Sunday, November 15, 2015

NJ Attorney Ripoff Reimbursement Fund Recently Coughs Up Nearly $3.25 Million For 3rd Quarter 2015 To Cover Clients' Losses Resulting From Conduct By 15 Sticky-Fingered Attorneys

The New Jersey Lawyers' Fund For Client Protection recently announced:
  • During the third quarter of 2015, the New Jersey Lawyers’ Fund for Client Protection, funded by the state’s lawyers and judges, paid $3,233,028.58 to clients for losses caused by 15 lawyers, the board of trustees announced [].

    The purpose of the fund is to pay on behalf of the honest majority of lawyers for the wrongdoing of the few who are suspended or disbarred for misappropriation.(1) In its 46-year history, the fund has paid claims against a total of 759 attorneys. There are 95,687 lawyers licensed in New Jersey.

    The fund operates under the authority of the Supreme Court pursuant to Court Rule 1:28. The court appoints the seven trustees, five attorneys and two public members, who serve staggered 5-year terms without compensation. The trustees consider clients’ claims and make awards when it is determined that the loss was caused by dishonest lawyer conduct, under fund rules.(2)

    Cases involving legal malpractices and negligence are handled through civil court actions, and fee disputes are handled through the district fee arbitration committees established by the Supreme Court.

    For a claim to be paid, the attorney against whom it is filed must have been a member of the bar, acting as either attorney or fiduciary, at the time of the incident; and unless deceased, must have been disbarred or suspended from the bar, or convicted of embezzlement or other misappropriation of property.

    A claimant can receive up to $400,000 if their claim is approved, and the fund can pay up to $1.5 million in claims against any one lawyer. Special permission can be granted by the Supreme Court to exceed the aggregate limit.

    To receive a claim form, write to the New Jersey Lawyers’ Fund for Client Protection, Richard J. Hughes Justice Complex, P.O. Box 961, Trenton, NJ 08625-0961, or call 855-533-FUND (3863). The form must be completed, signed and returned with copies of any proofs of the transaction. There is no filing fee. Claimants assisted in their claims by practicing attorneys receive their representation free of charge. Fund Director Daniel R. Hendi welcomes inquiries about the fund’s purpose and operation.
Source: Lawyers’ Fund for Client Protection Releases Third Quarter Report.

Attached is an itemized list of the third quarter claim awards and status of each attorney for whom reimbursement payouts to victimized clients were made under the Supreme Court discipline system, along with the specific basis for each of the allowed claims (ie. Dishonest Retention of Unearned Retainer Fees, Misappropriation of Escrow Money, Misappropriation of Lawsuit Settlement Monies, among other things).

The two major attorney-scoundrels on the 3rd quarter 2015 list are Michael W. Kwasnik ($2,690,727.31 this quarter's payout; $8,308,920.16 cumulative payout), and Louis A. Capazzi, Jr. ($279,041.00 this quarter's payout; $967,800.55 cumulative payout).

(1) For similar "attorney ripoff reimbursement funds" that attempt to clean up the financial mess created by the dishonest conduct of miscreant lawyers licensed in other states and Canada, see:
Maps available courtesy of The National Client Protection Organization, Inc.

(2) There is a one year deadline from the time of the issuance of discipline for the screwed-over clients to file their claims against New Jersey lawyers. See Lawyers’ Fund for Client Protection Announces Deadlines for Claims:
  • [T]he issuance of the Supreme Court’s determination to suspend or disbar an attorney activates the fund’s jurisdiction to receive claims against that attorney. There is a one-year deadline after the discipline is issued to the attorney for clients to file claims. The client’s claim does not need to be included in the ethics determination to be compensable. Discipline of the attorney does not guarantee compensability for any specific claim. Attorneys can be disciplined for conduct other than misappropriation.

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