Sunday, June 05, 2016

Nine Months After Getting Bar Boot, NJ Lawyer Finally Gets Pinched For Allegedly Fleecing Clients Out Of Over $1.5 Million; Among Victims: Dead People's Estates, Young Boy Entitled To $400K From Wrongful Death Suit Involving His Late Father's Demise

From the Office of the New Jersey Attorney General:
  • Acting Attorney General Robert Lougy announced that a lawyer who practiced in Jersey City has been indicted by a state grand jury on charges that he stole more than $1.5 million from five clients over a period of more than 10 years. The indictment supersedes a November 2015 indictment that charged him with stealing from one of the clients.

    The Division of Criminal Justice Financial & Computer Crimes Bureau filed an indictment [] charging Joseph J. Talafous Jr., 53, of Toms River, with money laundering (1st degree), three counts of theft by unlawful taking (2nd degree), four counts of theft by failure to make required disposition of property (2nd degree), five counts of misapplication of entrusted property (2nd degree), two counts of theft by deception (2nd degree), and four counts of filing fraudulent state income tax returns (3rd degree).

    From October 2004 through May 2015, Talafous allegedly stole approximately $1,528,022 from the following clients. He allegedly laundered most of the funds through his attorney trust account and/or attorney business account.
  • Talafous allegedly used a power of attorney to make unauthorized withdrawals totaling approximately $78,202 from the investment account of an elderly client who lived in Jersey City and from the client’s estate after the client died in 2010.
  • Talafous allegedly stole approximately $402,418 from a trust set up for the benefit of a young boy in 2005 with funds from a wrongful death suit stemming from the death of his father. The father died in 2001 in a workplace accident when the child, a West New York resident, was still an infant.
  • Talafous allegedly stole approximately $316,275 from the estate of an elderly Jersey City woman who died in 2009 without any immediate family. She had hired him to prepare her will and had named him executor of her estate.
  • Talafous allegedly stole approximately $406,076 from the estate of a Jersey City man who died in 2012 and whose family hired Talafous as attorney for the estate, which included several life insurance policies worth a total of more than $870,000.
  • From 2012 to 2015, Talafous allegedly stole $325,051 that was entrusted to him as counsel for the estate of a Jersey City woman who owned property in New Jersey and New York.
  • The case was referred to the Division of Criminal Justice by the New Jersey Office of Attorney Ethics. The Supreme Court of New Jersey revoked Talafous’ license to practice law in August 2015.

    “We charge that Talafous crookedly stole from his clients again and again, even stooping so low as to steal funds placed in trust to care for a young boy who lost his father,” said Acting Attorney General Lougy. “Attorneys have a duty to uphold the law and faithfully serve their clients, but we allege that Talafous instead broke the law to serve himself.”

    “Lawyers are positioned to do tremendous harm if they betray the trust placed in them, and we allege that the harm suffered by Talafous’ clients and their beneficiaries exceeded $1.5 million,” said Director Elie Honig of the Division of Criminal Justice. “Through prosecutions such as this one, we’re sending a strong message that we will not tolerate lawyers who abuse their licenses.”

    Talafous is charged with failing to report the monies he allegedly misappropriated from his clients in state income tax returns that he filed for the tax years 2011, 2012, 2013 and 2014.
Source: Jersey City Lawyer Indicted For Allegedly Stealing More Than $1.5 Million From Clients.

For the indictment, see State of New Jersey v. Talafous.

See, generally, Frederick Miller, "If You Can't Trust Your Lawyer .... ?", 138 Univ. of Pennsylvania Law Rev. 785 (1990) for more on the apparent, long-standing tolerance for deceit by many in the legal profession:
  • This tolerance to deception is encouraged by the profession's institutional civility. Seldom is a fig called a fig, or a shyster a shyster. No, our euphemisms are wonderfully polite: "frivolous conduct," or a "lack of candor;" or "law-office failure;" or, heaven forbid, a "peculation," a "defalcation," or a "negative balance" in a law firms's trust account.

    There is also widespread reluctance on the part of lawyers --- again, some lawyers --- to discuss publicly, much less acknowledge, that they have colleagues who engage in deceit and unprofessional conduct.

    This reluctance is magnified when the brand of deceit involves the theft of client money and property, notwithstanding that most lawyers would agree that stealing from clients is the ultimate ethical transgression.[...] The fact is, however, that theft of client property is not an insignificant or isolated problem within the legal profession. Indeed, it is a hounding phenomenon nationwide, and probably the principal reason why most lawyers nationwide are disbarred from the practice of law.
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(1) The New Jersey Lawyers' Fund for Client Protection was established to reimburse clients who have suffered a loss due to dishonest conduct of a member of the New Jersey Bar.

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.

See generally:
  • N.Y. fund for cheated clients wants thieving lawyers disbarred, a July, 2015 Associated Press story on this Fund reporting that the Fund's executive director, among other things, is calling for prompt referral to the local district attorney when the disciplinary committee has uncontested evidence of theft by a lawyer injuring a client or an admission of culpability;

    When Lawyers Steal the Escrow, a June, 2005 New York Times story describing some cases of client reimbursements ("With real estate business surging and down-payment amounts rising with home prices, the temptation for a lawyer to filch money from a bulging escrow account and later repay it with other clients' money has never been greater, said lawyers who monitor the thefts."),

    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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