Saturday, December 31, 2016

Pennsylvania's Crooked Lawyers' Ripoff Reimbursement Fund To Review 50 Client Claims Totaling Nearly $15 Million In Connection With Embezzlement By Suicide-Committing Attorney; Panel To Consider Requesting Waiver Of $1 Million Per Attorney Aggregate Payout Cap

In Hummelstown, Pennsylvania, PennLive reports:
  • It is beginning to look like the victims of dead Hummelstown lawyer Jeffrey Mottern will see a third year come and go without recovering their losses from his Ponzi scheme that ripped them off of more than $11 million.

    Lawyers for the victims continue to fight to recover at least some of the money they lost in the investment and trust fund scam that began unraveling shortly before Mottern committed suicide in his Main Street law office on March 17, 2014.
    [Among the] avenue[s] that the victims are hoping will lead to recovery of some of their money is the Pennsylvania Lawyers Fund for Client Security, a fund that exists to provide financial relief to individuals who file claims alleging a financial loss as a result of actions by a Pennsylvania licensed lawyer. It is funded through $45 of the $200 lawyers pay annually to keep their law license active in Pennsylvania.(1)

    Executive director Kathryn Peifer Morgan said the fund's board is scheduled to review the 50 claims totaling nearly $15 million from Mottern's victims at its March 2017 meeting. At that meeting, the board will make a determination of the compensable loss of each victim.

    She said some of the victims are seeking reimbursement of the fictitious interest that Mottern claimed their original investment had earned, but the fund is not permitted to cover that part of a loss. Once the board determines the fund's total exposure from all the claims, which is likely will exceed $1 million aggregate cap on claims against a single lawyer, she said it will then ask the state Supreme Court for a waiver to the $1 million cap.

    The fund has a cap of $100,000 as the maximum claim it would pay to individual victims despite the fact that some of Mottern's victims are hundreds of thousands of dollars, even more than $1 million in a couple of cases. In a previous interview, Peifer Morgan estimated that combined, the fund's maximum payout to Mottern victims would likely be a little over $4 million.
For the story, see Victims still waiting for payback from dead lawyer.
(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.