These 'Dishonest' NY Lawyers Led to $10.6M in Victim Payouts
Reimbursements last year from the Lawyers' Fund for Client Protection included millions of dollars related to ex-law firm leader and imprisoned Ponzi schemer Marc Dreier and former prominent New York personal injury lawyer Stuart Schlesinger.
April 12, 2018 at 12:33 PM
3 minute read
The original version of this story was published on New York Law Journal
A New York fund that reimburses clients who have suffered financial losses caused by lawyer misconduct paid more than $10 million last year, the second-largest single-year payout in the 35-year history of the fund.
The Lawyers' Fund for Client Protection is an independent public trust, primarily financed by New York attorney registration fees, that reimburses law clients for “losses caused by dishonest conduct of former New York State lawyers” such as theft of real estate escrow funds, estate assets and settlement proceeds, as well as unearned legal fees paid to a lawyer who falsely promised to render legal services.
Last year, money from the fund went to reimburse victims of several high-profile ex-attorneys. For instance, about $1.3 million of the payout is tied to Marc Dreier, imprisoned for a Ponzi scheme involving fake promissory notes and embezzlement of client funds; about $2.8 million related to former prominent New York personal injury lawyer Stuart Schlesinger, who stole from settlement money; and $400,000 due to Michael Lippman, a disbarred lawyer in Yonkers who stole from clients in various real estate and estate planning cases.
The fund said the $10.6 million payout in 2017 is second only to 2015, when $12.3 million was awarded. The 2017 funds went to reimbursing losses caused by 87 now suspended, disbarred or deceased lawyers, the fund said, but 10 former attorneys were responsible for more than 70 percent of the total payout.
In an annual report about the history of the fund and last year's payout, the fund's trustees said it was their experience that most losses involve solo practitioners, the majority of whom are male and middle-aged. Misconduct is often traced to alcohol or drug abuse and gambling, while other causes are economic pressures, mental illness, marital, professional and medical problems, the trustees said.
Trustees of the fund are recommending specific proposals to detect and prevent further abuse, such as requiring banks to provide notice to the Lawyers' Fund of any overdraft on an attorney trust or escrow account and prohibiting overdraft protection on such accounts by amending the rules of professional conduct.
Meanwhile, the fund continues to receive claims for potential payouts. The annual report said there were 351 claims filed with the Lawyers' Fund last year, alleging $29.2 million in losses, a decrease from the $42.8 million in alleged losses from the previous year.
Below, from the fund's annual report, is the full list of suspended, disbarred or deceased lawyers whose conduct led to reimbursed losses in 2017:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllTrending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250