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Bad Call Raises Judge’s Ire

Posted Jul 16, 2007 4:32 PM CDT
By Debra Cassens Weiss

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A federal judge has notified federal prosecutors about the conduct of three lawyers defending a mortgage company.

U.S. District Judge Harold Ackerman sent letters summarizing the facts to the chief judge for the District of New Jersey, federal prosecutors in Newark, and New Jersey’s Office of Attorney Ethics. They concern lawyers with Cole, Schotz, Meisel, Forman & Leonard of Hackensack, N.J.

The letters say the law firm has acknowledged that an associate, acting with knowledge of two firm partners, asked a bank about an opposing counsel's personal mortgages and loans. The associate asked if a client could purchase the mortgages, according to the letters.

Ackerman suggested in a June 28 hearing that perhaps the associate made the call so his client could "put the squeeze" on the opposing attorney.

Ackerman's letter to U.S. Attorney Christopher J. Christie says the facts warrant the referral. “At this point, the court must turn to its chief law enforcement officer for a thorough inquiry into this state of affairs,” it reads.

Steven Klein, administrative chair of Cole Schotz's litigation department, says the law firm admits to a mistake but is hopeful prosecutors and ethics investigators will go no further after a preliminary investigation.

The firm contends the associate's phone call “reflects an error in judgment, but that does not amount to an ethics violation or to criminal conduct,” he told ABAJournal.com.

The opposing attorney, Gregg Trautmann, represents consumers suing Cole Schotz’s client, Kennedy Funding Inc. Jeffrey Wolfer, the president of Kennedy Funding, has maintained his company was unaware of the associate's call.

The associate who placed the phone call ended up speaking with the bank’s outside general counsel, who just happened to be employed as an expert witness for Trautmann in the litigation, according to Trautmann’s letter to the judge complaining of the conduct.

The law firm has apologized, saying in a letter to Ackerman that it “made the inquiry without due consideration and in excessive enthusiasm for our client's cause.”

Ackerman expressed surprise at the lawyers’ conduct, saying the law firm has a good reputation, according to transcripts of a June 28 hearing. “My reaction was this is shameful,” Ackerman said. “Lawyers should not behave in such ways, under no circumstances.” (See this ABAJournal.com post for details.)

Trautmann told ABAJournal.com it’s rare for a federal judge to refer attorney conduct to federal prosecutors, and he thinks the U.S. attorney will take the allegations seriously.

“I’m sorry that it had to come to this,” he said. “I think it’s absolutely beyond the pale that attorneys would attack their adversary on a personal level such as this. I think it’s unprecedented and I’ll await the result of the U.S. attorney’s investigation.”

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