitedHealthGroup's
purchase of PacifiCare Health Systems, Inc.
"I understood that my actions were wrong," she told the judge.
Mr. Jurman pleaded guilty in February and is cooperating with the
government's probe.
Mr. Fish told Judge Marrero that Mr. Jurman received the information
and then passed it to hedge fund trader Erik Franklin, who made
$235,000, and former Bear Stearns & Co. brokers Ken Okada and Robert
Babcock, who in turn forwarded it to another man for a $315,000
profit.
Kenneth Breen of Paul, Hastings, Janofsky & Walker, who represented
Ms. Collotta, said after the guilty plea that "Randi Collotta
accepted responsibility for what she did and today took a
significant step in putting this behind her."
After leaving Morgan Stanley in the summer of 2005, Ms. Collotta
headed to The Garden City Group, Inc. Based in Melville, the company
handles administration and claim evaluation for class actions. She
resigned from her post as director of securities operations on the
day that she was arraigned.
Mr. Collotta, of the labor and employment firm Zabell & Associates
in Bohemia, N.Y., spoke in a clear voice as he admitted to the facts
on the Macromedia deal and the larger conspiracy.
Brian Rafferty of Dornbush Schaeffer Strongin & Venaglia, who
represents Mr. Collotta, released a statement after the guilty plea
emphasizing that his client accepted responsibility for his actions.
"Mr. Collotta recognizes that these are serious offenses, deeply
regrets his actions in participating in these offenses, and realizes
that he will live with the consequences of his actions for the rest
of his life," Mr. Rafferty said.
Ironically, the guilty pleas came the same day Southern District
U.S. Attorney Michael Garcia announced the indictment for insider
trading of another couple, also involving Morgan Stanley.
Jennifer Wang, 31 a former financial analyst at Morgan Stanley and
her husband, Ruben Chen, 34 of Englishtown, N.J., a former ING
analyst of hedge funds, were accused of netting $600,000. They were
arrested yesterday and entered pleas of not guilty. Both resigned
last year following inquiries by the Securities Exchange Commission
and internal investigations at both Morgan Stanley and ING.
Crooked NY GC Must Pay $52 Million, Headed to Prison
By Beth Bar
New York Law Journal
New York Lawyer
May 11, 2007
William Sorin, Comverse Technology's former general counsel, was
sentenced yesterday to one year and one day in prison for his role
in a stock options backdating scheme.
Mr. Sorin, a
Harvard-educated attorney who pleaded guilty in Eastern District
court in November to one criminal count of conspiracy to commit
securities fraud, mail fraud and wire fraud, was also ordered
yesterday by Eastern District Judge Nicholas G. Garaufis to pay
nearly $52 million in restitution.
In addition to Mr. Sorin,
who faced a maximum sentence of five years in prison, David
Kreinberg, the company's former CFO, has pleaded guilty to criminal
charges.
Messrs. Sorin and Kreinberg
were charged in August but were never indicted.
Jacob "Kobi" Alexander, the
company's ex-CEO, a fugitive who was discovered in Namibia in
September, has been indicted on 35 charges.
In an Oct. 11 superseding
indictment, Mr. Alexander was accused of using fictitious names to
generate hundreds of thousands of backdated options.
Lawyer's
"Life's Short. Get a Divorce"
Billboard No Longer A Roadside Attraction
By The Associated Press
New York Lawyer
May 10, 2007
A racy billboard
proclaiming, "Life's short. Get a divorce," caused such an uproar
that city workers stripped it from its downtown Chicago perch after
a week.
It wasn't so much about the
partially clothed man and woman on the law firm's ad. It was the
phrase that lawyers Corri Fetman and Kelly Garland chose that drew
scores of complaints from neighbors and from other attorneys who
said it reflected poorly on their profession.
A city alderman who lives
nearby found a technical reason to jettison the sign.
"I called the building
inspector and told him to do his job, and he did," said Alderman
Burton Natarus. "It has nothing to do with content or anything else.
They did not have a permit, and they were ordered to take it down."
Fetman and Garland say
they're upset the sign was removed.
"They ripped our billboard
down without due process," Fetman said. "We own that art. I feel
violated."
Despite its brief run, the
sign apparently was good for business. Since it went up last week,
the two attorneys said calls to their law firm have gone up
dramatically.
Lawyer's
Alleged "Bedside Manner" Triggers Ethics Probe
By Charles Toutant
New Jersey Law Journal
New York Lawyer
May 10, 2007
When Miguel Herrera was
badly hurt in a 2002 car crash, he didn't have to look far for legal
representation. Cherry Hill, N.J., lawyer Jeffrey Hark appeared one
day in his hospital room. Herrera says that in pain and under heavy
medication, he signed a contingency fee agreement.
It wasn't until much later,
Herrera says, that he learned of Hark's conflict of interest: The
other driver in the crash was Vernon Roth, Hark's wife's
grandfather.
Herrera says Hark told him
he could not recover more than Roth's $100,000 automobile insurance
policy, even though Hark knew Roth had substantial assets.
And, Herrera says, Hark
arranged a lawyer for him in a municipal court case arising from the
crash while arranging for another lawyer to represent Roth. Both
were tenants of Hark's law building.
While those facts make out
a prima facie case of deviation from acceptable professional
standards, a Camden County, N.J., judge properly dismissed Herrera's
legal malpractice case on summary judgment, an appeals court ruled
on Tuesday.
Herrera can't recover
damages for malpractice because the lawyer who replaced Hark in the
negligence case settled it for an acceptable amount. "Herrera has
not shown how he would have obtained a better result than the
$95,000 settlement, even if Hark had disclosed his conflict of
interest. In short, no showing of damages has been made," wrote
Judges Ariel Rodriguez and Thomas Lyons in Herrera v. Hark,
A-1862-05.
Nevertheless, the panel
referred the case to the Office of Attorney Ethics for an
investigation of Hark's conduct.
The panel cited Rule of
Professional Conduct 7.3(b)(1), which forbids initiation of contact
with prospective clients whose physical, emotional or mental state
is such that the person could not exercise reasonable judgment, and
In re Pajerowski, 156 N.J. 5 (1998), which found RPC 7.3(b)(1)
violated where a runner was sent to a victim's hospital room shortly
after an accident.
Hark, contacted after
Tuesday's ruling, disputed many of the facts Herrera alleged. He did
not visit the hospital room unannounced but was contacted by a
friend of Herrera about representation, and Herrera signed the fee
agreement in Hark's office, not the hospital, Hark says. He also
says he had no involvement in retaining lawyers to represent Herrera
or Roth in municipal court.
Hark says Herrera sued him
for malpractice to get leverage in a fee arbitration between Herrera
and the law firm that settled the case, Perskie, Wallach, Fendt &
Holtz of Atlantic City, N.J. Herrera also sued the Perskie firm,
which was dismissed as a defendant.
Hark says Herrera reported
him to the OAE and that an investigation has been pending for three
years.
Herrera's lawyer, Sebastian
Ionno II of Clifford Van Syoc's office in Cherry Hill, did not
return a call.
Lawyer
Indicted in Porn Probe Says Feds Overreached
By The Associated Press
New York Lawyer
March 23, 2007
NEW HAVEN, Conn. -- A prominent defense attorney charged with
destroying evidence in a child pornography investigation said
Thursday that authorities are overreaching in a way that could make
parents, employers and others vulnerable to such prosecutions.
Philip Russell was charged
Feb. 16 with destroying a computer that contained child pornography
at Christ Church in Greenwich. Former President George H.W. Bush
attended the church while growing up.
Russell, the former
attorney for the church, is accused of obstructing an FBI
investigation that led to the January conviction of the church's
music director, Robert Tate, for possessing child pornography.
He was charged under the
Sarbanes-Oxley Act, which Congress passed in 2002 after a wave of
corporate accounting scandals to make it easier to prosecute such
cases. He faces up to 40 years in prison if convicted.
Russell filed court papers
Thursday urging a judge to dismiss a count that involves the
Sarbanes-Oxley Act, saying the law was meant to prevent corporate
document shredding. The law made it easier to prosecute obstruction
of justice by requiring only that an investigation was foreseeable,
rather than pending.
Russell acknowledges he
destroyed the computer but says he had no reason to believe the
matter was under investigation or that it would lead to an
investigation.
"A parent who finds
pictures of 'naked boys' in his/her child's backpack would also face
a 20-year federal felony for obstruction ... if he/she throws the
pictures out to insulate the child from future legal difficulties,"
wrote Russell's attorney, Robert Casale.
Prosecutors declined to
comment on the latest court papers but have defended Russell's
indictment.
Lawyer's
Hoax Spurs Debate on Legal Tactics, Ethics
By The Associated Press
New York Lawyer
March 22, 2007
MADISON, Wis. -- When a
prominent lawyer was defending a businessman on charges of sexually
assaulting a boy and possessing child pornography, he used a ruse to
obtain the boy's computer to aid his case.
Now, state regulators want
the state Supreme Court to scold the lawyer for the hoax. Stephen
Hurley hired a private investigator to trick the boy into swapping
his computer for a new laptop.
The case illustrates what
the American Bar Association says has been a major debate in legal
circles in recent years: Can lawyers ethically participate in covert
activities?
The court will decide
whether to discipline Hurley. The private reprimand sought by
regulators is the lightest punishment possible.
The Oregon Supreme Court
set off a similar debate in 2000 when it reprimanded a lawyer who
posed as a doctor in phone calls to an insurance company he was
planning to sue.
Hurley's lawyer, Claude
Covelli, said his client did nothing wrong in supervising an
undercover investigation to collect evidence, similar to sting
operations conducted by law enforcement officers investigating civil
rights complaints.
But a complaint filed by a
state disciplinary board says Hurley broke rules that prohibit
lawyers from engaging in "dishonesty, fraud, deceit or
misrepresentation" by approving the hoax.
"There are limits to
zealous advocacy," said William Weigel, lawyer for the Office of
Lawyer Regulation, who brought the complaint last month.
Supporters say Hurley, who
has represented everyone from former University of Wisconsin
football player Ron Dayne to former Gov. Scott McCallum, is being
unfairly targeted.
"I certainly wouldn't be
proud of taking advantage of a teenager," said Jack King, spokesman
for the National Association of Criminal Defense Lawyers. "But I
don't feel the guy did anything unethical as far as the professional
responsibilities rules go."
At issue is Hurley's
defense of Gordon Sussman, who owned a business in Madison selling
canoes and kayaks and became the boy's school mentor.
Sussman, 54, has insisted
his accuser is lying.
Hurley wanted the boy's
computer to aid the defense. He acknowledges hiring private
investigator Sheridan Glen to obtain it through deception.
Glen sent the boy a letter
from a fake Illinois company called Thermetric, Inc., claiming to be
researching students' computer use.
"You have been selected to
receive a brand new Hewlett Packard laptop computer, free of charge"
in exchange for turning over a computer, the letter said. "The new
computer is your reward for participation." The letter was signed
"Glen Sheridan."
Glen later traveled to the
boy's home in Indiana, where he had moved, to make the swap. His
mother soon feared they were tricked and alerted authorities.
A defense analyst
discovered hundreds of pornographic images on the computer,
including 28 images involving children. Hurley claimed the images
showed the boy accessed child pornography and learned about sex on
his own and not through Sussman.
The evidence was never
introduced at trial. A judge ruled that pornography viewed by the
boy in 2004 was not relevant to assaults that happened at least two
years earlier.
A jury found Sussman guilty
of assault and possessing child pornography. He is in prison, though
he maintains his innocence and is appealing.
Hurley, who did not return
phone or e-mail messages, argued in court documents in 2005 that the
hoax was the only way he could obtain the computer and perhaps
evidence to exonerate his client.
"Given that the defense
does not have the police at its disposal, this was the only means to
obtain this exculpatory evidence," his law firm wrote in a motion.
"The defense was correct in its instinct as the computer did contain
relevant pornography."
Weigel's complaint says
Hurley could have asked authorities to investigate the computer or
sought a subpoena requiring the boy to produce it.
Other defense lawyers
called those steps impractical and the use of deception justified,
saying it was no different than a prosecutor who oversees undercover
police operations.
"It's exactly the same
thing or should be," Madison attorney Stephen Morgan said.
Dane County District
Attorney Brian Blanchard, who complained to regulators about
Hurley's actions, dismissed such comparisons.
"There is no comparison
between those lawful investigative activities and a private
attorney's use of a sophisticated trick, without any court
involvement whatsoever, to dupe a child witness in a criminal case
out of his private computer files," he said.
Weigel acknowledged that
Wisconsin rules are murky and the court could use the case to spell
them out.
Lawyer
Guilty of Medicare Fraud
By John Dorschner
The Miami Herald
March 8, 2007
South Florida attorney
Benjamin R. Metsch pleaded guilty today on charges he defrauded
Medicare from October 2002 through August 2004, the U.S. Attorney's
Office announced.
Metsch conspired with
another individual, unnamed in the indictment, to facilitate the
fraudulent sales of 67 South Florida durable medical equipment
companies.
According to the charges,
the sales involved ''straw purchasers'' who acted in the place of
the true purchasers of the DME companies. This kind of convoluted
transaction tends to impede Medicare investigators and prosecutors
from quickly tracking down persons committing fraud.
In the plea agreement,
Metsch agreed to pay $103,000 restitution to Medicare because his
law firm earned $103,000 in the fraudulent transactions.
Metsch faces a maximum
sentence of 10 years' imprisonment, according to prosecutors. His
sentencing is scheduled for May 18. The case is being prosecuted by
David Frank.
Attorney
Busted in 500g Theft
Associated Press
February 27, 2007
A lawyer was arrested
yesterday on charges of stealing at least $500,000 from clients
involved in real-estate deals.
Gwenerva Cherry stole from
a company in bankruptcy, two people who were trying to buy homes,
and two clients looking to invest in Brooklyn apartments,
prosecutors said.
Cherry, 50, was stealing
because she was constantly in debt, Manhattan District Attorney
Robert Morgenthau said.
"She was robbing Peter to
pay Paul, using the money to pay back money she had already
embezzled," he said.
The bankrupt company,
Rapsil Construction Corp., hired Cherry in fall 2005 to help sell
off several Harlem properties.
Cherry contracted with
several buyers who gave her $300,000 in down payments, and stole the
cash, Morgenthau said.
People ripped off in that
scam included a woman who gave her $95,000 and a man who gave her
$80,000 as down payments on townhouses, Morgenthau said.
She used those funds to pay
office expenses and pay off debts to clients, he said.
Suspended
Metro Solo Can Practice Again
But Can't Be Alone With Women
New York Lawyer
February 6, 2007
By the Staff of
The Connecticut Law Tribune
Ira S. Mayo, the
Torrington, Conn., solo whose law license was suspended for 15
months in September 2005 for making unwanted sexual advances toward
female clients, was reinstated to practice last month, as long as he
abides by certain conditions.
Among them, he must never
be alone or in confined quarters in his law office with women at any
time, according to a court order. Middlesex Superior Court Judge
Robert L. Holzberg also demanded that Mayo "direct his practice away
from the representation of women in domestic relations matters."
The clients who grieved
Mayo were referred to him by the Susan B. Anthony Project for abused
women. Complainants accused Mayo of coercing them into performing
sexual favors to reduce the legal fees they owed.
Mayo "seemed more
interested in fulfilling his sexual urges than my [marriage]
dissolution case," one of the women asserted in her complaint to the
Statewide Grievance Committee.
Mayo initially "denied any
sexual contact or other improper behavior," but later admitted to
certain facts lodged in the complaints. Waterbury attorney Sean G.
FitzMaurice has been designated as Mayo's practice mentor.
Husband-and-Wife Lawyers Face Trial
for Demanding Payments After Wife's Affairs
By Mary Alice Robbins
Texas Lawyer
New York Lawyer
February 6, 2007
Two San Antonio, Texas, lawyers, married to each other, face a trial
on theft charges based on allegations that the wife had sexual
liaisons with four men whom the husband subsequently threatened with
litigation unless they compensated him for his emotional distress.
The trial in
State v. Mary Roberts, Ted Roberts is scheduled to begin on Feb.
12 before Judge Sid Harle in San Antonio's 226th District Court.
A Bexar County grand jury
first indicted the two lawyers on the theft charges in 2005,
identifying the four men who are the complainants only by their
initials. A second Bexar County grand jury reindicted the couple in
2006, this time naming the four men: Steve Riebel, Geoffrey
Ferguson, Paul Fitzgerald and Reagan Sakai.
The second indictments
allege that Mary and Ted Roberts unlawfully appropriated the four
men's money by deception and by coercion. According to the
indictments, the alleged offenses -- violations of Texas Penal Code
§§31.01 and 31.03 -- occurred between Oct. 1, 2001, and April 2,
2002.
Cliff Herberg, Bexar
County's first assistant district attorney, says the allegation is
that the wife had sexual liaisons with the men and her husband
subsequently approached them to demand payments or he would expose
them to hatred, contempt and ridicule.
Riebel, Ferguson and Sakai
did not return telephone calls seeking comment before press time.
"It's a very personal matter," Fitzgerald says, declining further
comment.
At least one of the men met
Mary Roberts online.
"My client had some
information posted on a Web site, and he was contacted by Mary
Roberts," says Van G. Hilley, who represents Riebel.
Hilley, a partner in San
Antonio's Goldstein, Goldstein & Hilley, says Riebel had a
relationship with Mary Roberts and thought he had settled the matter
with her husband. "He was very sorry that it happened," Hilley says.
Herberg says Ted Roberts
collected about $144,000 total from the four men. If the jury finds
Mary and Ted Roberts guilty of theft, each could be convicted of a
second-degree felony, punishable by up to 20 years in prison and up
to a $10,000 fine.
Ted Roberts, principal in
Ted H. Roberts in San Antonio, is certified in personal injury law
and civil trial law by the Texas Board of Legal Specialization,
according to the State Bar's Web site. As noted on that Web site,
Mary Roberts' primary areas of practice include ethics and legal
malpractice, law office management, real estate and wills, and
trusts and probate. She is an attorney in her husband's firm.
San Antonio solo Michael
McCrum, who represents the couple, contends Ted Roberts presented
the men with whom his wife had the affairs with demand letters and
copies of petitions that Ted Roberts proposed to file under Rule 202
of the Texas Civil Rules of Procedure in contemplation of filing a
suit for intentional infliction of emotional distress.
"He found out about the
affairs, and he was incensed," McCrum says of Ted Roberts.
McCrum says that instead of
beating the men up, like some husbands would do, Ted Roberts chose
to present them with the demand letters and petitions. He says
Roberts told the men that he could file a tort claim against each of
them for having the affairs with his wife.
"They settled; their wives
didn't know this had happened," McCrum says.
McCrum contends the state
is trying to prosecute his clients for something that civil lawyers
do all the time -- send demand letters and present petitions they
plan to file under Rule 202.
"By stretching statutory
words to an unprecedented interpretation, the state seeks to
criminalize as "theft the presentment and subsequent settlement of
potential claims authorized under the Texas Rules of Civil
Procedure," Mary and Ted Roberts alleged in one of several motions
to quash their indictments that Harle dismissed in October 2006.
McCrum says the outcome of
his clients' case could impact every civil lawyer in Texas who
writes a demand letter. "Their demand letters can come under attack
by a DA," he contends.
"We dispute that version of
the facts," Herberg says. "If we thought this was something that all
lawyers do, they wouldn't have been charged."
TWO THINGS
Rod Phelan, a commercial
trial lawyer and partner in Baker Botts in Dallas, says lawyers are
supposed to use Rule 202 for two things: to investigate whether they
have a claim or to preserve testimony of a witness who would not be
available to testify because the witness either is dying or is
leaving the jurisdiction.
Ted Roberts' use of Rule
202 "sounds like an odd use of the rule," Phelan says. But he adds,
"That doesn't have anything to do with whether it's criminally
actionable."
Phelan says there is "a
kernel of truth" in the point that McCrum is making. "The line
between extortion or blackmail and making a demand to settle a
colorable claim is gray," he says. "What seems to a defendant as
extortion or blackmail may seem to the plaintiff as a bona fide
claim."
Bill Dorsaneo, a Southern
Methodist University Dedman School of Law professor who teaches and
writes on Texas civil procedure, says demand letters that lawyers
write have been regarded as privileged.
Dorsaneo says he's
surprised that the criminal law would allow the criminal prosecution
of a lawyer for doing something that would be privileged in the
civil context. "I'm not sure it's a good idea," he says.
The couple argued in their
motions to quash that the theft statute is unconstitutionally vague
and/or overly broad and that the indictment failed to state an
offense. McCrum says Harle dismissed the motions without prejudice,
and he says he will re-urge the motions at the end of the state's
case.
Herberg says the theft
statute has been around for a long time. "We don't think it's
vague," he says.
Williamson County District
Attorney John Bradley, who has followed the case, says he thinks the
theft provisions in the Penal Code are the "best fit" for
prosecuting Mary and Ted Roberts.
"You obviously have to get
a jury to believe the lawyer [Ted Roberts] was manipulating the
legal system to get that money," Bradley says.
Bradley says he doesn't
think it's a good argument to contend that Ted Roberts merely did
what civil lawyers do all the time when Roberts presented his demand
letter and petition to each of the men who had a relationship with
his wife.
"The unique thing going on
here is he [Ted Roberts] was litigating for himself," Bradley says.
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