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Nine
Lawyers, Dozens of Others Charged By Lara Jakes
Jordan WASHINGTON -- Nine lawyers, an ex-police officer and an electrician who bribed a former governor were among 78 people charged with bankruptcy fraud in the past two months, the Justice Department said Wednesday. Eighteen of the arrests came this week alone, said Deputy Attorney General Paul McNulty, who outlined the nationwide crackdown on people trying to conceal more than $3 million in assets. "In the end, we all wind up paying for fraud, in the form of higher interest rates and fees from companies that offer credit and loans," McNulty told reporters. Bankruptcy fraud often follows false claims on mortgages, banks and the mail, McNulty said. The arrests are on track to outpace last year's estimated total of 100 bankruptcy fraud cases, the FBI said. The names of those charged were not released in Washington, although a department investigator said a former Denver police officer was snared in the two-month sting, dubbed "Operation Truth or Consequences." Among those charged was Kurt Claywell, an electrical contractor who admitted giving former Connecticut Gov. John G. Rowland expensive champagne and Cuban cigars for access to state contracts. Authorities in New Haven, Conn., said the assets Claywell tried to hide included a boat, a rare book collection, 35 acres of land, $35,000 worth of wine and a gun collection. A dozen of the arrests came in the Chicago area, where federal prosecutor David Glockner described swindlers who used bankruptcy fraud in home-rescue schemes marketed to people desperate to hang onto their homes. Under these schemes, homeowners facing foreclosure sell their homes to "investors," prosecutors said. They said the former homeowners then pay rent to the investors with the promise that they can get back both the homes and built-up equity when their finances are healthier. Prosecutors said crooked attorneys then declare bankruptcy on behalf of the former homeowners, illegally hiding the sale from the bankruptcy court, paying off the mortgage and pocketing the equity. The former homeowners then are allowed to buy back the property at full price if they can afford to do so. "This is the new face of bankruptcy fraud," Glockner said. Metro Lawyer Arrested for Stealing Millions New York Lawyer LITCHFIELD, Conn. -- A retired Torrington lawyer has been arrested on charges of stealing millions of dollars from an elderly client. Peter Sivaslian, already facing lawsuits that he swindled $3 million from an elderly Barkhamsted woman, was arrested Tuesday on criminal charges in the case. Sivaslian, 74, was arrested on a warrant charging him with first- and second-degree larceny. Sivaslian has been under scrutiny since Jane Wiederhold, now 85, told her nephew Edward McAteer six years ago she didn't think she had enough money to live on. She told him she suspected Sivaslian was "taking everything," according to the 49-page warrant. Sivaslian had originally been hired by John T. Wiederhold, who died in January 1998. John and Jane Wiederhold had no children, so Wiederhold's assets, totaling about $12.7 million, were left to his wife. Sivaslian had been named co-executor of the estate of Wiederhold's husband. Police allege Sivaslian took advantage of Wiederhold, stealing assets he didn't think could be traced including stocks, cash and jewelry. Allegations of mismanagement were first raised in 2005 in New Hartford Probate Court by executors and attorneys for the estate who were conducting an informal investigation of Sivaslian's handling of the funds. Civil lawsuits were launched against Sivaslian by executors for the estate last year. Sivaslian was arraigned Tuesday morning at Superior Court in Bantam, where he posted $150,000 bail and surrendered his passport. Noel, Ex Prosecutor May Lose Bar Cards By Mike McKee The legal careers of Robert Noel and Robert Roland, two San Francisco lawyers who made headlines for very different and scandalous reasons, may be over. The State Bar Court, which disciplines troubled attorneys, recommended in two rulings on Tuesday that both men be disbarred from practicing law. The final decision is up to the California Supreme Court. Noel and his wife, Marjorie Knoller, made national news in 2001 when their two huge Presa Canario dogs mauled to death a neighbor, Diane Whipple, in their Pacific Heights apartment building. Both were sentenced to four years in prison in 2002, but were released early on parole. Knoller's case is pending before the California Supreme Court. However, Noel's appeal of his separate involuntary manslaughter conviction was rejected. Roland, a former San Francisco assistant district attorney, was thrust into the spotlight last year when he was charged with trading drugs for leniency in court cases. Two months ago, he was sentenced to six months in federal prison after pleading guilty to possessing Ecstasy with the intent to distribute. Oddly, the decision in Noel's case had nothing to do with his underlying conviction. Instead, he was dinged for ignoring State Bar rules that require suspended or disbarred attorneys to notify clients and opposing counsel of their inability to practice. State Bar Court Judge Patrice McElroy found that Noel, who was suspended in 2002, had made no effort to comply. "[He] demonstrated indifference," she wrote, "toward rectification of or atonement for the consequences of his misconduct." State Bar chief trial counsel Scott Drexel said that as a result of Tuesday's disbarment proposal, a separate State Bar case based on Noel's involuntary manslaughter conviction will be dismissed as moot. Both Drexel and Judge McElroy noted that Noel made no effort to contest the charges against him for violating State Bar rules. He didn't show up for any hearings and wasn't represented by other lawyers for what the State Bar considers "extremely serious misconduct." "It would undermine the integrity of the disciplinary system and damage public confidence in the legal system," McElroy wrote, "if [Noel] were not disbarred for his unexplained willful disobedience." Noel -- who was admitted to the Bar on May 6, 1976 -- had little to say on Thursday other than that he expected disbarment and had no interest in appealing to the Supreme Court. "I'm perfectly happy not to practice law ever again," he said. "I'm just happy doing what I'm doing now." When asked how he's making a living, Noel replied, "This and that." In Roland's case, State Bar Court Presiding Judge Ronald Stovitz recommended summary disbarment after declaring his crime a felony involving moral turpitude. Under those circumstances, California statutes allow the State Bar to banish lawyers without a trial. "In his plea agreement," Stovitz wrote, "[Roland] admitted that he knowingly possessed a controlled substance with the intent to deliver it." Drexel said Thursday that if cases meet the criteria for summary disbarment, "we feel we don't have the discretion to seek it in one case and not another." San Francisco attorney Doron Weinberg, who represented Roland on the discipline charges, was surprised by Tuesday's ruling and believes the court relied on an erroneous interpretation of moral turpitude. The definition changed 10 years ago, he said, to require summary disbarment only in cases in which the crime inherently involved moral turpitude. "The crime [Roland] pled to," the Weinberg & Wilder partner said, "did not inherently involve moral turpitude." He said "logic" and "case law" support that contention. Weinberg vowed to seek Supreme Court review. Cristina Arguedas, who represented Roland against the criminal charges in federal court, wouldn't comment on the disbarment proposal. But she confirmed that Roland -- who became a lawyer on Dec. 2, 1999 -- is in federal prison. "He's doing his time and he's doing really well," she said. "He has just this great mental attitude that's really positive and is making the best of it. He's reading books and trying to keep in shape." Under State Bar rules, disbarred attorneys are allowed to seek reinstatement five years after they were originally suspended. That would make Roland eligible in April 2011 and Noel in April 2007. NJ Attorney General Resigns Over Boyfriend’s Traffic Stop By Beth DeFalco Zulima Farber, who will step down at the end of the month, said she is leaving office "out of respect for the governor" and not because she was asked to do so. "I admit to being human and making that error. I am truly sorry and apologize to all New Jerseyans for that mistake," said Farber, who appeared at a Statehouse news conference alongside Gov. Jon S. Corzine. Farber's live-in boyfriend, lawyer Hamlet Goore, was pulled over by police in Fairview for a traffic violation in May, and Farber showed up at the scene in her state car. Goore's van was found to be improperly registered and his license appeared to be suspended, but he was allowed to drive home. In recent weeks, Farber denied doing anything to influence the police. But a special prosecutor appointed by the governor said in a report issued Tuesday that Farber violated state ethics laws by "approving actions which allowed Mr. Goore to drive his vehicle home." "The attorney general knowingly acted to secure a benefit for Mr. Goore that was violative of the motor vehicle laws and obviously not available to the general public," Richard J. Williams wrote in his report. Corzine appointed Farber to the state's top law-enforcement post upon taking office earlier this year. But in New Jersey, a governor can only remove an attorney general "for cause," a murky standard in the opinion of some legal experts. Motor vehicle records show that Farber, 61, has had at least 12 speeding tickets, four bench warrants issued for her arrest and three license suspensions. The report led to renewed calls for the resignation of the New Jersey's first Hispanic attorney general. "She is incapable of leading the fight against official misconduct and abuse of power because her conduct indicates that she does not even recognize what those things are," said state Republican chairman
Attorney Inherits the Windfall By Stefanie Cohen and Dareh
Gregorian
Francis X. Morrissey Jr. has befriended and done estate work for at least six people who died in their 80s and 90s - most of whom changed their wills shortly before dying to make sure he got a bigger piece of their fortunes, court records show. One of his generous clients
was economist CLEANING UP
ON THE WEALTHY: In all, Morrissey's clients have left him millions in cash and property, including a Park Avenue apartment, 29 acres and a house on the Maine coast, jewelry, furniture and even two Renoir paintings, Surrogate's Court filings show. In two of the cases, including Schurr's, Morrissey was accused of using "undue influence" - taking advantage of his clients' mental states for his own benefit. Both cases settled, and the charges were never substantiated. Morrissey did not return calls seeking comment. Friends of Astor - the 104-year-old first lady of New York society and philanthropy - say her penny-pinching son, Anthony Marshall, placed Morrissey in charge of her estate planning in 2004, pushing aside her 40-year relationship with the white-shoe law firm of Sullivan Cromwell. Morrissey, 63, is friends with Marshall and his wife, Charlene, and is on the board of their theater-production company, Delphi Productions. Morrissey's association with Delphi certainly provided him with easier access to Astor because Marshall moved the company's offices into the grande dame's Park Avenue apartment in 2004. Marshall's lawyer, Kenneth Warner, insisted it was Astor's idea to turn to Morrissey for "general advice. He didn't prepare any legal documents. His role was limited." He said Morrissey and Astor have been friends since the 1970s. Records show Morrissey has made his longtime friendships with other rich people pay off. Morrissey, who was admitted to the bar in 1973, was doing estate work by the mid-'70s. In 1979, he befriended Jay Lovestone, labor party leader, co-founder of the Communist Party of America and CIA operative. He was named co-executor of Lovestone's 1986 will, which was prepared when Lovestone was 86. He died in 1990, and left a chunk of his estate to Morrissey, who said in court papers that he'd overseen Lovestone's medical care for the last few years of his life. In an affidavit, Morrissey said he'd been introduced to Lovestone by Page Morris, "who was a close friend of his for over 50 years, and a very close friend of my own family for many years." Morrissey also did legal work for Morris, who died in 2002 at age 98. Her 2001 will left Morrissey one-third of her estate after her debt cleared. It was through Lovestone that Morrissey became friends with Schurr, who was married to Lovestone's niece. Schurr's nephew charged in court papers that Morrissey and others took advantage of his uncle's failing mental state after a stroke he had suffered in 2000. The papers noted that Schurr suddenly moved to New York in August 2001 and bought an East 57th Street apartment. The following March, he changed his will and decided to leave his newly bought apartment to Morrissey, along with the valuable drawing. Morrissey maintained Schurr was of sound mind until he died of a heart attack. Two of Morrissey's other elderly friends were friends of each other - Anne Hilde Huston and Elisabeth Von Knapitsch first met at a dance class in Germany when they were 10. Huston, who emigrated to New York in 1936 to escape the Nazis, left him her Maine house and 29 acres of land. Susannah Jones, of Seal Cove, Maine, a neighbor of Huston's said she'd always told people Morrissey was getting the house. "It was always very clear she was leaving it to him," Jones said. "He was awfully good to her." When The Post knocked on the door of the home, a man who answered identified himself as Morrissey's nephew-in-law, said the attorney owns the property - and asked the reporter to leave. Huston's pal Von Knapitsch left him her Park Avenue apartment and the Renoirs. That was actually small potatoes for Morrissey - at one point, Von Knapitsch wrote a will that left him her entire $15 million estate. The court Public Administrator challenged the will, and charged Morrissey had used "undue influence" on the elderly Von Knapitsch. The case settled last year, with a total of $3 million going to one of Von Knapitsch's relatives, a charity and for various legal fees. Morrissey was never found to have committed any wrongdoing. Probers for JPMorgan Chase, the temporary, court-appointed financial guardians for Astor, are reviewing her financial matters, including whether she changed any of her wills in the past few years and how much of her money has been invested in Delphi.
NY Lawyer Disbarred for Deceiving Judge By Tom Perrotta An attorney who was held in contempt and jailed for deceiving a judge and failing to immediately repay $52,000 in a foreclosure case was disbarred last week by the Appellate Division, Second Department. A unanimous panel of the court said that Charles Rudd Mackenzie, 41, had "engaged in misconduct involving dishonesty and deceit going to the heart of the judicial system." In 2003, Mr. Mackenzie was representing a man who said he had a claim on a property in Yonkers that was sold at foreclosure. Mr. Mackenzie told Westchester Supreme Court Justice W. Denis Donovan that no one else had a claim on the property, and the judge awarded Mr. Mackenzie's client summary judgment for $230,000. But Mr. Mackenzie did not inform the judge that his client's mortgage with his ex-wife had been satisfied years earlier. Nor did he inform the court about prior proceedings and a decision in related civil actions. When the judge discovered the misrepresentations, he ordered Mr. Mackenzie to repay $52,000 of the $80,000 he had collected in legal fees, or spend 30 days in jail. He did not immediately repay the money and was sent to prison. Mr. Mackenzie has no prior convictions, but once received a letter of caution on another matter. He is still paying off the money he owes, and he told the appeals court he would like to work in public service, perhaps on the assigned-counsel panel, and educate young attorneys about the problems he encountered. The court denied his request and said his conduct warranted disbarment in Matter of Mackenzie, 2004-03112. NY Lawyer
Loses Appeals By Mary P. Gallagher The way Queens, N.Y., solo Luis Flores portrayed it to a federal appeals court, his client duped him into believing he was a legitimate businessman, not the ringleader of a drug-money-laundering scheme. But the court didn't buy it."The jury reasonably concluded that Flores participated in the money laundering scheme either knowingly or with willful blindness," the 3rd U.S. Circuit Court of Appeals held on July 21. Flores set up corporations and bank accounts, listing himself as president, signing checks and arranging transfers of funds on behalf of the client, German Altamirano-Leon, in amounts just short of the $10,000 limit that would trigger federal reporting requirements. Most of the money ended up in the hands of Colombian drug cartels. Fake Social Security numbers, the structuring of the cash transfers and other evidence "created in Flores an objective awareness of the high probability that Altamirano was involved in money laundering," wrote Circuit Judge Thomas Ambro, joined by fellow appeals judge Marjorie Rendell and Norma Shapiro, of the Eastern District of Pennsylvania. Flores was convicted in October 2004 of money laundering, conspiracy to launder money and conspiracy to structure transactions. U.S. District Judge Anne Thompson sentenced him to 32 months in jail and a $17,000 fine in January 2005. One of Flores' arguments on appeal was that the prosecution had to prove he was aware that the money was being laundered from a specific illegal activity -- in this case, drug trafficking. The appeals court said it was enough that Flores "knew of or was willfully blind to the fact that the funds originated in some form of unlawful activity." It also upheld the sentence, noting that the sentencing guidelines called for a presumptive 70- to 87-month term. The court found no ground for reversal based on Thompson's reliance on the guidelines, even though Flores was sentenced the week after the Supreme Court held the guidelines merely advisory, in U.S. v. Booker, 543 U.S. 220 (2005). WARNING SIGNS Flores, a Fordham Law School graduate, had been practicing law for two years when Altamirano showed up at his Jackson Heights office in 1998. Altamirano introduced himself as an Ecuadorian entrepreneur with plans to start a U.S. operation dealing in flowers, fruit and seafood. Flores, a naturalized American citizen born in Chile, had recently done work for a government entity in Argentina and was interested in representing South American businessmen. Warning signs were present almost from the start, however. As soon as Flores would set up a company that had no other physical address than his own office, money would start flowing in and out of its accounts via wire transfers. The transfers were always below $10,000, though they might add up to more than that in the course of a given day. Flores would sign 25 to 30 blank checks from each checkbook, keeping two or three to use for transfers and sending the rest off to Colombia. In January 1999, Flores tried to obtain tax identification numbers for three companies he had set up for Altamirano, using two Social Security numbers provided by Altamirano that turned out to be phony. When Flores advised Altamirano that it was illegal to use bogus numbers, Altamirano gave the corporate books to a woman named Victoria Hernandez. Altamirano paid her $2,000 a week to open corporations for him and handle banking matters until April 1999, when he learned she had been stealing from him. Altamirano then gave the books back to Flores, who agreed to open and oversee the bank accounts for the same $2,000 per week in cash. Hernandez, of Glen Ridge, was later indicted as part of the money-laundering scheme and pleaded guilty. In May 1999, Flores incorporated three new companies and opened bank accounts for them at Republic National Bank, European American Bank, Chase Manhattan Bank and Citibank. A few weeks later, Republic National Bank wrote to Flores explaining that structured transactions -- designed to get around the $10,000 reporting requirement -- were illegal and that deposits followed by quick withdrawals mirror the activity of money launderers. The bank asked to meet with Flores and Altamirano to document the funds' source, but Flores and Altamirano failed to show up. Flores subsequently told a bank manager that the multiple accounts were meant to create the appearance of a profitable business for suppliers in Ecuador and to obtain credits from the government there. In January 2004, Flores was indicted along with Hernandez and three others from New Jersey. All but Flores pleaded guilty. The alleged ringleader, Altamirano, who had been indicted in 2000, pleaded guilty in 2002 to a single count, conspiracy to launder money. At first, Altamirano told investigators that Flores believed Altamirano was engaged in legal activities. A December 2000 FBI interview report describes how Altamirano lured Flores in, conducting legitimate business first and then moving into money laundering. Flores signed blank checks for Altamirano because he trusted him, says the report. Lawrence Lustberg, who defended Flores, said Altamirano "recanted these statements at trial for the purpose of securing a lesser sentence, which he successfully did." Lustberg, of Newark's Gibbons, Del Deo, Dolan, Griffinger & Vecchione, referred queries about the case to colleague Mark Berman, Flores' appellate counsel, who declined comment. Flores did get support at trial from New York solo Allan Berlowitz, who told the jury he also was taken in by Altamirano. Berlowitz had known Flores for years and had been co-counsel with him in an unrelated suit. After Altamirano arrived on the scene, Flores asked Berlowitz, who had more experience handling business matters, to assist him with Altamirano's affairs, if the need arose. In a letter to Judge Thompson after Flores' conviction, Berlowitz said he met Altamirano in May 1999 to discuss problems with two banks in New Jersey, First Union and Hudson United, and thought he was a successful South American businessman. "I hoped he would retain me," he said. Berlowitz calls Flores "a very fine person who was misled by Altamirano." The crime will likely cost Flores his license to practice law. In October 2005, New York's Appellate Division, 1st Department, suspended Flores and directed that on his release from prison, he contact disciplinary authorities and show cause why he should not be censured, suspended or disbarred. Flores began his sentence at a medium-security federal prison in Otisville, N.Y., in March 2005 and is scheduled for release next July. Altamirano was sentenced to 49 months on Nov. 8, 2004, with credit for time served and no fine. He was released two weeks later. Assistant U.S. Attorney William Fitzpatrick did not return a call for comment. NY Lawyer Disbarred for Forging Judge's Name By Tom Perrotta An appeals court in
Brooklyn has disbarred an attorney who was convicted of criminal
contempt for forging the signature of a Family Court judge during a
post-divorce proceeding against her ex-husband.
Matter of Henning
2004-06838. Lawyer Drags Himself Into Court Wearing Skirt in Protest By The Associated Press WELLINGTON, New Zealand -- A bald, mustachioed lawyer turned up at court wearing a skirt and blouse and toting a purse to protest a lack of care and sensitivity among New Zealand's male-dominated judiciary, a newspaper reported Tuesday. Rob Moodie, 67, arrived at Wellington's High Court on Monday in a navy blue woman's suit complete with diamond brooch and lace-topped stockings over his hairy legs, The Dominion Post reported. "I will now, as a lawyer, be wearing women's clothing," Moodie said. He said he wants the court to address him as "Ms. Alice" -- and that his wife and three children support his protest. His attire, he insisted, is to highlight the insensitive "old boys' network" of New Zealand's judiciary. "My confidence in the male ethos is zilch. It's a culture of intimidation, authority, power and control," the high-profile lawyer said. Moodie said that although he is heterosexual he was born with an innate understanding of the female gender. Calls to Moodie's family home rang unanswered Tuesday. His protest was prompted by frustration over a long-running case involving a farming couple held responsible for a bridge built by the army on their land that collapsed, killing a beekeeper. He told The Dominion Post that the "last straw" was last month's Court of Appeal ruling that ordered the couple -- who have already sold their farm to fund their legal efforts -- to pay the army $6,200 in costs. NY Partner Disbarred for Stealing From Firm By Anthony Lin 'Lawyers Broke Law' By Stephanie Gaskell The city's Law Department isn't following the city's own laws. The agency - which handles all of the city's legal matters - is being accused of splitting contracts into smaller ones to avoid having an open bidding process. The city charter requires any purchases over $5,000 to have at least five separate bids. But in an audit obtained by The Post, City Comptroller William Thompson found that department officials broke the rules by "creating numerous purchases just below the threshold to circumvent the rules." The department said it has done nothing wrong. "I do not believe that anything that we have done has cost taxpayers more money," said managing attorney G. Foster Mills.
Well-Known NY Lawyer Can Keep By Anthony Lin In October 2003, Dan Beech hired well-known attorney Gerald B. Lefcourt to defend him against drug charges in Nassau Supreme Court. Despite his $15,000 payment, Mr. Beech claimed Mr. Lefcourt provided no retainer agreement setting forth the terms of his representation and ultimately did little or no work on the case. He sought the return of the retainer on the grounds that Mr. Lefcourt had violated a state law requiring lawyers to provide clients with such agreements. But Manhattan Civil Court Judge Shlomo S. Hagler said in Beech v. Lefcourt, 62283/05, that the law in question could only be used as a "shield" against a lawyer collecting unpaid fees, not as a "sword" to seek the return of fees already paid. The judge said Mr. Beech might be able to seek disgorgement under a breach-of-contract theory but would need to re-file his complaint to state that claim with greater specificity. Mr. Lefcourt claimed it was not possible to define the scope of his representation at the time of his retention and that he and Mr. Beech subsequently orally agreed that Mr. Lefcourt's fee would be for his services as a consultant on the case rather than as lead attorney.
Attorney's Affair With Criminal By Mary P. Gallagher Their affair ended years ago and DeSoto is now married to someone else, but she and Scaffidi are still battling in state and federal court. Whether they were only lovers or, as he claims, also attorney and client, their present relationship is purely adversarial. The story unfolds at an unlikely intersection of legal malpractice, bankruptcy and tort law, with allegations of domestic violence and even a claim for palimony. Scaffidi is suing DeSoto and her husband, Joseph Olszewski, a Jersey City, N.J., police officer. DeSoto has counterclaimed, accusing Scaffidi of years of threats, abuse and harassment. She has filed a Chapter 7 petition and says the cost of defending Scaffidi's claims has bankrupted her. The Chapter 7 filing halted trial in Scaffidi v. DeSoto, HUN-L-521-02. But on April 20, U.S. Bankruptcy Judge Donald Steckroth lifted the automatic stay so Scaffidi could pursue malpractice claims against DeSoto's carrier and claims against the other defendants, including Olszewski. The stay against DeSoto still stands. Steckroth's decision to lift the stay, at least in part, was influenced by the fact that trial in state court had begun. In his suit, filed in 2002, Scaffidi accused DeSoto of legal malpractice, fraud, unjust enrichment and conversion, among other things. He also alleged breach of implied palimony contract, saying there was an understanding that DeSoto would support him with her law practice, though that count was dismissed. Scaffidi alleged that DeSoto was not just his paramour: She also began giving him legal advice while she was a law student at Temple University and essentially became his personal counsel when she was admitted to the bar in 1997. Scaffidi, who had a criminal record when he met DeSoto, says that after he was indicted in 1997, DeSoto convinced him to transfer his assets to her to shield them from creditors and prosecutors. She was supposed to hold them in a constructive trust for him, he alleges. Instead, when she broke off the relationship in 2001, she kept the property, emptying his bank accounts, raiding his safe deposit box and transferring assets to her husband, Olszewski, Scaffidi contends. The disputed property includes a condominium in Bedminster, N.J., a then-undeveloped piece of land in Tewksbury, N.J., half-interest in a North Carolina beach house, stock in a restaurant -- Tuscany Bistro in Pluckemin, N.J., -- and three cars: a 1994 Mercedes C280, a 1987 Porsche 928 S-4 and a Toyota Land Cruiser. DeSoto also held onto more than $250,000 in cash, diamond jewelry, coins, watches, stock and other Scaffidi property and took possession of his books and records, making it difficult for him to prove ownership, states the complaint. In July 2003, Hunterdon County, N.J., Superior Court Judge Edmund Bernhard denied DeSoto's motion to vacate Scaffidi's lis pendens on the Tewksbury property, finding that its continuation appeared necessary to prevent her unjust enrichment. It was "clear that the ownership of the property was not intended to go to Ms. DeSoto and that the proceeds were derived from Mr. Scaffidi," he held. ALLEGATIONS OF ABUSE DeSoto's counterclaim accuses Scaffidi, who is 24 years older and met her when she was 19, of beating and assaulting her and trying to control every aspect of her life and even locking her in the bathroom of her office. She obtained a restraining order against him in 2001 and he pleaded guilty to domestic violence. DeSoto asserts that Scaffidi's pursuit of the litigation is domestic violence by other means. Christina Thomas, a Bloomfield, N.J., solo who represents Scaffidi, acknowledges he violated the domestic violence law by making repeated threatening calls to DeSoto after she cleared out his bank accounts and safe deposit box and changed the locks on his office, but says there is no evidence of any physical violence. Scaffidi, a resident of Readington, N.J., has not only a criminal past but a criminal present. He was arrested in March 2005 in a gambling investigation by the Somerset County Prosecutor's Office Organized Crime and Narcotics Task Force, the state police and the Raritan Borough Police. He pleaded guilty on Aug. 19 to several third- and fourth-degree crimes involving drug possession and gambling. Prosecutors have agreed to recommend probation conditioned upon 180 days in the Somerset County Jail, 50 hours of community service and counseling and treatment for controlled dangerous substances. He has not been sentenced. Though DeSoto denies acting as Scaffidi's lawyer, she filed a third-party complaint against Somerville, N.J.'s Wronko, O'Hara & Miller, where she worked after law school graduation, alleging that the firm would be liable for any professional misconduct on her part. Hunterdon County Superior Court Judge Peter Buchsbaum dismissed the third-party action. SCAFFIDI'S SECOND SALVO Trial of the case against DeSoto got under way last June before Buchsbaum. Scaffidi was in the course of testifying when the Chapter 7 brought things to a halt. Within a week came a new suit, Scaffidi v. Olszewski, HUN-L-287-05, in which Scaffidi alleges Olszewski conspired with DeSoto to thwart his claims by liquidating or transferring the assets. DeSoto allegedly transferred to Olszewski interests in the Bedminster and Tewksbury properties, the restaurant and the vehicles, without consideration, and he allegedly turned around and sold those interests, except for the restaurant. Buchsbaum stayed the suit against Olszewski at Thomas's request, in view of the bankruptcy filing. Olszewski's lawyer, W. Timothy Howes, says that with the bankruptcy stay now lifted, his first step will be to file a motion to dismiss the claims against his client. "They couldn't get directly to Karen so they took aim at Joe." Olszewski "put a ton of his own money into the restaurant," adds Howes, of Raritan, N.J.'s Howes & Howes. As for the claims against DeSoto, only those covered by malpractice insurance can go forward under Steckroth's ruling. Since "I never represented him," says DeSoto, she expects the carrier will move to dismiss. She scoffs at the notion she could have conned Scaffidi into turning his assets over to her. "He's a grown man, not a minor or an incompetent." $200m House Louses By Samuel Maull, Ap Eight people, including two lawyers, have been indicted in a residential mortgage-fraud scheme that netted them tens of millions of dollars, state Attorney General Eliot Spitzer said yesterday. Spitzer said the defendants used dozens of straw buyers - people who claimed to be buying property and offered false job, income and other information to get mortgages - in hundreds of bank transactions worth a total of more than $200 million. The defendants would inflate the cost of a property they wanted to buy by $100,000 or more, Spitzer said. They would then give the lending bank real estate appraisals that misrepresented the physical condition and the market value of the property and the identities of the people who prepared the reports, he said. To illustrate the scheme, Spitzer cited a $310,000 house purchase in January 2004 for which the defendants obtained a $450,000 mortgage. He said they paid the owner the $310,000, paid off another $20,000, some of it to the straw buyer, and pocketed $120,000. When they defaulted on the mortgage, the bank suffered the loss, he said. Spitzer said the defrauded banks included small, large, local and national institutions. "Virtually all of the major names are involved at one point or another," he said. The attorney general also said that when the defendants defaulted on the mortgages, the banks would go after the phony mortgage applicants and property buyers. These straw buyers usually were left with legal problems and ruined credit. The defendants, Spitzer said, have been operating the mortgage scheme since at least 2001, chiefly in Brooklyn, Queens and Suffolk County. He said his investigation began in 2002, but he refused to say what tipped investigators off. Spitzer said the 83-count indictment unsealed in Brooklyn's state Supreme Court charges the eight with enterprise corruption, first- and second-degree grand larceny, scheme to defraud and falsifying business records. The defendants would face up to 25 years in prison if convicted of the top two charges, enterprise corruption and first-degree grand larceny. Seven of the eight defendants were arraigned in Brooklyn yesterday. The other one has fled. Spitzer said his office received a court forfeiture order of $8.3 million against the defendants. Defense
Attorney Faces Disbarment By Wanda J. Demarzo Moldof, a past president of the Broward Association of Criminal Defense Lawyers, signed an agreement with Miami-Dade prosecutors who investigated him, admitting the state had sufficient grounds to charge him with a felony. Prosecutors say Moldof had a role in paying $100 to get a convicted killer to change his testimony about whether one of Moldof's clients was involved in the 2001 killing of a Fort Lauderdale warehouse manager. The well-known lawyer also was fined $25,000 for the cost of the investigation by the Miami-Dade state attorney's office and the Florida Department of Law Enforcement. Moldof is said to have asked convicted killer Geoffrey Kennedy to say that one of Moldof's clients, Kevin Hoffman, had nothing to do with a murder. Moldof, according to the investigative file, promised to set up a $20,000 trust fund for Kennedy's son for switching his testimony. Moldof was accused of having his legal assistant mail a $100 money order to a pen pal who forwarded the money to a jailed Kennedy as a down payment for changing his testimony during Hoffman's upcoming murder trial. The $100 money order was ''to curry favor,'' according to the state attorney's office. ''Moldof has admitted to violating Bar rules and that he could have been charged with tampering,'' according to the March state attorney's internal memo. But Moldof said he never admitted to witness tampering and that he passed a polygraph. Kennedy and Hoffman were charged with torturing and beating Michael Sortal, 47, to death on March 15, 2001, in his Fort Lauderdale apartment. The two men then robbed Sortal, police said. Kennedy was convicted in January 2002 of Sortal's murder and sentenced to life in prison. He initially agreed to testify against Hoffman, but changed his story, claiming he acted alone. In 2003, Kennedy changed his story again, telling Fort Lauderdale homicide investigators that he was offered money to recant his earlier statement against Hoffman -- who was Moldof's client until July 30 when Broward Circuit Judge Susan Lebow replaced him. Hoffman's first-degree murder trial is still pending. State and local law enforcement officials have been investigating the allegations ever since. In 2004, Gov. Jeb Bush's office asked the Florida Department of Law Enforcement and the Miami-Dade state attorney's office to investigate possible witness tampering and allegations of professional misconduct by Moldof. Since Moldof is so well-known in Broward, Bush asked for an independent prosecutor to conduct the probe to avoid conflict. On March 23, Miami-Dade prosecutors filed a complaint with the Florida Bar after concluding that Moldof violated Bar rules. But Moldof escaped felony charges. Prosecutor Michael Von Zamft stated that while the joint investigation ''indicated that Moldof had tampered with a witness,'' felony charges would not be filed because the offense was non-violent and Moldof had no criminal history. Instead, prosecutors decided to arrange a ``deferred prosecution agreement.'' According to the plea agreement with Miami-Dade prosecutors, Moldof must admit to the findings of the joint investigation, including that he spoke with Kennedy and that he forwarded money to Kennedy. The state attorney's office also is requesting that the Florida Bar suspend Moldof from practicing law for six months to one year. He must also pay $25,000 for the cost of the two-year probe. Moldof said last week that ``there's a lot more to the story than what the state attorney's office has given to the press.'' His attorney, Mike Dutko, said ''a just and fair resolution will be achieved'' once the Florida Bar has reviewed the case. NY Lawyer Disbarred Over Extortion Attempt By Mark Fass A lawyer who attempted to
extort $100,000 from a robbery defendant in exchange for favorable
testimony from the victim has been disbarred by the Appellate
Division, First Department. http://www.nylawyer.com/display.php/file=/news/06/04/042106h Fired Prosecutor Wins $1.5 Million in Jury Award New York Lawyer LOS ANGELES -- A jury awarded more than $1.5 million to a former city prosecutor who claimed she was retaliated against and ultimately fired for reporting mistakes and misconduct by other city attorneys. The city may also have to pay Lynn Magnandonovan's legal fees, which are expected to exceed $2 million, said her attorney, Samuel J. Wells. "This was an indictment of the city attorney's office," he said. A spokesman for City Attorney Rocky Delgadillo, who is running for state attorney general, said the office is deciding whether to appeal Wednesday's decision. Magnandonovan, 55, claimed the city attorney retaliated against her because she became chief of a new hate-crimes unit as a settlement of an earlier gender-discrimination claim she had filed against the office. She said she was put on administrative leave in December 2001 and fired in 2002. The city countered that Magnandonovan, a 13-year veteran of the office, was a difficult, abrasive employee who had angered a number of Superior Court judges. NY Lawyer Suspended, Must Pay $428,000 By Mark Fass A
Hastings-on-the-Hudson-based attorney who fraudulently induced an
elderly couple to loan him their retirement savings and daughter's
college-fund has been suspended for three years and ordered to repay
the couple $428,000. In the late 1980s, Erik Veski, 52, made false
representations to his friends Robert and Aimee Vant in order to
induce them to loan him over $220,000 for a real estate venture. Solo
Challenges Courtroom By Greg Land Lewis, hearing civil cases for a Gwinnett Superior Court judge tied up with a criminal trial, begins each day in court by turning to face the U.S. flag and reciting the pledge. Lewis said he started the practice after the Sept. 11, 2001, terrorist attacks. Weissman recently complained about the practice in a letter to Lewis and the court administrator. According to Gwinnett County Court Administrator Philip M. Boudewyns, Lewis said that he would forego the pledge when Weissman is present, but will continue the practice on other days. Thursday, the judge responded officially, entering an order chiding Weissman for passing the complaint letter -- which had been marked "confidential to be opened by recipient only" -- to the Daily Report. Lewis also defended his actions by citing a 2003 Georgia Supreme Court decision that said a judge's request that jurors stand for the pledge "shows no bias, either for the State, or for one who is charged by the State with a crime." In his order, Lewis wrote that participation in the pledge by others in the courtroom "is not mandatory, requested, or required." Because he stands with his back to the audience, wrote the judge, he has no way of knowing who joins in; those who particulate do so "spontaneously," he said. "That doesn't change anything," said Weissman, a solo practitioner. The practice "still gives the improper appearance of partiality" by "creating an atmosphere that's inherently coercive and intimidating." Weissman's concerns are rooted in a January appearance before Lewis. Weissman, who was representing a client in a civil contempt proceeding, said he was surprised when Lewis opened court by requesting that everyone remain standing for the Pledge of Allegiance. "I found it professionally inconsistent with what I thought should go on within the courtroom," said Weissman. "I've been practicing law [for] 43 years in Georgia, and I've never seen a declaration of loyalty required in any court." Weissman said nothing that day, but he sent a letter March 17 to Lewis requesting that he halt the practice. "It is offensive to me as a citizen of the United States and it is objectionable to me as an attorney sworn to uphold the laws and constitutions of the United States and Georgia and as an officer of the Court," wrote Weissman, "that you apparently consider your Judicial forum to be an American Court, rather than a Court for all persons situated in America." Noting Gwinnett's large population of immigrants and noncitizens, Weissman decried the pledge recital as pressure upon court attendees "to either declare their personal loyalty to this nation ... or suffer the risk that they may be treated differently." He also wrote that such a practice may place Lewis in violation of Georgia's Canons of Judicial Conduct, particularly those barring actions that "appear to address matters which distinguish between litigants based on national origin or citizenship." "The decision did not address a judge requesting the whole court to pledge to the flag. ... It seems to me that when a judge brings his personal view of patriotism into the courtroom, everyone may feel compelled to join in the exercise." "He wants to commemorate Sept. 11? That's fine," said Weissman. "But what's that got to do with a declaration of loyalty? There was no attack on the courthouse in Gwinnett County. And it certainly does not follow, in my mind, that every person who appears there should be compelled to declare their loyalty." NY Judge
Blasts Lawyer for Putting Private Eye By Mark Fass A Connecticut developer who lost a lawsuit over the denial of his membership into an exclusive golf club, then hired a private investigator to probe possible connections between the judge's family and the defendants, has unsuccessfully moved for the judge, Westchester Supreme Court Justice Kenneth W. Rudolph, to reopen the case and recuse himself. The investigator's report listed numerous specific details about the personal lives of Justice Rudolph's family members, including references to his daughter's former job and specific details about her upcoming wedding. In denying the motion, Justice Rudolph berated solo-practitioner Richard B. Herman, who represents the plaintiff, Corey A. Kupersmith. "This unwarranted intrusion into the personal life of the jurist and my family can only be intended to intimidate the Court in the administration of justice," Justice Rudolph wrote in Kupersmith v. Winged Foot Golf Club, 20312/04. "It cannot be tolerated in the civil practice of law, and the ethics of same must be determined by those charged with the review of professional responsibilities of attorneys who practice before the bar." In the underlying case, Mr. Kupersmith pursued eight causes of action against the defendants, Westchester's historic Winged Foot Golf Club and 10 of its members, all stemming from the club's denial of his membership application. Mr. Kupersmith claimed that the defendants' actions — including fraud, defamation and breach of contract — caused him more than $1 million in damages. In September 2005, Justice Rudolph granted the defense's motion to dismiss Mr. Kupersmith's complaint. Two months later, armed with a report from private investigator Warren Flagg, Mr. Kupersmith moved for reargument and renewal, or in the alternative for Justice Rudolph to recuse himself. The motion did not allege that Justice Rudolph "exhibited actual bias," but rather that the circumstances gave "rise to the appearance of a bias and impropriety." The report listed numerous alleged conflicts of interest. Mr. Kupersmith — whose efforts to build a golf club on Martha's Vineyard also resulted in extensive litigation — claimed, for example, that Justice Rudolph failed to inform the parties that his daughter worked for one of Mr. Kupersmith's rivals. "Your Honor's daughter, Kelly Mooney, is a former competitor of the plaintiff's with GEM Communications," the motion asserted. "This information should have been known to the Court, and disclosed prior to submission of the motion." Justice Rudolph called the accusation "irrelevant" and a "non-issue." "In considering this question, it is important to review Kupersmith's original submission in opposition to the defendants' motion to dismiss. Kupersmith described himself as ' . . . a registered pharmacist, an entrepreneur, and a philanthropist [who] founded several companies,'" Justice Rudolph wrote. "The competitive relationship, if any, as may have existed between Kupersmith and GEM Communications [is] unknown to this jurist." Justice Rudolph added that his daughter worked at the company "some years ago," and as "an employee at will and neither a principal or stockholder." Mr. Kupersmith also called into question the ramifications of Ms. Mooney's then-impending marriage to a member of the defendant golf club. "Apparently, Your Honor's daughter is engaged to be married on January 1, 2006 to Mark Lionetti, a member of Defendant Winged Foot Golf Club," the motion stated. "As such, Your Honor's daughter stands to be directly negatively monetarily effected by a continuation of [this] action." 'Degrading' Accusation Justice Rudolph called that accusation "baseless, insulting and undignified and degrading," and a misreading of the club's bylaws. "Contrary to the allegation of plaintiff's counsel, the daughter of this jurist is not by marriage a member of Winged Foot Golf Club, Inc. and is not by extension of her marriage affected by the determination of this litigation," Justice Rudolph wrote. "Further, [Mr. Kupersmith's attorney Mr.] Herman, at the time of the preparation of the submission, was aware that spouses of Winged Foot members are not members as evidenced by Herman's original submissions in opposition." He concluded, "There is no legal basis for this court's disqualification or any reason within the conscience of this Court to exercise its recusal power." In a statement released by his office, Mr. Herman said, "The motion was ethically mandated to protect my client's interests," and that his client intends to appeal the decision. The defendants' attorney, Jeffrey S. Jacobson of Debevoise & Plimpton, did not return a call seeking comment. NY Lawyer Suspended for Fixing $12,000 in Parking Tickets By Mark Fass A former New York City Parking Violations Bureau administrative law judge who used his inside knowledge of the system to avoid parking tickets -- or, on the 167 times he was nonetheless ticketed over two years, to render them technically deficient -- has been suspended for three years by the Appellate Division, First Department. Manhattan attorney Glenn J. Caldwell set up a multi-pronged system to avoid fines. First, he often left his expired ALJ identification on the dashboard to suggest parking privileges he did not have, according to a referee's report. Just in case, he set up multiple safety nets to establish technical defenses. He got vanity license tags -- Y5OV26 and 4GZ25O -- that were likely to be miscited (the Os, for example, look like zeroes). He accumulated more than $12,000 in unpaid fines between June 1997 and May 1999. Although Mr. Caldwell, who also helped others avoid tickets, may not have broken any laws, his dishonesty and lack of repentance merited suspension, the unanimous panel ruled. "That respondent, a former ALJ, would utilize his expired identification card and his knowledge of the inner workings of the [Parking Violations Bureau] adjudicatory process for his own personal gain, is simply appalling," the panel held, in Matter of Caldwell, M-1475. Mr. Caldwell's statements "to the effect that he was technically not obligated to pay the summonses because they were defective . . . are demonstrative of [his] apparent belief that his criminal or fraudulent design is irrelevant and forgivable where a technical defense exists to avoid liability." Disbarred
in NY, Practicing in Jersey . . . For Now Anyway New York Lawyer On Dec. 13, the DRB voted 5-3 to reject a request by the Office of Attorney Ethics to follow New York's lead and disbar Hill's client, Geoffrey Mott, a lawyer admitted in both states, for misappropriating $16,000 in real estate funds in escrow. In most cases, lawyers disciplined in New York get the same punishment in New Jersey. And that's what Mott deserved, according to DRB members, former Morris County Assignment Judge Reginald Stanton, Louis Pashman of Hackensack's Pashman Stein and William O'Shaughnessy of Newark's McCarter & English. But Hill convinced five other members, including the board's three nonlawyers, that New York disciplinarians violated Mott's due process rights by not allowing him to present evidence he had reason to believe he was entitled to the money he took. The DRB's vote to give Mott an opportunity to develop that evidence gives him a chance at a rehearing to get a suspension, reprimand or even a dismissal in New Jersey. Link to: The story and more from the New Jersey Law Journal's "Inadmissible" column http://www.nylawyer.com/display.php/file=/news/05/12/122905h NY Lawyer Disbarred for Fraudulent Billing By Tom Perrotta Valerie S. Amsterdam, who pleaded guilty earlier this year to fraud charges, was disbarred last week by the Appellate Division, First Department. In April, Ms. Amsterdam admitted that she had accepted federal funds to represent indigent clients while she also accepted money from those same clients. Ms. Amsterdam agreed to surrender her law license as part of her plea in federal court. She also agreed to forfeit $374,000. Ms. Amsterdam has yet to be sentenced and could face as much as six years in prison. Read the decision. Lawyer Rai$es the Bar By Andy Soltis
Benjamin Civiletti, who served as attorney general under President Jimmy Carter, is the first lawyer known to reach the four-digit hourly rate, the National Law Journal reported yesterday. That puts him in the ranks
of superstar ball-players like $1,700-an-inning Alex Rodriguez. "I don't feel like a superstar," Civiletti said with a laugh, adding that the value and speed of his services helps justify the price. "It's the amount of the bill, not the rate, that matters," he said. "I can get things done in an hour that would take some other lawyers two weeks or 10 days." The law journal's annual survey of the nation's 250 largest firms found that the high cost of lawyering is escalating and not just for senior partners with marquee names. Baltimore-based Civiletti, who is chairman of the law firm Venable LLP and specializes in counseling international banks and multinational firms, charged $810 an hour in 2004 before the rate rose to $1,000 this year. But at least one associate in another firm, Dorsey & Whitney, charged $835 an hour more than most partners earn. The highest hourly rate for an associate last year was $550, the survey said. "It's been outrageous for a while," attorney John Toothman said of the high cost of legal fees. "The $400-an-hour and $500-an-hour barrier for partners was broken four or five years ago, in Manhattan, L.A. and some other places," said Toothman, president of The Devil's Advocate, a legal-fee management firm. The lawyers who can command the highest rates tend to be retired government officials dealing with Fortune 500 companies on sensitive legal matters. That's not out of line "for legal advice in 'bet-the-company' situations or when a corporation is contemplating a megadeal worth billions," said the journal's editor, Rex Bossert. The big-bucks rates may be a bit deceptive because many large firms offer discounts and relatively few clients pay the top rate. "We call them vanity rates, the rates that firms like to show off like a new car or a trophy wife," Toothman said. "It's almost a marketing tool these days." NY Lawyer
Suspended for By Tom Perrotta In a highly unusual move, an appellate court has suspended a former NY prosecutor for three years for lying to a judge about the whereabouts of a witness in a murder trial he was conducting three years ago. The Appellate Division, Second Department, in Matter of Stuart, 2003-09401, said that the conduct of Claude Stuart struck "at the heart of his credibility as a prosecutor and an officer of the court."Mr. Stuart's suspension, stemmed from the 2002 trial of Tyrone Johnson for the murder of a Jamaica, Queens, nightclub owner during a failed robbery. Mr. Stuart told Queens Supreme Court Justice Jaime A. Rios that he did not know the whereabouts of a woman whose testimony might have contradicted the account of a key witness to the alleged murder. Four days earlier, however, Mr. Stuart and two detectives interviewed the woman at her job (NYLJ Nov. 13, 2002). "The respondent falsely indicated on the record that he still had no knowledge of her whereabouts," the Second Department wrote in its unanimous disciplinary ruling last week, confirming a three-year suspension recommended by a special referee. The court said that Mr. Stuart's claim that he did not act out of venality and his other attempts at mitigation did not excuse his conduct. Two ethics experts said they could not recall the last time an attorney had been either suspended or disbarred in New York State for misconduct while working as a prosecutor. "I don't know the last time this has happened," said Bennett Gershman, a professor at Pace Law School and the author of "Prosecutorial Misconduct," a treatise. "It's startling to hear about that." Barry Kamins, a partner at Flamhaft Levy Kamins & Hirsch and the former chair of the disciplinary committee for the Second and Eleventh Judicial Districts, said he did not know of a suspension or disbarment of a prosecutor in the last 20 years. "On occasion there may have been a letter of caution issued to a prosecutor, but I cannot recall an assistant district attorney ever being suspended or disbarred in this state for misconduct," said Mr. Kamins, who chaired the committee from 1994 to 1998. A Previous 'Caution' Letters of caution are private, but in its ruling last week, the Appellate Division revealed that Mr. Stuart, 44, had received one in 1999 from the Ninth Judicial District for another incident of prosecutorial misconduct that led to a new trial in a 1995 attempted murder case. The Second Department ordered the new trial because Mr. Stuart made inflammatory remarks to the jury during his summation, gave his opinion regarding the truth of a witness' testimony and insinuated that a gun recovered from the defendant might have been used in the shooting in question, despite knowing that ballistics tests conclusively established that the gun was not used in the crime. "The prosecutor's conduct in advocating a position which he knew to be false was an abrogation of his responsibility as a prosecutor," the court wrote in People v. Walters, 251 AD2d 433 (1998). Mr. Stuart, who now works at the firm of Brand Glick & Brand in Garden City, did not return a call seeking comment. His attorney, Jerome Karp, also did not return a call. District Attorney Richard A. Brown informed Justice Rios of the misconduct in November 2002 and agreed not to oppose a motion for a retrial. Mr. Stuart was demoted and resigned from the office a month later. Mr. Johnson was retried, convicted and sentenced to 20 years in prison. In his disciplinary proceeding, Mr. Stuart asked the Second Department to disaffirm the referee's report largely based on his 12-year record in the district attorney's office and his character. He said he had handled more than 70 felony trials and cited his service in the U.S. Army JAG Corps Reserve, as well as his devotion to the Dix Hills United Methodist Church. Mr. Stuart also presented character letters from two unidentified justices of the Supreme Court in Queens (the court's disciplinary records were yet to be made public at press time). In addition, the court heard testimony from Mr. Stuart's wife, his military chaplain, his church pastor, and professional and social acquaintances. Prosecutors have long been less likely to receive serious punishment from disciplinary committees, something that defense attorneys have complained has as much to do with politics as ethics. Professor Gershman noted that investigating prosecutorial misconduct is often difficult. He added that defense attorneys are often reluctant to report prosecutors to disciplinary committees, as they work with them on a regular basis and need to maintain a good reputation for the purpose of plea bargains. "Defense attorneys and long-term prosecutors engage in mutually beneficial conduct," Professor Gershman said. "I think you see a reluctance by judges for the same reason. You don't want to get a reputation as someone who is a whistleblower." Mr. Gershman said that in Mr. Stuart's circumstances, disbarment would not have been uncalled for. However, he added, "A three-year suspension from law practice is pretty stiff." The Second Department said Mr. Stuart could apply for reinstatement six months prior to the completion of his suspension. Presiding Justice A. Gail Prudenti and Justices Anita R. Florio, Howard Miller, Robert W. Schmidt and Thomas A. Adams concurred on the ruling. $42m 'Heir' Blitz By Dareh Gregorian What do you get when you ask a lawyer for a discount? A $42 million bill. At least that's what 80-year-old Alice Lawrence says happened to her. In papers filed in Manhattan Supreme Court, Lawrence, the widow of real-estate magnate Sylvan Lawrence, says she got socked with $42 million in legal fees by the firm of Graubard Miller for a few months' estate work after she thought she'd negotiated herself a discount. "She now winds up having to pay more," said her new lawyer, Leslie Corwin, who contends the normally savvy businesswoman was recovering from surgery and on medication when she signed the "deal" this past January. Her suit notes the $42 million would be on top of the $25 million she's already paid the firm for the work it's done for her over the past two decades and says that's just grotesque. "If the 2005 retainer agreement were enforceable, the totality of the fees collected from [Lawrence] in connection with Graubard's legal representation would thus be over $67 million, an unconscionable and excessive amount," the suit says. The suit also cites an odd incident from 1998, when three of the firm's lawyers convinced Lawrence to pay them what they said were routine personal bonuses totaling $5 million and then got her to shell out another $2 million to cover taxes on the gifts. Corwin said the bonuses were anything but routine. "I've been practicing law for over 30 years, and I've never heard of such a thing," he said. The firm says it did nothing wrong and that Lawrence is the one trying to cheat them. The lawyer representing the firm, Mark Zauderer, admitted the fee was "spectacular," but said his clients had gotten Lawrence "a spectacular result" a $105 million settlement. He called the suit "a Monday morning attempt to resist payment of a legitimately agreed upon fee," and noted the firm has helped collect hundreds of millions of dollars for Lawrence over the years. He said his clients had taken a risk with the January agreement by agreeing to substantially lower their regular fees in return for a 40 percent contingency fee. Lawrence's husband was one of the largest commercial real-estate landlords in the city and was running a company with a portfolio valued at over $1 billion when he died in 1981. Their 12 million square feet of property included the former New York Post building at 75 West St. His death set off an ugly court battle between Lawrence, the main beneficiary of her husband's estate, and her brother-in-law Seymour Cohn, the executor of the estate. Lawyer Guilty of Fax Forgery Zach Haberman A Queens lawyer was convicted of forgery yesterday for inventing a judge's decision and faxing it to the opposing lawyer in his civil case against an investment firm. Perry Reich, 56, who once represented child killer Joel Steinberg, dropped his head into his hands after hearing the guilty verdict —— which took the jury less than an hour to reach. In the June 2003 fax, Reich made it appear that a Brooklyn federal judge was removing herself due to mistakes she made with the case. Chicago Lawyer "Loathed" at City Hall By Mike Robinson CHICAGO -- Michael L. Shakman will never win any popularity contests at City Hall. The mild-mannered 62-year-old attorney has spent three decades fighting Chicago's once-mighty political machine by trying to cut out its heart -- the patronage system. A court order bearing his name bars politicians from building armies of doorbell-ringing, favor- doing precinct captains and rewarding them with city jobs for getting out the vote. It also has made Shakman a name that City Hall loves to hate, particularly after last week, when federal investigators charged two city officials with illegally lining up jobs for people with political connections. By week's end, Mayor Richard M. Daley proposed to turn municipal hiring over to an independent commission. "Hate is too mild a word," said Don Rose, a political consultant, of how Shakman is viewed by the powerful. "They loathe him. They absolutely loathe him. He destroyed their system." The order, known as the Shakman Decree, was designed to weaken Chicago's machine politics. The city has 38,000 employees, with 1,000 exempt from the order. Specifically, the order aimed to prevent any recurrence of what happened in 1969 when Shakman lost a race for delegate to the Illinois Constitutional Convention by 600 votes. Legions of city workers had orders from higher ups to bury him -- or else. "I thought it was a once-in-a-lifetime opportunity to participate in revising the structure of Illinois government, in the areas of financing, of ethics, of civil rights," says Shakman, who was not even 30 at the time. The Regular Democratic Organization's precinct workers were sympathetic -- somewhat. "They told me, 'You're a nice young fella, and I hope you win, but I'll lose my job if I don't work against you, so that's what I'm going to do,'" Shakman recalls. They were the organization's veteran shock troops who went all out to win because they knew they would be fired from their city jobs unless they delivered their precincts to hand-picked candidates. The new state constitution was guaranteed to affect how much state money Chicago got, the way judges were chosen and a host of other matters that City Hall cared deeply about. Shakman sued, claiming it was unfair to use city workers as election muscle. The lawsuit was thrown out, but later reinstated by the 7th U.S. Circuit Court of Appeals. The city ended up settling. City officials agreed to be barred from firing municipal employees for political reasons -- but only after Illinois Republicans signed an agreement to be bound by the same restriction. In 1983, the Shakman Decree was amended to bar politics as a basis for hiring. Last week, Robert Sorich and Patrick Slattery were charged with fraud for their alleged role in a scheme in which interviews and evaluation scores were falsified to enable well-connected applicants to land jobs. Attorneys for both men say they will fight the charges. Meanwhile, Daley responded by proposing to take the hiring system out of City Hall and turn it over to a hiring commission that would supposedly be politics-free. Shakman says the federal charges show that "a kind of civil lawlessness has been going on," encouraged by "an ethos of disobedience that exists at a very high level in Chicago." While he is aware that his decree has not sparked as much reform as he would like, Shakman thinks it qualifies as a revolution in Chicago politics that will last a long time. "Perhaps I've had more impact than I would have if I'd been elected to the Constitutional Convention back in 1969," he said. Attorney's Request for Fee Hike Called "Outrageous" By Warren Lutz An Oakland, Calif., attorney who blasted the University of California Regents for wasting taxpayer money during a seven-year lawsuit is asking for $5.4 million in fees and costs -- 2 1/2 times what his client got. But Gary Gwilliam, of Gwilliam, Ivary, Chiosso, Cavalli & Brewer, says the UC Regents should have settled the whistleblower case involving a former Lawrence Livermore National Laboratory employee when it had the chance. "They could have settled this case for about $500,000 early on," he said. "The fact that they refused ... and continued to drag it on is their fault." Gwilliam's request for attorney fees was made with co-counsel Jan Nielsen, a solo practitioner in Clayton. It was based on a "lodestar enhancement" -- that a normal fee "is not reasonable by marketplace standards." Such enhancements are granted to encourage attorneys to take difficult cases. Using a fee multiplier of 2.0, the total request of $5,017,034.50 more than doubled their client's award. It was made earlier this month in the Alameda County Superior Court case Kotla v. UC Regents, CV014799. The Regents' attorney, Heller Ehrman partner Patricia Gillette, called Gwilliam's request for fees and costs "outrageous." "Gary likes to talk about how much taxpayers' dollars are being wasted by the lab, and then he has the audacity to ask for $5.4 million in his plaintiff's case," Gillette said. She added that she was speaking on behalf of herself and not her client. Kotla, who worked as a technician at the UC Regents-owned lab, claimed she was fired for testifying in support of a co-worker's sexual harassment claim. In Kotla's first trial, in 2002, jurors awarded her $1 million in damages, which a trial judge later reduced to $745,000. The 1st District Court of Appeal sent the case back last year after throwing out testimony by an expert witness for the plaintiff. In a second trial ending in March, Kotla won $2.1 million. In addition to a 25-page memo filed June 24 in Alameda County Superior Court, Gwilliam and Nielsen submitted more than 600 pages of documents they said supported the notion that Kotla's case was extremely difficult, time-consuming and risky. Hired on a contingency fee basis, they said their costs and fees were expected to exceed their client's award. The two attorneys worked more than 4,500 hours over two trials that covered 96 days, according to the memo, and the fees totaled $2,543,923.50, while costs were $381,880.96. Kotla filed her suit in 1998 and has employed several attorneys since. But Gillette isn't buying it. "It's not an unusual case, and people who are employment law experts would understand that," she said. "It's a retaliation case, and it's a pretty run-of-the-mill retaliation case." The Regents fired Kotla in 1997 for allegedly making personal phone calls and using lab computers for a friend's outside business. Kotla claimed she was fired in retaliation for her testimony in support of Kim Norman, a secretary who filed a sexual harassment claim against a male manager. Although it's relatively uncommon for attorney fees to exceed their client's award, legal ethics experts say it does happen. "When you have cases that are highly difficult cases, which Gary Gwilliam has, you have to consider the degree of difficulty in obtaining the result," said legal ethics expert Richard Zitrin of Zitrin & Mastromonaco. "I can't say whether it's the right amount. But it doesn't seem to be off the charts in terms of the costs." Gwilliam and Nielsen's request is being challenged by the Regents in a hearing scheduled next month in Superior Court Judge Patrick Zika's courtroom. "The judge has got to take a hard look at the memorandums and the supporting documents," said Long & Levit partner Joseph McMonigle, also an expert in legal ethics. But Gillette said Gwilliam was partly to blame for the seven-year legal battle because a plaintiff's witness "screwed up" during the first trial, which led to an appeal and a second trial. "That didn't have to happen," Gillette said. Gillette also claimed Gwilliam's hourly rate of $625 "tops just about any lawyer's rate that I know." But Gwilliam believes he's worth it. "I am one of the most experienced lawyers in the Bay Area," he said. "All I'm doing is asking for the marketplace rate that a lawyer with my background and experience will get." Gillette would not disclose her hourly fee. Gwilliam and Nielsen claim in their court brief that in a recent case, Heller Ehrman charged up to $707 an hour for its partners and up to $446 for its associates. Gwilliam said he expected the other side to "argue and nitpick." "They could have settled this case for about $500,000 early on," he said. "I don't think we're the ones that are costing taxpayers money. They are."
Ex-lawyer's Bankruptcy Hearing Packs Courtroom By Jack Dolan But at least one lawyer, who sat silently starring at Robles throughout the two-and-a-half hour hearing, could pose a bigger problem for the former ``king of torts.'' A prosecutor from the U.S. attorney's office in Miami, who declined to give his name, filled pages of his yellow legal pad with notes, and appeared delighted when Robles offered to waive his right to silence in the hotly contested bankruptcy case. The FBI has been systematically interviewing Robles' former clients who say he stole their money, and a federal grand jury has been convened to review the evidence and decide whether to press charges, said Tom Tew, a lawyer who now represents many of those clients. Robles' practice collapsed in November 2002 after the Florida Bar Association investigated charges that he stole $800,000 of his clients' money. Tew accused Robles of taking more than $13 million. Tew claims Robles pocketed thousands of settlement checks he won from asbestos manufacturers and used the money to fuel a lavish lifestyle. For years, Robles passionately condemned asbestos manufacturers for putting profits ahead of his clients' lives. Robles' attorney, Alan T. Dimond, said the cash flow to his client ''summarily stopped'' when many of those companies went bankrupt several years ago. Their financial ruin was attributable, at least in part, to the heavy burden of paying thousands of settlements in cases brought by Robles and other attorneys. Dimond said the allegations that Robles stole his clients' money are ``ridiculous.'' Much of Thursday's hearing was consumed with competing estimates of how much money might be owed to Robles' two law firms for cases that have not been resolved. According to Dimond, that amount could be as much as $135 million. But the attorneys who took over those cases and who asked U.S. Bankruptcy Judge Robert A. Mark for a 75 percent cut of the fees, say the best-case scenario is more like $24 million. Robles still owes at least $18 million: including bank loans to keep his business afloat, alimony payments to his ex-wife and several mortgages on his Key Biscayne mansion. But those debts may be the least of Robles' problems. Every lawyer in the room -- at least 20 -- leaned forward, riveted, after the judge asked Robles whether he would testify under oath about his fees in the asbestos cases, among other things. Robles agreed after a tense huddle with his lawyers. His testimony would come at a later hearing. Perhaps most interested in the exchange was the federal prosecutor, who could not stifle a grin when Robles offered himself up for questioning. Anything Robles says under oath in bankruptcy court could be used against him later in a criminal case. Greed Before the Court New York Post Gov. Pataki and the man who would succeed him, Attorney General Eliot Spitzer, are of one mind regarding that $350,000 cash bath ordered up for three well-connected lawyers by a Manhattan Supreme Court judge. State lawyers will go before Judge Leland DeGrasse today to demand that the jurist reject as excessive the lush "masters fees" requested by William C. Thompson (the city comptroller's father), Leo Milonas and John Feerick. The fees, first reported by Post State Editor Fredric U. Dicker, are meant to compensate the trio for ratifying DeGrasse's Campaign for Fiscal Equity demand that Albany lavish billions of dollars on public schools statewide in addition to the billions already spent. The order was meant to extract the maximum amount of cash from the state treasury on behalf of New York's education cartel even though DeGrasse himself admits that there is no discernable connection between school spending and school performance. But Thompson, Milonas and Feerick know big bucks when they see them they demanded hundreds of dollars an hour, basically for simply agreeing with DeGrasse. And DeGrasse will decide potentially lightening the state fisc by the above mentioned $350,000. Now Pataki and Spitzer are expected to demand that the judge nix their request on the grounds that the fees are "exorbitant and excessive" as Pataki called them yesterday. The problem here is that DeGrasse picked the three in the first place, in all likelihood knowing full well what they'd charge. Clearly, he wasn't disappointed. So good luck to Pataki and Spitzer and stay tuned. Meanwhile, it would be well to keep in mind that DeGrasse's ruling never mind his rhetoric was not delivered in the service of sound public schools. New York's public-education cartel its hide-bound teachers' unions and unresponsive administrators everywhere are meant to be the principal beneficiaries, not the kids. Parents in search of well-functioning schools can take no comfort from the ruling because there's not an iota of accountability to be found in it. It's all about money $350,000 up front for three friends of the judge, and billions more over time. It's the New York way.
It's about the Money Gov. Pataki flipped his lid when he saw the bill $353,000 from the three court- appointed "special masters" in the so-called Campaign Fiscal Equity school-funding case, but it really was a bargain. Really and truly. That sum is but a pittance of the total $60 billion award the trio recommended for schools throughout the state over the next five years. So New York can be thankful that William C. Thompson (the father of City Comptroller Bill Thompson), Leo Milonas and John Feerick kept their sights as low as they did. But, given that the lawsuit from beginning to end is about squeezing the maximum amout of money from the state fisc, it's amazing that the trio exercised any restraint at all. Why should they be any different? The three men were tapped by Manhattan Supreme Court Justice Leland Degrasse last year to calculate the cost of a "sound, basic education" for New York City school kids so as to satisfy a lawsuit lodged by the state education cartel, the "equity" campaign. They came up with a figure of $30 billion over five years (above the $13 billion a year spent now) and the same, implicitly, for upstate schools. Last month, DeGrasse officially endorsed that finding (usurping the governor's and state Legislature's constitutional budgeting duties in the process). But everyone who's watched this case knows that the whole point of it, from the start, was to raid the state's fisc. Teachers and other educrats would hit the jackpot, it was believed. Even the lawyers who pressed the case for them those hired by CFE demanded $20 million from the state. (And these were "pro bono" lawyers ostensibly working for free!) So why shouldn't Thompson, Molinas and Feerick belly up to the trough? And consider this: Their $353,000 fee is not based on their usual rates; it's actually lower. Thompson, for example, generously trimmed $100 off his usual $600-an-hour ($10-a-minute) charge. Molinas dropped $235 off his $735 hourly fee. Yes, to the average Joe it's obscene. And Gov. Pataki, of course, went through the roof when he got the bill. The three masters are "asking taxpayers to pay them $350,000 for a few months of part-time work," a Pataki aide fumed. But why should anyone expect the masters to exercise anything approaching self-control? Nobody else has. And that is the real horror of this case. School Billing Outrage By Fredric U. Dicker ALBANY The three part-time "special masters" who convinced a judge that $5.6 billion more a year must be spent on city schools just billed the state nearly $353,000 for their services, The Post has learned. The massive fees sought by the politically-connected lawyers include $114,500, or $500 an hour, from William C. Thompson, father of City Comptroller William Thompson; $124,370 from former state Judge E. Leo Milonas, $500 an hour plus expenses; and $113,875, or $500 an hour, from former Fordham Law School Dean John Feerick. Gov. Pataki, through a spokesman, called the fees "outrageous," and urged that they be rejected. The elder Thompson told the court that he was giving the state a discount from his usual $600 an hour. But he did request an extra $375 for the rental of a satellite phone. Milonas said he, too, was giving the state a discount from his usual $735 an hour. All the fees were for appearances at public hearings, private meetings and for legal research from August through Nov. 30 of last year, as well as the cost of additional legal assistance, court papers show. The three lawyers served as "special masters" to Supreme Court Justice Leland DeGrasse of Manhattan, who has been presiding over the landmark Campaign for Fiscal Equity lawsuit that charged the state with short-changing city schools. DeGrasse's explosive February decision requiring a massive increase of state and New York City aid to city schools is being appealed by Pataki, who proposed about one-third as much to city schools. Kevin Quinn, a spokesman for Gov. Pataki, called the fees "exorbitant" and "outrageous." "They're asking taxpayers to pay them some $350,000 for a few months of part-time work." NY
Lawyer's Federal Fraud Trial Begins By The Associated Press BRATTLEBORO, Vt. -- A federal fraud trial has started for a disbarred New York attorney who founded a debt reduction firm that once operated in Bennington. The government on Tuesday accused Andrew Capoccia of stealing millions of dollars from the firm, while Capoccia's defense attorney blamed former state Rep. Howard Sinnott and others for plundering client escrow accounts and forcing the Law Centers for Consumer Protection into bankruptcy. "The loss here occurred not because of Mr. Capoccia, but in spite of him, in spite of him," defense attorney William Dreyer told the jury. Assistant U.S. Attorney James Gelber said Capoccia had used the firm as "his personal piggy bank." Capoccia, 62, of Guilderland, N.Y., is charged with multiple counts of conspiracy, transmitting stolen property, wire fraud, mail fraud and money laundering. Capoccia founded the Law Centers' parent firm in Albany, N.Y., in 1997. He promised to reduce consumers' credit-card debt by 50 percent or more by negotiating directly with credit-card companies. In 2000, Capoccia was disbarred in New York for his unorthodox legal tactics and the firm moved to Bennington. Sinnott, who served as the town's select board chairman, claimed to be the owner of the firm. Although Capoccia was briefly ousted at one point, he continued to run the business up until March 2002 when the office was investigated by the FBI, according to the government. Gelber told the jury that while Sinnott supposedly bought the firm once it moved to Vermont, he only served as a figurehead. "Mr. Capoccia's operations got a new name, a new address. It was the same old firm, run by the same man," Gelber said. "No decisions were made without his approval. Mr. Capoccia was still the boss." Dreyer argued it was Sinnott, Daly and their colleagues who sowed the seeds of the firm's destruction, he said. The Law Centers for Consumer Protection was forced into bankruptcy in January 2003, owing thousands of clients about $23 million in fees. Sinnott and fellow lawyer Thomas Daly pleaded guilty to felony charges last month. Their testimony is expected to figure prominently in the case against Capoccia, according to attorneys. Four other former Law Centers employees have pleaded guilty to a variety of charges and are awaiting sentencing. They are also on the witness list. Attorney Suspended for Lying in Her Own Divorce New York Lawyer Kathleen Scott Chasar, a Lawrenceville divorce lawyer, presumably would not advise any client to do what she did in her own divorce case. She just drew a three-month suspension for offering false evidence and statements. Chasar and her secretary submitted false certifications denying her husband's allegations that she received fee payments and paid the secretary in cash, the Disciplinary Review Board found. During cross-examination, the secretary said she lied in the certification at Chasar's request. Chasar then admitted that her certification was false, that she had intended to mislead the court and that she paid cash to avoid paying withholdings and taxes. The matrimonial judge referred the matter to the Office of Attorney Ethics, stating that the husband's claim that Chasar was "fast and loose with her records" was a fair charge, the DRB said. The state Supreme Court issued the suspension order Feb. 24. Chasar did not return a call seeking comment. "He's invested millions into these properties over the years," Miller said. Candyman Bronx Lawyer Is 'Balled' Out By Dareh Gregorian A Bronx Family Court lawyer has been suspended for six months because of his peppermint potty mouth. The lawyer, Robert Kahn, admitted that "he frequently consumed peppermint-ball candies in the courthouse and, when offering candies to adversarial female staff attorneys, consistently made sexually offensive comments," a state Appellate Division ruling released yesterday says. One of Kahn's crude candy comments: "Do you want to suck one of my balls?" "When told by female attorneys that they were offended by his remarks, [Kahn] replied, 'If you're so damned refined, then why do you understand?' " the ruling said. Kahn, 67, "conceded that he never made similar comments to men or to Family Court judges." The panel of judges issued the suspension after finding that Kahn who's classified an 18-B lawyer, meaning he works for clients too poor to hire their own lawyer regularly made "unseemly comments in the courthouse." One of those comments was aimed at a lawyer for the city Corporation Counsel's Office a woman he referred to as "pig vomit on my shoes." On another occasion, when an overweight attorney was about to enter the courtroom, Kahn yelled, "Here is the elephant, she's coming in. Who wants tickets? Come see the show." Kahn also once invited a female adversary to guess the bra size of a 14-year-old client. Kahn couldn't be reached. His lawyer, Marvin Raskin, declined comment. Kahn admitted wrongdoing to the disciplinary committee, but argued he should be censured, not suspended, because he "has begun psychotherapy to address the problem." The Appellate Division said Kahn's misconduct went back to 1991. Game Over for Lawyer's $2m 'Theft' By Zach Haberman A Brooklyn lawyer crapped out yesterday after she was busted for pilfering more than $2.6 million from her clients' cash to go on big-money gambling jaunts and pay her own debts. Valerie Simuro whose gambling addiction has left her nearly penniless, according to a law enforcement source turned herself in to authorities yesterday after a joint state and federal probe found her stealing huge sums of money from the escrow accounts of at least eight clients. Simuro, 56, is accused of randomly transferring funds from those accounts into her business account, from which she would freely withdraw the cash, the source said. The Bay Ridge-based lawyer, who was slapped with numerous counts of grand larceny, would take her nearly 100-year-old father and her boyfriend on gambling sprees to Las Vegas, Atlantic City and Foxwoods, the source said. Much of the money she swindled was used to pay off her own substantial gambling debts, the Brooklyn DA's office said. In one instance, Simuro stole $230,000 from the account of a Brooklyn man staying at a veterans hospital in Fort Hamilton, said Postal Inspectors spokesman Al Weissmann. She then forged a letter to the man, who was not identified, indicating the money was all there. Her lawyer did not return calls seeking comment. Simuro now faces disbarment and imprisonment for up to seven years |
A
lawyer allegedly brought in by Brooke Astor's son to work on her
estate has a history of becoming close with elderly millionaires -
and then making a killing off their estates. 
In
the era of the $10-plus movie ticket and $3,000-a- month studio
apartment, it was inevitable: A top-notch lawyer is charging $1,000
an hour. |
A Feast
|
