Sunday, August 09, 2015

Head Of NYS Fund That Repays Victimized Clients Of Thieving-Lawyer Escrow Ripoffs Calls For Statewide System For Disbarring, Criminally Prosecuting Pilferers; Fund Coughs Up About $6 Million Annually

In Albany, New York, The Associated Press reports:
  • The New York fund that repays cheated law clients called [] for a statewide system for disbarring and prosecuting attorneys who steal from their clients.

    Timothy O’Sullivan, executive director of the Lawyers Fund for Client Protection, said it’s theft when lawyers take client escrow funds for personal use, and it should be standard practice statewide for disciplinary committees to handle those cases. Punishment now can vary, ranging from a private letter of caution to censure, suspension or disbarment.(1)

    “Our trustees recommend that there should be a uniform disciplinary policy that a disciplinary committee will make a prompt referral to the local district attorney when that committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability,” O’Sullivan said. “This policy should help protect law clients and promote public confidence in our justice system.”

    Addressing the Commission on Statewide Attorney Discipline, he said the fund’s trustees have granted 8,032 awards for more than $181 million since 1982.

    The fund pays about $6 million involving about 30 lawyers annually, O’Sullivan said. There are 297,000 lawyers registered in New York.

    Attorney Peter Johnson, who presided at Tuesday’s hearing, said the commission appointed by Chief Judge Jonathan Lippman in February is reviewing current practices, including whether to recommend earlier public disclosure of disciplinary cases and consistent handling of attorney misdeeds in New York’s four judicial departments and their disciplinary committees. Other hearings are planned in Buffalo and Manhattan.

    O’Sullivan also recommended requiring lawyers in the two upstate judicial districts to adopt the downstate districts’ requirement that lawyers state at their bi-annual registrations that they have read and are in compliance with the rules for safeguarding client funds and property. The fund also advocates random audits of attorney escrow accounts.

    Johnson said it was unsettling to hear it’s not standard in New York to disbar lawyers who steal. He also questioned whether the confidentiality of the complaint process has kept lawyers from being prosecuted.

    “Our experience is that on occasion when committees have evidence of theft by lawyer injuring a client there are not referrals being made by the disciplinary committees or grievance committees to the district attorney’s office,” O’Sullivan replied. “There’s not an open line of communication in appropriate circumstances.”

    The disciplinary committees receive about 11,000 to 12,000 complaints a year, with about 90 percent unfounded, said John Caher of the commission staff.

    Benjamin Cunningham, a Bronx resident, said he filed a disciplinary complaint in the First Department against the lawyer he paid $7,000 to appeal his civil case against federal marshals over a search of his home that left him injured. The lawyer never filed a brief, his appeal was rejected, and the lawyer then billed him for $60,000, which he didn’t pay. His complaint was rejected, he said.

    David Miranda, president of the New York State Bar Association, said lawyers should have more access to complaint information to ensure their due process rights, noting many other states do that. He said unsubstantiated complaints can damage careers.
Source: N.Y. fund for cheated clients wants thieving lawyers disbarred.

See also, Thieving Lawyers Draining Client Security Funds, a December, 1991 New York Times story that gives some-real life examples of how client security funds deal with claims and the pressures the administrators of those funds may feel when left insufficiently financed as a result of the misconduct of a handful of lawyer/scoundrels.
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(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

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