Fund paid out record $12.3M to clients of dishonest New York attorneys in 2015
A record $12.3 million was paid out from a state fund in 2015 to the clients of dishonest New York attorneys.
However, executive director Timothy Sullivan of the Lawyers’ Fund for Client Protection said the disbursements, which were the highest in the fund’s 33-year existence, were primarily due to five lawyers, reports the New York Law Journal (sub. req.).
“I don’t believe it’s a trend of seeing our numbers of dishonest lawyers going through the roof,” O’Sullivan told the legal publication. “But, for some reason, we got hit substantially within this one year.”
Also unusual, according to O’Sullivan, was that three of the five—real estate lawyer Robert Fontanelli and personal injury attorneys Stephen Krawitz and Donald B. Rosenberg—stole funds from client settlements. A more common form of attorney theft is stealing from client escrow accounts.
The total amount paid out to clients of the five attorneys added up to more than $7.5 million, with tax and estate planning attorney William Parente leading the list at $2.03 million, followed by Krawitz at $1.73 million, Rosenberg at $1.44 million, Fontanelli at $1.36 million and real estate attorney Timothy Griffin at $1.05 million.
Authorities said Parente committed suicide in 2009 after killing his wife and two daughters, apparently as a Ponzi scheme he had been operating was about to come to light. His estate was still winding down in mid-2014, when a Nassau Count Surrogate’s Court opinion noted that some $34 million in claims had been made. Justia provides a copy of the opinion.
All lawyers on whose behalf payments were made have either been suspended or disbarred or have died, the article notes.
The money to reimburse clients comes from an assessment on attorney registration fees.
Related coverage:
Garden City Patch: “Parente Case Profiled In New Book”
Staten Island Advance: “Disbarred lawyer admits to real-estate swindle”
See also:
New York Law Journal (sub. req.): “Disbarred Lawyer, 2 Others Charged in $5M Theft”
New York Law Journal (sub. req.): “Disbarred Attorney Admits Defrauding Clients of $5M”
