Payout By Pennsylvania's Attorney Ripoff Reimbursement Fund Could Top $4 Million To 47 Mostly-Elderly Victims Of Now-Dead Lawyer In $11+ Million Ripoff; One Rapidly-Aging Ex-Client: "We Would Like To Enjoy Some Of The Money Before All Of Us Croak!"
- After more than three years of waiting for word on whether they will ever see any of the more than $11 million dead Hummelstown lawyer Jeffrey Mottern(1) stole from them, victims of his investment scam finally received a bit of good news.
The Pennsylvania Lawyers Fund for Client Security board notified 47 victims within the past couple of weeks that their claims have been approved for reimbursement, said the fund's executive director Kathryn Peifer Morgan.
"Now we're waiting to see what the dollar amount is going to be," she said.
Peifer Morgan was unable to put a timeline on how soon those determinations will be made. She indicated whatever they are, they must receive the lawyers fund board and state Supreme Court's approval before payments go out.
Two of victims' claims were determined by the lawyers fund board not to be compensable for reasons she couldn't disclose.
***A lawsuit is pending in Dauphin County Court against Ameriprise and two local banks, Fulton Bank and Riverview Bank, to try to recoup some of the losses victims incurred in his so-called Ponzi scheme.
Mottern had a financial relationship with those institutions that are alleged in court documents to have played a part in his scam. All three institutions deny any wrongdoing on their part. A trial date for the case is tentatively scheduled for May 2018.
The claims made to the lawyers fund are a separate avenue Mottern's victims are pursuing to recover some of their lost savings. Money for that fund, established in 1982, comes from a portion of the annual fee paid by the approximately 65,000 lawyers who practice law in Pennsylvania.(2)
***The fund limits the maximum payout to each victim to $100,000 and places a $1 million aggregate cap on all claims made against a lawyer. However, there is a provision that allows the lawyers fund board to ask the state Supreme Court to waive the $1 million cap. Peifer Morgan said the board agreed to make such a request for the Mottern victims.
She estimates the total payout from the fund could top $4 million for those victims.
One of them, Paul Stokes of Middletown, said the notice he received from the lawyers fund offered him some hope that he might get some of the $700,000 he and his late wife Judith lost in Mottern's deception.
Still, he added, "I talked to other people and the main concern any of us have is, is it going to take another two or three years for the board to make their minds up" on how much to award to each of the victims.
Other victims, Kay and Robert Shaffner, who have since moved to Florida, also look forward to getting some of their money back. Robert Shaffner, a retired insurance agent who is now 75, had to get a job at Lowe's and is working 38 hours a week to help pay the bills after losing $413,000 in Mottern's rip-off, his wife said.
Time is of the essence in resolving this case. Most of the victims are in the 70s and older. Two have died since Mottern's scam was discovered.
Stokes said, "We would like to enjoy some of the money before all of us croak."
(2) For similar "attorney ripoff reimbursement funds" that sometimes help cover the financial mess created by the dishonest conduct of lawyers licensed in other states and Canada, see:
- Directory Of Lawyers' Funds For Client Protection (February 2017) (includes Canadian recovery funds, courtesy of the American Bar Association);
- Check the USA Client Protection Funds Map;
- Check the Canada Client Protection Funds Map.