2002 · 2005. 1. 7. · the lawyers’ fund for client protection of the state of new york 119...

The Lawyers’ Fund for Client Protection of the State of New York119 Washington Avenue • Albany, New York 12210

Telephone: (518) 434-1935 • (800) 442-3863E-mail: [email protected] site: www.nylawfund.org

B O A R D O F T R U S T E E S

ELEANOR BREITEL ALTER, CHAIRMAN

BERNARD F. ASHE

NANCY BURNER

CHARLOTTE G. HOLSTEIN

CHARLES J. HYNES

THERESA B. MAZZULLO

ERIC A. SEIFF

Submitted to the Judges of the Court of Appeals and theState Comptroller pursuant to the provisions of GeneralOrder of the Court of Appeals dated November 16, 1981.

20 02 CELE

BRAT

ING

TWENTY YEARS

OFSERVICE

of the State of New YorkFor Client Protection

LAWYERS’ FUND1982

2002

ANNUAL REPORT OF THE BOARD OF TRUSTEES

lawy0063_02annualreport 3.25.2003 3:51 PM

2

Contents

Foreword ......................................................................................................................................................3

A Message from the Board of Trustees...................4

Special Dedication toNew York’s Legal Profession.............................................4

Special Recognition .....................................................5

History of Law Client Protectionin New York State..............................................................................................6

The Purpose of the Lawyers’ Fund.......................................6

The Fund’s Statutory Authorityand Trustees’ Regulations...................................................................6

The Board of Trustees................................................................................7

The Staff of the Lawyers’ Fund...................................................8

Liaison with the Appellate Divisions................................8

Revenue of the Lawyers’ Fund...................................................8

Registration of Lawyers.........................................................................8

Sanction Revenues........................................................................................9

Payouts and Disbursements..........................................................9

Restitution Revenues..................................................................................9

Representation by the Attorney General.................10

Judicial Precedents...................................................................................10

Restitution as a Disciplinary Sanction....................10

Public Information andConsumer Education........................................................................10

www.nylawfund.org...................................................................................11

Processing of Applicationsfor Reimbursement.....................................................................................11

Representation by Counsel..........................................................12

Judicial Review of Rejected Claims...............................12

Unearned Legal Fees..............................................................................13

Theft of Personal Injury Settlements............................13

Losses in Investment Transactions.................................14

Thefts in Real Property Transactions............................14

Dead Lawyers and Missing Clients...............................15

The Dishonored Check Reporting Rule...................15

Claims Received and Processed.........................................16

Claims Filed and Alleged Losses,1982 to 2002 ........................................................................................................16

Filings by Category of Client Loss,1982 to 2002 ........................................................................................................16

Lawyers Involved in Awards,1982 to 2002 ........................................................................................................16

Claims Filed in 2002..........................................................................17

Awards of Reimbursement1982 to 2002..........................................................................................................17

Awards of Reimbursement in 2002 ................17

Ineligible Claims, 1982 to 2002..............................17

Claims PendingDecember 31, 2002................................................................................17

Recommendations......................................................................................18

Alcohol and Substance Abusein the Legal Profession ................................................................18

Bar Examinations ........................................................................................18

Disbarment for Conversion................................................18

Confidentiality in LawyerDiscipline Proceedings ................................................................18

Bank Notices to Fiduciaries ..............................................18

Thefts by Suspended, Disbarred and Bogus Lawyers.............................18

Escrow Thefts in Real Property Transactions........................................19

Interest on Down-PaymentsHeld in Escrow................................................................................19

Escrow Accounts of Suspendedand Disbarred Lawyers......................................................19

Interim Suspensions and Restraining Escrow Funds..........................................19

Multijurisdictional Practice and Pro Hac Vice Rules.................................................................19

Afterword .................................................................................................................20

Appendix.....................................................................................................................21

Statistical Tables..........................................................................21

NY State Finance Law, Section 97-t ..........23

NY Judiciary Law, Section 468-b..................23

Case Law Involving the Lawyers’ Fund....................................................................23

Article 78 Proceedings....................................................24

Trustees’ Regulations..........................................................24

Lawyers’ Fund Publications....................................26

Lawyers Involved in AwardsSince 1982............................................................................................27

Application for Reimbursement.........................34


3

Foreword


4

SpecialDedication toNew York’s Legal Profession

In recognition of the 20th anniversaryof the Lawyers’ Fund, the Trusteeswish to dedicate this annual report to

New York’s legal profession for itsfinancial, moral and practical support tothe Fund since 1982.

The Fund exists because of goodlawyers, not bad ones. The financialsupport of lawyers in New York Stateenable the Fund to reimburse victims ofthe very few members of the bar whocause client losses. It is vital to notethat the former lawyers who are respon-sible for the Fund’s awards over 20years represent less then one-half ofone percent of the 197,000 registeredlawyers in New York State.

New York’s bench and bar are directlyresponsible for the Fund’s success andaccomplishments. In the investigationand processing of claims and efforts toprotect law clients and improve oursystem of justice, the lawyers of NewYork have generously contributed theirtime, talents and support to theLawyers’ Fund.

Each year, the Trustees continue to wit-ness the generous sense of public serv-ice displayed by members of New York’slegal profession who assist law clientsprocess claims with the Fund withoutcompensation. Nearly half of allclaimants have attorneys assist them asa public service. On the following pageis a listing of the attorneys who donatedtheir services to claimants in 2002.

“ I am so very grateful for your fund, those who oversee it, and the

lawyers who contribute. I cannot thank you enough for your service

to others, and particularly, to me. You have caused me to feel such

satisfaction and gratitude that words seem inadequate. Thank you!”

— Message from claimant, 2002

Twenty years ago, the newly establishedClients’ Security Fund took its first,small steps to maintain the integrity of

the legal profession and promote publicconfidence in our justice system byreimbursing client losses caused by lawyerdishonesty. In this 20th Annual Report, wenow proudly reflect on two decades ofservice to legal consumers, New York’s legalprofession and our State’s court system.

Since 1982, the Trustees have rendereddeterminations in over 11,100 claimsalleging dishonest conduct in the practiceof law. The Trustees have reimbursed$97.3 million to 5,428 law clients whosefaith in the justice system was restoredbecause of the legal profession’s debt ofhonor to those victims.

With insight gained from experience, theTrustees recommended several client pro-tection measures which were instituted tothe benefit of law clients and our judicialsystem. These measures include the adop-tion of uniform court rules for the preser-vation of client funds; court rules requiringlawyers to certify compliance with thesestandards from the Lawyer’s Code ofProfessional Responsibility; interim sus-pension rules for lawyers deemed to be apublic threat; legislation making theOfficial Register of Attorneys a publicrecord; and the institution of mandatory feearbitration in New York State.

While reimbursing losses, the Trustees suc-ceeded in having effective loss detection and

prevention measures put in place such as theInsurance Department payee notification ruleand the Dishonored Check Reporting Rule. TheTrustees also produced and promoted educa-tional materials for legal consumers and mem-bers of the bar.

To replenish the Fund’s assets, the Trusteeshave vigorously pursued restitution from dis-honest attorneys and liable collateral sources.These efforts have led to the enactment ofstatutes authorizing the Appellate Divisions toorder restitution as a disciplinary sanction;representation by the Attorney General in theFund’s restitution litigation and court deci-sions clarifying and strengthening the Fund’screditor rights.

Despite these achievements, law client lossespersist. The Trustees’ initial optimism in 1982that the problem of lawyer dishonesty wouldbe quickly dispatched has given way to theTrustees’ continuing commitment to addressthe transgressions of the very few “badapples” responsible for the harm suffered bylaw clients.

Chief Judge Kaye’s foreword aptly character-izes our twenty-year experience which hasclearly demonstrated that the overwhelmingmajority of lawyers in New York State arehonest and caring for their clients. We remainindebted to these members of the bar, toJudge Kaye and other members of the Courtof Appeals, and to all those in governmentservice for their unfailing support of theFund’s efforts to protect law clients and theintegrity of New York’s legal profession.

A Message From the Board of Trustees


5

BRONX COUNTY

Gail Ricketts, Esq.

BROOME COUNTY

John L. Perticone, Esq.Levene Goulding & Thompson

ERIE COUNTY

Stanley J. Collesano, Esq.John F. Collins, Esq.Collins & CollinsWilliam J. Cotter, Esq.Cotter & Cotter

KINGS COUNTY

Peter V. Christiansen, Esq.Aldo G. Frustaci, Esq.

ONONDAGA COUNTY

John R. McDermott, Jr., Esq.

MONROE COUNTY

John J. Ferlicca, Esq.Timothy J. Schofield, Esq.Philippone Law Offices

NASSAU COUNTY

Michael J. Fleming, Esq.Robert Nelson, Esq.Alan Ross, Esq.Roy Seland, Esq.Mincone & Mincone, P.C.

NEW YORK COUNTY

John A. Aretakis, Esq.Candace Carponter, Esq.Evan Eisland, Esq.Robert A. Karin, Esq.Davis & GilbertJonathan Lerner, Esq.Abraham & LernerJohn T. McNamara, Esq.Geringer & DolanRichard E. Miller, Esq.Kurzman Karelsen & FrankJohn L. Moncrief, Esq.

QUEENS COUNTY

Norman L. Horowitz, Esq.Horowitz & FaethPankaj Malik, Esq.Malik & AssociatesRavi B. Persaud, Esq.Efrain Ramos, Esq.John A. Servider, Esq.Yvette M. Villalba, Esq.

RICHMOND COUNTY

Michael J. Pocchia, Esq.

THE BOARD OF TRUSTEES OF THE LAWYERS’ FUND PROUDLY RECOGNIZES THE GENEROUS ACT OF PUBLIC SERVICE DISPLAYEDBY THE ATTORNEYS LISTED BELOW WHO HAVE ASSISTED CLAIMANTS IN RECEIVING AWARDS OF REIMBURSEMENT IN 2002:

SUFFOLK COUNTY

John C. Bennett, Esq.Gathman & BennettThomas J. DeMayo, Esq.Alan L. Finkel, Esq.Melissa D. Heilig, Esq.Bennett & ReadJean Marie Gunderson, Esq.Smith Finkelstein & LundbergThomas B. Licari, Esq.Robin Long, Esq.James O’Shea, Esq.Robert B. Pollina, Esq.Stephen G. Siben, Esq.Barry Tuminello, Esq.

WESTCHESTER COUNTY

Paul S. Shemin, Esq.

NEW JERSEY

Philip M. Colicchio, Esq.Taylor & ColicchioKevin P. Kelly, Esq.Kelly Kelly & MarottaMerrill M. O’Brien, Esq.Dollinger & DollingerJoel J. Steiger, Esq.

PENNSYLVANIA

Robert H. Montgomery, III, EsqWilliam Alan Shaw, Esq.Landy & Landy

Special Recognition

“ I congratulate those who set

up this fund and the many

honest lawyers who have

kept the fund available”


“ I am grateful to the honest

and caring lawyers who

made my award

possible....”


“ I wish to thank the Trustees

and staff of the Lawyers’

Fund and particularly the

lawyers of New York State

who made this award

possible. My faith in the

legal profession has been

restored.”



6

The Purpose of the Lawyers’ FundThe History of Law ClientProtection in NY State S

ection 468-b of the State Judiciary Law andthe Regulations adopted by the Fund’sTrustees clearly state the purpose of the

Lawyers’ Fund. The Fund’s mission is tomaintain the integrity and protect the goodname of the legal profession, protect law clientsfrom dishonest conduct in the practice of law,and promote public confidence in theadministration of justice in New York State.

The Trustees’ primary focus is the reimburse-ment of losses caused by the dishonest con-duct of attorneys who were admitted to thepractice of law in New York State. Other activi-ties pursued by the Fund which are of equalimportance include the publication of con-

sumer educational materials to help clientsavoid situations that can result in losses; pro-grams to assist lawyers in complying with theirfiduciary and escrow obligations; and the rec-ommendation of court rules to prevent clientlosses from occurring.

Examples of losses reimbursed by the Fundinclude the theft of estate and trust assets,escrow deposits in real property transactions,settlements in personal injury litigation, debtcollection receipts, money embezzled in invest-ment transactions within an attorney-clientrelationship and the practice of law, andunearned fees paid in advance to lawyers whofalsely promise their legal services.

In 1929, the concept of law clientprotection was founded in NewZealand. In the United States, there

are now 50 special funds financed bythe legal profession and dedicated toprotecting law clients from dishonestconduct by a member of that state’sbar. The District of Columbia and everystate with the exception of New Mexicohave active client protection funds.

In the 1960’s, bar associations in NewYork State began programs of reim-bursement for law clients. The NewYork State Bar and bar associations inNew York and Suffolk Counties led theway in this field in the Empire State.These associations appealed to theCourt of Appeals when their effortswere unable to finance adequate clientreimbursement. The New York courtsystem then embraced the responsibil-ity for operating a statewide clientreimbursement program.

The Lawyers’ Fund in New York wasestablished by statute. It is an inde-pendent public trust administered by aBoard of Trustees appointed by theCourt of Appeals. The biennial attor-ney registration fee required of everypracticing attorney is the principalsource of revenue for the Fund.

The Lawyers’ Fund, known originallyas The Clients’ Security Fund, wasorganized on December 1, 1981 withthe Court of Appeals’ appointment of aseven-member Board of Trustees. TheTrustees then established regulationsand claim procedures and beganoperations on April 1, 1982.

The Fund’s Statutory Authorityand Trustees’ Regulations

The Lawyers’ Fund was created by Chapter 714 of the Laws of 1981, effective June 1, 1981. Thislegislation added section 97-t to the State Finance Law which provides for the establishment ofthe Fund and for its assets to be managed as a special revenue fund by the State Comptroller.

The administration of the Fund is governed by Section 468-b of the Judiciary Law. This statuterequires that the Board of Trustees establish regulations for the Fund’s administration and proce-dures for the presentation, consideration and payment of claims.

The Appendix includes section 97-t of the State Finance Law, section 468-b of the Judiciary Law, andthe Trustees’ Regulations. These Regulations are also published in Title 22 of the Official Compilationof Codes, Rules and Regulations of the State of New York (22 NYCRR Part 7200, et seq.).

0

100

200

300

400

500

600

700

800

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

5,428Total Awards

149

4

130 18

317

815

9 202

177 21

9

200

288 31

8 362 383

381

625

415

161 20

5

160 18

7Number of Awards Approved from 1982-2002

“ The biennial attorney

registration fee required of

every practicing attorney is

the principal source of

revenue for the Fund.”


7

Nancy Burner ofSetauket, Suffolk County,is a sole practitioner andelder law attorney. She isa graduate of the StateUniversity at StonyBrook and HofstraUniversity School of Law

(1988). Ms. Burner was appointed to a three-year term of office on December 10, 2002.

Charlotte G. Holstein of Syracuse is a civicleader, founder and Executive Director ofF.O.C.U.S. GreaterSyracuse, a communityinterest group. She is agraduate of BrockportState University (1946)and the 1998 recipient ofan honorary degree,Doctor of HumaneLetters, from LeMoyneCollege in Syracuse. Mrs. Holstein was appoint-ed to the Board on December 1, 2001. Her pres-ent term expires on November 30, 2004.

Charles JosephHynes of Brooklyn isthe District Attorney ofKings County. He is agraduate of St. John’sUniversity and itsSchool of Law (1961).Mr. Hynes was first

appointed to the Board of Trustees in 1982. Hispresent term expires on November 30, 2003.

Theresa B. Mazzullo of Rochester, MonroeCounty, is President and a Principal of EPICAdvisors, Incorporated, a retirement planadministration firm. Mrs.Mazzullo, the Fund’sTreasurer, is a graduateof Spring Hill Collegeand Stonier GraduateSchool of Banking(1994). She wasappointed to a three-yearterm of office as Trusteeon December 10, 2002.

Eric A. Seiff of theBronx is a partner inthe Manhattan lawfirm of Seiff, Kretz &Abercrombie. Mr.Seiff is a graduate ofYale University andthe Columbia

University Law School (1958). Mr. Seiff hasserved on the Board since 1981. His pres-ent term expires on November 30, 2003.

In 2002, two Trustees completed theirterms of service to the Lawyers’ Fund. TheFund’s former Vice-Chairman, Theodore D.Hoffmann of Hicksville, Nassau County,ended his twelve-year tenure as a Trustee.Mr. Hoffmann is Of Counsel to the GardenCity law firm of Albanese, Albanese andFiore. He is a graduate of St. John’sUniversity and its School of Law (1948).

Ray W. Manuszewski of Cheektowaga, ErieCounty, an original member of the Boardand the Fund’s Treasurer since 1981, alsocompleted his service as Trustee. Mr.Manuszewski is a graduate of CanisiusCollege (1951) and a former RegionalPresident of Manufacturers Hanover TrustCompany in Buffalo.

Other former members of the Board ofTrustees include the Hon. Judith S. Kaye,Chief Judge of the State of New York(1981-1983); Joseph Kelner, Esq. ofManhattan (1981-1982); Anthony R.Palermo, Esq. of Rochester (1981-1990),the Fund’s first Chairman who served inthat capacity from 1981 to 1985; John F.X. Mannion of Syracuse (1981-1992) andShirley B. Waters of Rome (1992 to 2001).

The Board of Trustees

Section 468-b of the Judiciary Lawprovides that the Fund is administeredby a Board of Trustees who are

appointed by the Court of Appeals.

The Trustees serve renewable three-yearterms. They receive no compensation fortheir services. The original Trustees con-sisted of five members of the bar and twobusiness and community leaders. They tooktheir oath of office on December 1, 1981.Since the Fund’s inception, this composi-tion of the Board has been maintained bythe Court of Appeals.

The Trustees elect from their membership aChairman, Vice-Chairman and a Treasurer toserve as the Fund’s officers. The Fund’sExecutive Director serves as the Fund’s ChiefAdministrative Officer and the Board’sSecretary and Counsel.

Eleanor Breitel Alterof Manhattan hasserved as Chairman ofthe Board of Trusteessince 1985. She is apartner in theManhattan law firm ofKasowitz, Benson,Torres & Friedman. Mrs. Alter is a graduateof the University of Michigan and theColumbia University Law School (1964). Shewas first appointed to the Board of Trusteesin 1983. The Chairman’s current term expireson November 30, 2004.

Bernard F. Ashe ofDelmar, Albany County,is Vice-Chairman of theBoard. Mr. Ashe is aformer GeneralCounsel to New YorkState United Teachers.He is a graduate of

Howard University and the Howard UniversitySchool of Law (1961). Mr. Ashe is a chartermember of the Board. His current termexpires on November 19, 2005.

“ Thank You! You have helped

to restore my faith in New

York’s attorneys.”



8

The Board of Trustees appointsthe Fund’s staff. In 2002, thestaff consisted of Timothy J.

O’Sullivan, Executive Director andCounsel; Michael J. Knight, DeputyCounsel; Ray Wood, Investigator;Sue Gartley, AdministrativeSecretary; and Jahnel Hall-Worthen, Secretary.

The Fund owes a debt of gratitude to its original Executive Director and Counsel, FrederickMiller, who served from the Fund’s inception in 1981 until his retirement in July 2000.

Registrationof Lawyers

Revenue of the Lawyers’ Fund

Timothy J. O’Sullivan Michael J. Knight Ray Wood

The Staff of the Lawyers’ Fund

The biennial attorney registration feerequired of active members of the NewYork bar by section 468-a of the Judiciary

Law is the principal source of revenue for theLawyers’ Fund. The Lawyers’ Fund does not, asmany believe, receive any financing from theInterest on Lawyer Account (IOLA) program.

Section 468-a of the Judiciary Law allots 20percent ($60) of each $300 registration fee tothe Lawyers’ Fund. The Office of CourtAdministration administers the attorney regis-tration program. Since April 1, 1993, theLegislature has annually supplemented this$60 portion with additional revenues from thebiennial registration fee. The combined rev-enues are equivalent to a $100 share of eachbiennial registration fee.

A special revenue account in the State Treasurycreated by section 97-t of the State Finance

Sue Gartley Jahnel Hall-Worthen

Liaison with theAppellateDivisions

The four Appellate Divisions of theSupreme Court have designated anAssociate Justice to serve as liaisons

with the Fund. In 2002, the LiaisonJustices were Justices Milton L. Williamsof the First Department; David S. Ritter ofthe Second Department; Anthony J.Carpinello of the Third Department; andHenry J. Scudder of the FourthDepartment.

Disciplinary proceedings before theAppellate Divisions must be completedbefore the Trustees render final determi-nations in claims. Investigations by theFund’s staff are therefore coordinated withthe investigative efforts of the AttorneyGrievance Committees in the four judicialdepartments. This cooperation minimizesexpenses and prevents duplication ofinvestigative effort.

Section 7200.15 of the Trustees’Regulations provides that all shared infor-mation involving complaints againstlawyers is to be sealed and maintained asa confidential record in accordance withsection 90 of the Judiciary Law.

Law is the depository for the Fund’s assets. Thesole purpose of this special revenue account isto finance the Fund and its operations. Allawards of reimbursement and the Fund’sadministrative costs are paid from this specialrevenue account. No tax dollars are spent onthe Lawyers’ Fund.

The Fund’s other sources of revenue includeinterest from investments in the StateComptroller’s Short-Term Investment Pool(STIP), gifts, sanctions, and restitution recoveredfrom dishonest lawyers and other liable parties.

Since 1982, the Fund has received $96 millionfrom attorney registration fees; $4.2 million ininterest income; $2.0 million in judicial sanc-tion revenue; $7.4 million in restitution collect-ed from dishonest attorneys and collateralsources and $229,000 in contributions fromlawyers and the public.

In 1981, section 468 of the Judiciary Lawwas enacted establishing an official registerof attorneys for all lawyers licensed to

practice law in the State of New York.Judiciary Law Section 468-a was also addedrequiring that every licensed lawyer in theState register biennially with the ChiefAdministrator of the Courts through the Officeof Court Administration, and pay a biennialregistration fee.

Judiciary Law section 468-a (5) states thatnon-compliance by an attorney with the regis-tration statute “shall constitute conduct prejudi-cial to the administration of justice and shall bereferred to the appropriate appellate division ofthe supreme court for disciplinary action.”

At the close of 2002, New York State had197,000 lawyers registered with the Office ofCourt Administration.

“ The Lawyers’ Fund does not, as many believe, receive any financing

from the Interest on Lawyer Account (IOLA) program.”


9

The total revenue received by theFund since 1982 is $109 million.As of December 31, 2002, a total of

$97.3 million in awards have beengranted by the Fund. The Fund’sadministration costs as a state agencyduring 2002 totaled $600,000. Since theFund began operations in 1982, 92cents out of every $1 in revenue receivedhas been directly applied towards thepayment of awards of reimbursement.The Fund ended 2002 with $5.4 millionin revenue in the state treasury.

The Fund’s revenues are annually appro-priated to the Board of Trustees by theState Legislature as one component of theJudiciary Budget. For the 2003-2004 fiscalyear which commences April 1, 2003, theTrustees have requested appropriations of$9 million for awards of reimbursement.

Payouts andDisbursements

The Rules of the Chief Judge and the ChiefAdministrator of the Courts also allow forthe Fund to be the depository for

sanctions imposed against lawyers forfrivolous conduct in civil actions andproceedings, and counsels’ unjustified failureto attend a scheduled court appearance in acriminal or family court proceeding. The rulesare published in 22 NYCRR Parts 37, 130-1and 130-2.

Sanctions may also be imposed by SupremeCourt trial justices in the management of courtand trial calendars. The authority for the impo-sition of such Judicial sanction orders can befound in sections 2004, 3126 and 5015 of theCivil Practice Law and Rules.

At the end of 2002, the Fund had received a totalof $2.0 million in sanction payments whichranged from $5 to $100,000. An average month-ly revenue of $18,500 is now received fromsanctions. One law firm is the subject of approx-imately 542 unpaid sanction orders directing thepayment of $2.1 million to the Fund.

The Trustees have a fiduciary responsibilityto pursue the recovery of restitution inorder to supplement the Fund’s finances.

The Fund has recovered a total of $7.4 millionin restitution since 1982. This revenue wascollected from dishonest lawyers, their estates,and from pursuing civil claims against collateralsources which were financially liable for theunderlying losses reimbursed by the Fund.

Twenty years of experience has demonstratedthat lawyers who steal from their clients aregenerally unable to reimburse their victims, orthe Lawyers’ Fund for its awards. Despite thisfact, the Fund attempts to recover restitutionwhen possible. In these efforts, the Fund’s staffrequests the entry of judicial orders pursuant tothe restitution provisions of the Penal, CriminalProcedure and Judiciary Laws. The Fund alsosecures confessions of judgment and pursuesdirect action against dishonest lawyers andother collateral sources.

Civil claims are pursued against banks andinsurance companies that have paid checksbearing the forged endorsements of lawclients. The Fund also pursues recovery undertitle insurance policies, the enforcement ofcreditor claims against the estates of deadlawyers, and the prosecution of creditorclaims in bankruptcy court.

Section 468-b of the Judiciary Law authorizesthe Fund to seek restitution in its own right, andby entering into agreements or subrogation andassignment agreements with claimants whohave received awards of reimbursement.

RestitutionRevenues

“ Since the Fund began operations in 1982, 92 cents out of every $1 in

revenue received has been directly applied towards the payment of awards

of reimbursement. ”

Sanction Revenues

The Fund’s Finances Since 1982

Sanctions:$2.0 million

Restitution:$7.4 million

Contributions: $.23 million

Registration Fees:$96.0 million

Interest Income: $4.2 million

Revenue Sources:

Approved Claims: $97.3 million

Administrative Costs:$9.2 million

Rejected Claims: $229.0 million

Claims andOperations:


10

2001, this informational brochure was pub-lished in bilingual format in English andSpanish and widely disseminated.

The Fund has been involved in publicity proj-ects which have included radio, television, andnewspaper interviews. Commercially producedpublic service announcements about the Fundhave been featured on television and in legaland law school publications.

To aid in the education of lawyers concerningthe Appellate Divisions’ banking and record-keeping rules, the Fund has produced APractical Guide to Attorney Trust Accountsand Recordkeeping, now in its third edition.

The Fund’s Trustees and staff address profes-sional and civic service organizations and par-ticipate in state and national disciplinary andclient protection conferences. The Fund’s staffare also active members of the National Client

Protection Organization, Inc., a membershipcorporation of individuals and funds whichserves as a educational resource for the clientprotection field.

The Fund’s activities are highlighted in articlesdistributed to bar associations for publication intheir journals and newsletters. Statewide pressreleases to the media also announce awards ofreimbursement and other news of the Fund.

Other educational publications by the Fundfor legal consumers and members of the barhave included Know Your Escrow Rights;Know Your Escrow Rights: The Lawyers’Edition; Attorney Trust Accounts: TheVideo; What’s A Power of Attorney?Answers for New Yorkers; Avoiding GriefWith A Lawyer — A Practical Guide; andan Appendix of CLE Materials. These publi-cations are discussed in the Appendix.

Responsible affirmative efforts in publicinformation promote public confidencein the integrity of the legal profession

and in the administration of justice in NewYork State. With this conviction, the Board ofTrustees has encouraged public informationabout the Lawyers’ Fund.

Since 1989, the Trustees have been fortunateto have expert assistance and creative coun-sel in the area of public relations from thePaige Marketing Communications Group,Inc., of Utica.

The Fund’s initial publicity effort was a simpleplain-English brochure describing the Fund, itsjurisdiction and procedures. That brochure, inrevised form, is distributed to bar associations,government and legislative offices likely toencounter complaints of lawyer dishonesty,lawyer discipline agencies and law schools. In

Public Informationand Consumer Education

Representation bythe Attorney General

The Fund’s restitution litigation hasestablished important judicialprecedents in the areas of con-

sumer protection, the enforcement ofthe Trustees’ creditor rights, and theUniform Commercial Code. TheAppendix includes a selected history ofcase law from the Fund’s litigation.

The Court of Appeals recognized the legalstanding and scope of the Lawyers’ Fundright to pursue restitution claims inClients’ Security Fund v. Grandeau, et al.,72 N.Y.2d 62 (1988). Grandeau sustainedthe Fund’s right, as subrogee of reim-bursed law clients, to pursue the law part-ner of a dishonest lawyer for negligencein supervising the management of the lawpartnership.

Following Grandeau, the Legislatureamended the Judiciary Law to enlarge theFund’s subrogation rights. (Chapter 624,Laws of 1988; Judiciary Law §468-b (9).The statute also creates a statutory lien infavor of the Fund that attaches to a dis-honest lawyer’s restitution obligations.

The New York State Attorney General’sOffice represents the Lawyers’ Fund inrestitution and other litigation in

collaboration with the Fund’s legal staff. Since1999, the Lawyers’ Fund has financed thepayroll expense of an Assistant AttorneyGeneral who is assigned full-time to the Fund’srestitution litigation. This arrangement iseconomical and beneficial to the Lawyers’ Fundand its staff. Previously, the Fund wasresponsible for a 22 percent collection fee oneach recovery pursuant to section 18 of theState Finance Law.

Assistant Attorney General Richard L. Rodgersserved as the Fund’s litigation counsel in 2002.The Trustees are grateful to Assistant AttorneyGeneral Rodgers for his excellent representa-tion of the Fund in our restitution efforts.

Other members of the Department of Law whoassisted the Fund in litigation in 2002 includeAssistant Attorney Generals Nancy H. Lord,Stephen M. Nagle and Carolyn Cairns Olsonalong with Assistant Solicitor Generals DavidLawrence, III, Robert M. Goldfarb, Marcus J.Mastracco, and Evelyn Tenenbaum. TheTrustees owe a debt of gratitude to these dedi-cated individuals for their professionalism andadvocacy skills .

Restitution as aDisciplinary Sanction

The State Legislature amended section 90 ofthe Judiciary Law in 1989 and authorizedthe Appellate Divisions of the Supreme

Court to order a lawyer to pay restitution for themisappropriation or wilful misapplication ofclient property.

Subdivision (6-a) of section 90 permits anAppellate Division to order restitution in resig-nation as well as contested disciplinary pro-ceedings. The statute also provides that restitu-tion orders are enforceable as civil moneyjudgments.

This statutory authority was first utilized by theAppellate Division, Third Department, in Matterof Cooper, 168 A.D.2d 695 (3d Dep’t, 1990).Since Cooper, all of the Appellate Divisions haveexercised their statutory restitution authority.

Victims of dishonest lawyers and the Lawyers’Fund have benefitted from this restitutionstatute. It is also a flexible complement to anAppellate Division’s broad authority to regulatethe practice of law in the interest of protectingthe public.

In 1997, a disbarred attorney won $1 million inthe New York State Lottery. A judgment held bythe Fund as the result of a disciplinary order ofrestitution allowed the Fund to intercept the lot-tery winnings. The Fund had awarded $100,000to one of the disbarred lawyer’s client victims.With creditor rights from the section 90 restitu-tion judgment, the Lawyers’ Fund froze paymentof his lottery prize and recouped the $100,000award, plus interest and attorney fees.

JudicialPrecedents


11

In 1997, the Lawyers’ Fund established a web site on the internet which is an invaluable resourcefor public information and the bar. The site was financed by a bequest from the Last Will andTestament of John E. Kingston, a Justice of the Supreme Court in the Tenth Judicial District.

The Fund’s web site contains information about the Lawyers’ Fund, including frequently askedquestions about the Fund and its procedures; the Trustees’ Regulations; reimbursement claimforms; recent Annual Reports, consumer publications and press releases; addresses and telephonenumbers of Attorney Grievance Committees; and a roster of client protection funds nationwide.

www.nylawfund.org

0

200

400

600

800

1000

1200

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

415

161

534

375

230

332

341

311 35

1

486

438 51

562

7

636

598

909

730

1,128

812

442 49

2 548

499

11,334Total Claims Filed

Claims Filed 1982-2002

A lawyer accused of dishonest conduct is pro-vided with notice of a claimant’s allegations ifthe claim is not clearly ineligible. The Fund’sstaff provides the accused lawyer with a copyof the claim and supporting papers and affordsthe lawyer with the opportunity to respond tothe claimant’s allegations.

Quarterly meetings are held by the Trusteesin order to render determinations in claimsand address administrative issues. TheTrustees await the completion of disciplinaryproceedings involving the accused lawyerbefore reviewing a claim for reimbursement.In appropriate cases, the Trustees also awaitthe conclusion of criminal proceedingsagainst the accused attorney before renderingdeterminations.

Section 468-b of the Judiciary Law providesthe Trustees with sole discretion to determinethe merits of claims. This statute also authoriz-es the Trustees to fix the amount of an award of

reimbursement and the terms and condi-tions for awards.

The Trustees’ practice is to rotate quarterlymeetings among the four JudicialDepartments of the State. In 2002, theTrustees met in Albany, Brooklyn, Syracuseand Manhattan.

Claims are routinely processed based uponsupporting documents and evidence sup-plied by the claimants and gathered by theFund’s staff. Generally, an attorney involvedin dishonest conduct will not contest anaward. If the Trustees deem it to be neces-sary, hearings with the Board, or a panel ofTrustees, may be held.

Awards are paid by the State Comptrollerwhich manages the Fund’s assets. TheFund’s staff submits award vouchers whichare certified jointly by the Chairman,Treasurer and the Executive Director. Awardsare usually paid in lump sums.

Prospective applicants to the Fund aresupplied with an application packageconsisting of a two-page application form,

instructions on how to file a claim, the Fund’sinformational brochure describing the Fund’soperations, and a copy of the Trustees’procedural regulations.

When a claim is filed, it is assigned an identify-ing number, acknowledged, reviewed andinvestigated by a staff member. Claims arescreened to establish prima facie eligibility. If analleged loss does not appear to qualify for reim-bursement, the Executive Director will dismiss aclaim with a written explanation to the claimant.

Claimants who allege a misappropriation ofmoney or property in the practice of law arerequired to report their losses to the appropri-ate Attorney Grievance Committee and DistrictAttorney. Claimants must cooperate with theseagencies in their investigations.

Processing of Applications for Reimbursement

“ I appreciate your

organization and the work

you do to help ordinary

people of the State of New

York. Thank you for your

help, compassion and

understanding.”



12

Representation by Counsel

It is generally not necessary that a claimantwith the Fund have the assistance of alawyer. The Fund’s staff is available to assist

in the claims process which is straightforwardand uncomplicated and to help claimantswhenever possible in documenting theiralleged losses.

The Trustees do encourage claimants to seekguidance from lawyers. In many claims, theremay be practical and legal problems whicharise from the losses which require guidancefrom a member of the bar.

Lawyers in New York State continue to displaya generous sense of public service by assistingclaimants with the Fund. Nearly half of allclaimants have attorneys assist them with theirapplications, without legal fee.

The Appellate Divisions’ court rules do not per-mit lawyers to charge or accept legal fees forassisting claimants, except with the priorapproval of the Board of Trustees. (See, 22NYCRR 603.24, 691.24, 806.16, 1022.35). TheTrustees’ Regulations follow this statewide poli-cy. Section 7200.14 (b) of the Trustees’Regulations provides that attorneys shall not

charge or accept compensation for assisting aclaimant process a claim, without the priorwritten approval of the Trustees. This fee prohi-bition extends to contingent legal fee agree-ments with claimants. The Trustees require a“showing of extraordinary circumstances” forapproval of a fee application. Since 1982, onlyfour law firms have requested permission tocharge legal fees. Each fee application hasbeen denied.

Schettino v. Alter, 140 A.D.2d 600 (2d Dep’t1988) is an encouragement for the bar to par-ticipate in work of the Lawyers’ Fund. InSchettino, the Appellate Division, SecondDepartment, held that the Fund is a quasi-judicial agency, and that all participants in itsproceedings are absolutely immune fromdefamation liability. This immunity extends toclaimants and to lawyers who assist them inthe processing of their claims.

A certificate of appreciation is provided toattorneys who assist claimants in receiving anaward of reimbursement. This certificateexpresses the Trustees’ gratitude to lawyers fortheir generous act of public service.

In 20 years, the Fund has rendereddeterminations in 11,165 applicationsfor reimbursement. Awards of

reimbursement have been approved in5,428 claims. The remaining 5,737claims were determined to be ineligibleafter the claimants failed to providesatisfactory evidence of eligible losses.

Since 1982, only six out of 5,737claimants who were denied reimburse-ment have brought legal action againstthe Fund pursuant to Article 78 of theCivil Practice Law and Rules. All six ofthese judicial challenges were dismissedwhen courts held that there was a rationalbasis for the Trustees’ determinations thatthe claimants had failed to provide satis-factory evidence of eligible losses. A listof these cases is set forth in theAppendix.

Judicial Reviewof RejectedClaims

0

300

600

900

1200

1500

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

3469

5

235

256 34

227

9 321

346 40

5

560

540

702

610

749 82

01,

245

937

544

534

543

468

11,165Total Dispositions

Total Dispositions 1982-2002

“ Nearly half of all claimants have attorneys assist them with their

applications, without legal fee.”


13

Disciplinary Rule 2-110 of theLawyer’s Code of ProfessionalResponsibility states a lawyer’s

professional obligation to refundpromptly any part of a fee paid inadvance that has not been earned. (22NYCRR 1200.15 (a) (3)).

Over thirty-six percent of all claims tothe Fund in 20 years have sought reim-bursement of legal fees. Since 1982,4,100 of the 11,334 claims filed involvedlegal fees.

To qualify for reimbursement, the Trusteesmust find “dishonest conduct” in a claim.

The evaluation of legal fee claims requiresa difficult sorting of evidence of legal workactually provided from issues of malprac-tice, neglect and breach of contract. Thesedifficulties are compounded by the usualabsence of written retainer agreements,time sheets, law client files, and theaccused lawyer’s refusal to cooperate.

The typical “unearned retainer” losswhich qualifies for an award is about$4,000. While this amount is small incomparison to other categories of loss,the time and effort required in investigat-ing legal fee claims is substantial.

In 1990, the Trustees amended theirRegulations to codify the criminal-lawconcept of “larceny by false promise” asa species of dishonest conduct that canresult in an award of reimbursementfrom the Fund. That codification is con-tained in section 7200.8 (e) of theTrustees’ Regulations. Dishonest con-duct includes an attorney’s misrepresen-tation, or false promise, to provide legalservices in exchange for the advancepayment of a legal fee.

Unearned Legal Fees

Amount of Awards in 2002 BY CATEGORY OF LOSS

Estates and Trusts: $.38 million

Investment: $1.1 million

Other Escrow: $.86 million

Settlements: $.27 million

Unearned Fees: $.15 million

Real Property Escrow: $2.98 million

Total Awards$5.7 Million

Funds nationwide have experienced claimsinvolving a dishonest lawyer’s theft byforging a client’s endorsement on

settlement checks in personal injury actions.The dishonest lawyer often will settle, withoutauthority, the client’s litigation with aninsurance company by forging the client’ssignature on a general release. The theft isfacilitated by a long-standing, and well-intentioned, industry practice to make thesettlement draft jointly payable to the law clientand attorney. The practice did not includenotice of payment to the law client.

The Trustees recommended to the StateInsurance Department in 1988 a regulatorydevice that has proven to be highly effective indeterring and detecting this type of loss. Thepayee notification rule, known as the“Regulation 64 Notice”, requires liability insur-ers and their agents to provide law clients withwritten notice of payment whenever a third-party liability claim is settled for $5,000 or

more. (11 NYCRR 216.9). In effect sinceSeptember 1988, the Regulation 64 Notice hashelped reduce losses and claims to the Fundinvolving the forgery and theft of personalinjury settlements.

A byproduct of the Regulation 64 Notice is thatliability for forgery losses is shifted to bankswhich improperly honor forged endorsementson negotiable instruments. Prior to 1988, for-geries often went undetected and thus civilactions to recover losses were frequentlybarred by the statute of limitations.

The American Bar Association has approvedthe Regulation 64 Notice as a Model Rule forattorney disciplinary systems nationwide.Variations of Regulation 64 have been adoptedin the following nine states: California,Connecticut, Delaware, Georgia, Kansas,Maryland, Nebraska, New Jersey, Pennsylvaniaand Rhode Island. Eleven states have the regu-lation under study.

Theft of Personal Injury Settlements

“ Now more than ever we

think very highly of your

profession”



14

In establishing the Fund, the Legislaturemade clear that reimbursement was intendedfor losses that are connected to the practice

of law and which occur within an attorney-client relationship. The Trustees thus carefullyscrutinize claims involving investmenttransactions with lawyers. The majority ofinvestment claims filed with the Fund have notqualified for reimbursement.

Section 468-b of the Judiciary Law sets forth thestatutory authority of the Fund. It defines “dishon-est conduct” as the misappropriation or wilfulmisapplication of clients’ (emphasis supplied)money, securities, or other property by an attor-ney. Therefore, losses caused by a lawyer’sbreach of fiduciary obligations that do not occurwithin an attorney-client relationship and thepractice of law are not eligible for reimbursement.

Claims involving investment and loan trans-actions with lawyers have proven to be amongthe most difficult claims to evaluate. TheTrustees have adopted the following policyguidelines in order to fully explain toclaimants the eligibility of claims involvingthese type of losses:

“The Trustees will consider for payment onlythose claims arising out of an attorney-clientrelationship. Investment advice given by theclaimant’s attorney, although such advice mayresult in the loss of claimant’s money, is not, in

and of itself, a ground for seeking reimburse-ment from the Fund.

Claims arising out of investments may be con-sidered for payment, however, when the attor-ney is in the possession of the claimant’smoney, which the attorney has obtained byvirtue of an attorney-client relationship with theclaimant, when the attorney advises theclaimant to invest the money in a business orother venture, and the attorney then misappro-priates the claimant’s money.

Ordinarily, interest on investments will not bereimbursed. Unless a claimant establishes oth-erwise, all payments received on an investmentwill be considered to be return of principal andwill be deducted from the claimant’s initialinvestment with the attorney in order to deter-mine, for Fund purposes, the claimant’s reim-bursable loss.”

Since 1982, 1,188 claims alleging $123 mil-lion in losses arising from investment transac-tions with lawyers have been filed with theFund. Awards have been approved in only 319of these claims providing total reimbursementof $13.8 million.

In evaluating investment claims, the Trusteesapply a “but for” test which many of thenation’s protection funds use. Under this test, aloss is eligible if the Board finds that the losswould not have occurred “but for” dishonestconduct in an attorney-client relationship.

Losses in Investment Transactions

Since 1982, approximately one-third ofthe amount of all Fund awards haveinvolved the theft of escrow funds in

real property transactions. The Trusteeshave granted 1,456 awards reimbursing atotal of $31 million in these claims.

A common loss the Fund reimbursesinvolves the theft of a down payment inthe purchase and sale of real property. Indownstate New York, the seller’s lawyeris generally entrusted with the purchas-er’s down payment of 10 percent of thepurchase price to be held in escrow untilthe closing. A theft of a down paymentescrow raises many legal and practicalproblems for the parties, especially whenthe loss is discovered on the eve of aclosing.

The Trustees continue to attempt to sensi-tize clients, lawyers and real estate agentsto the importance of escrowed down pay-ments. At the Trustees’ recommendation,the Legislature added a new Article 36-cto the General Business Law, effectiveJanuary 1, 1991, which codifies fiduciaryobligations to segregate and safeguardcontract deposits in special bankaccounts. The statute requires that eachcontract of purchase and sale identify theescrow agent and the bank where thedown payment is to be deposited pendingthe closing.

The Trustees have also produced andprinted a consumer guide called KnowYour Escrow Rights, with an annotatedversion for lawyers called Know YourEscrow Rights: The Lawyer’s Edition.

Thefts in RealPropertyTransactions

“ Please forgive me for not writing sooner … Please accept my

sincere thanks to you and the other members of The Lawyers’ Fund

as well as to the members of the New York State Bar who have

contributed to that fund.”



15

Dead Lawyers and Missing Clients

Disciplinary Rule 9-102 (e) of the Lawyer’sCode of Professional Responsibilityprovides that only an attorney admitted to

practice law in New York State shall be anauthorized signatory on an attorney’s trust,escrow or special account. The limitation isintended to protect law clients from themisuse of their money. Difficulties thougharise when a sole practitioner passes away.

On December 13, 1994, at the Trustees’ sug-gestion, the Appellate Divisions amendedcourt rules with the addition of DisciplinaryRule 9-102 (g) to address this problem. Thisnew court rule permits a Justice of theSupreme Court to designate a successor sig-natory for the deceased attorney’s trust,escrow or special account. The successor sig-natory must be a member of the bar in goodstanding and admitted to the practice of law inNew York State. The rule specifies the parties

authorized to file the application. Also, that theCourt may direct the funds from the deceasedattorney’s trust, escrow or special account besafeguarded as an escrow fund; disbursed topersons who are entitled thereto; or depositedwith the Lawyers’ Fund for safeguarding anddisbursement to persons due the money.

This court rule has enabled the Lawyers’Fund to recover restitution from the trustaccounts of two deceased lawyers. In bothcases, the Fund had reimbursed clients of thedead lawyers for losses caused by their dis-honest conduct in the practice of law.

Another problem existed with law clientescrow funds which were unclaimed or owedto clients who were missing. To prevent theescheat of these funds to the State as aban-doned property, the Appellate Divisionsamended Disciplinary Rule 9-102 (f), as pro-posed by the Board of Trustees. This new rule

provides that if escrow funds are unclaimedor owed to a client who is missing, anapplication can be made for a court orderdirecting that the money be deposited withthe Lawyers’ Fund for safeguarding anddisbursement to persons who are entitledthereto.

Upon receipt of escrow funds which areunclaimed or owed to missing clients, theFund’s staff attempts to locate the owner ofthe funds in order to return the money tothem. As of December 31, 2002, a total of528 deposits of escrow funds unclaimed orowed to missing law clients were receivedby the Fund. These deposits total $1.1 mil-lion. The search efforts of the Fund’s staffsuccessfully located 61 previously missingclients and restored over $208,000 tothem. The monies are maintained in a spe-cial escrow account in the state treasury.

Adishonored check drawn upon anattorney’s special, trust or escrow accountis a clear warning sign of the possible

misuse of client funds. Too often, a client willaccept an excuse offered by a dishonestattorney. This forbearance enables a dishonestlawyer to manipulate and conceal the misuse ofother clients’ funds.

The American Bar Association proposed aModel Overdraft Rule intended to deter anddetect client losses. The Trustees in 1989 pro-posed to the Administrative Board of the Courtthat a form of the ABA’s model rule be imple-mented by court rule in New York State.Discussions were held with representatives ofthe New York State Bankers and BarAssociations. The Appellate Divisions thenpromulgated necessary rule changes effectiveJanuary 1, 1993.

New York court rules (22 NYCRR1200.46(b)(1), (2); Part 1300) require that alawyer maintain funds belonging to anotherperson incident to the lawyer’s practice of lawin a special account separate from the lawyer’sbusiness, personal or other accounts. Theseseparate fiduciary accounts must be designatedas an “Attorney Special Account”, or an“Attorney Trust Account”, or an “AttorneyEscrow Account”. Lawyers may only use bankswhich have agreed to report dishonored checkson these accounts.

Nearly all banking institutions in New York Stateparticipate in this reporting rule. The Lawyers’Fund serves as a clearinghouse in this clientprotection program. Bounced check notices aremailed to the Fund’s offices in Albany. They areheld for 10 business days to allow banks towithdraw notices that were filed in error. If notwithdrawn, each notice is forwarded to theappropriate attorney disciplinary committee forinvestigation. A lawyer/law firm named in abounced check report is required to provide thecommittee with a written explanation for thetransaction, and bank statements on the attorneytrust account for the prior six months.

The Fund has processed approximately 4,600bounced check reports with a total face amountin excess of $90 million. The majority ofbounced check notices result from innocentdeficiencies in law office banking practices, notdishonest conduct. In these cases, the rule hasserved an educational role for the bar by alert-ing practitioners to the accounting, bankingand recordkeeping requirements of theLawyer’s Code of Professional Responsibility.

Real estate practice has been identified byattorney disciplinary committees as the areawhich generates the highest percentage ofbounced check reports. These reports arelargely the result of lawyers issuing checksagainst uncollected funds in commercial andresidential realty closings.

The Dishonored Check Reporting Rule is aproven loss prevention and detection device.Since 1993, approximately 90 lawyers havebeen identified and disciplined for misusingclient funds because of bounced check reports.Many of those lawyers have been accused ofdishonest conduct in claims to the Fund. Therehave been 48 dishonest attorneys whose mis-conduct was detected by the Dishonored CheckRule. These 48 lawyers have been involved in290 awards of reimbursement totaling $5.5million. These lawyers surely would havecaused greater losses if this client protectiondevice was not in place.

The importance of the Dishonored Check Rulehas been fortified by Home Savings of AmericaF.S.B. v. Amoros, et al., 233 A.D.2d 35, (1stDep’t 1997). In that action, the AppellateDivision, First Department, held that a bank’sfailure to comply with the reporting provisionsof the Dishonored Check Rule is prima facieevidence of its negligence. A more recentexample of possible bank liability for failure tocomply with the Rule’s reporting requirementsis Lawyers’ Fund for Client Protection v DimeSavings Bank, No. 24711/99 (Sup. Ct., NassauCo. 2001), aff’d, 294 A.D.2d 337 (2d Dep’t2002) which is discussed in the Appendix.

The Dishonored Check Reporting Rule


16

Claims Filed and AllegedLosses, 1982 to 2002

Since 1982, 11,334 claims have been filedwith the Lawyers’ Fund. These claims havealleged $371 million in total losses. The

lowest number of claims filed in any one yearwas 230 in 1984. In 1997, the record numberof 1,128 claims were filed.

Filings by Category of ClientLoss, 1982 to 2002

Claims filed with the Lawyers’ Fund areclassified into the following eightcategories:

(1) trusts and estates; (2) real property escrowfunds; (3) debt collection proceeds; (4) settle-ments in litigation; (5) other escrow transac-tions; (6) a lawyer’s refusal to refund unearnedlegal fees; (7) embezzlements in investmenttransactions with law clients; and (8) a miscel-laneous category of “other” for other claims.

By category, the largest number of claims seekreimbursement of unearned legal fees. Since1982, the Fund has received 4,100 claimsinvolving legal fees, or 36 percent of all claimsfiled. The second largest category of filedclaims alleges losses in real property transac-tions. The Fund has received 2,278 claims inthis category, approximately 20 percent of allfiled claims.

The largest alleged dollar losses are in claimsalleging losses from investment transactionswith lawyers. Approximately 33 percent of allalleged losses stem from investment claims.These claims have alleged $122 million inlosses. Alleged losses involving thefts in realproperty transactions have totaled $78 millionin losses, or 21 percent of all reported losses.Approximately 19 percent of all alleged lossesinvolve thefts from estates and trusts. Theseclaims have alleged $70 million in losses.

Only 711 former members of the barhave been responsible for the 5,428awards granted by the Fund in 20

years. This is an increase of 28 dishonestlawyers from 2001. The lawyers involvedin awards are identified in the Appendix,along with the judicial districts where theymaintained their practices, and the total ofthe awards of reimbursement granted totheir victims. The majority of theftsinvolve sole practitioners, the majority ofwhich are male and middle-aged.

Lawyers Involved in Awards, 1982 to 2002

The apparent causes of misconduct bythese lawyers is often traced to alcohol ordrug abuse. Other causes are marital, pro-fessional and medical problems. Gamblingand economic problems from the lawyer’spractice or outside commercial activitiesalso often contribute to misconduct.

The geographic distribution of these 711former lawyers among the state’s judicialdepartments is as follows:

0 50 100 150 200 250 300 350

216

326

61

108

Lawyers Involved in All Awards Since 1982

0 500 1000 1500 2000 2500 3000 3500

1,145

3,213

474

596

Distribution of Awards Since 1982

Claims Received and Processed


17

Claims Filed in 2002

In 2002, there were 499 claims filed with theFund. This is 49 fewer claims than the 548claims filed in 2001. The 499 claims in 2002

alleged total losses of $21.8 million.

Once again, the largest single category of filedclaims sought reimbursement of legal fees.Approximately 43 percent of all 2002 claimsinvolved legal fees. These 213 claims allegedtotal losses of $1.5 million.

The largest alleged losses in 2002 claimsinvolve investment transactions with lawyers.These claims alleged losses of $7.4 million.Alleged losses in real property transactionswas the second largest category at $6.1 millionin alleged losses.

Awards of Reimbursement,1982 to 2002

Since 1982, the Fund has approved 5,428awards of reimbursement restoring $97.3million to eligible law clients. On average,

since 1982, 91 percent of all eligible claimantshave received full restitution.

By category, the largest number of awardsapproved are for unearned legal fees. Since1982, the Fund has approved 1,564 claimsinvolving legal fees, or 29 percent of all awards.The second largest category of reimbursementawards involve real property escrows. The Fundhas approved 1,456 awards in this category,approximately 27 percent of all awards.

The largest dollar amount of awards approvedby the Fund also involve real property escrows.These awards total $31.1 million or 32 percentof all reimbursement awards. The secondlargest dollar amount of awards involve theftsfrom estates and trusts: $27.5 million in reim-bursement awards or 28.2 percent of all awards.

Awards of Reimbursement in 2002

In 2002, the Trustees approved 187 awards,an increase of 27 over the 160 awardsgranted in 2001. The awards in 2002

provided total reimbursement of $5.7 millioncompared to $5.3 million in 2001. All but threeclaimants in 2002 received full reimbursementfor their eligible loss.

The awards ranged between $200 and$300,000. The median client loss, and award,was $8,761, up from $5,921 in 2001.

Only 51 former members of the bar wereresponsible for the dishonest conduct inawards in 2002. Of these 51 former lawyers, 23were respondents in awards from prior years.The names of 28 dishonest lawyers appear forthe first time in 2002 awards.

Ineligible Claims, 1982 to 2002

In 20 years, the Fund has rendereddeterminations in 11,165 claims. Of these11,165 claims, 5,737 (51%) were found to be

ineligible for reimbursement. Alleged losses inrejected claims since 1982 exceed $229 million.

Claims Pending, December 31, 2002

The Fund ended 2002 with 229 pendingclaims. This is an increase of 31 over the198 claims which were pending on

December 31, 2001.

These 229 pending claims allege total lossesof $13.7 million. The Fund’s exposure on thesepending claims, adjusted for the $300,000maximum limit on awards, is $10.2 million.

0

$2Million

$4Million

$6Million

$8Million

$10Million

$12Million

1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

$0.0

3 $0.6

9

$0.8

7

$1.3

$1.1 $1

.9

$2.8

$3.8

$4.6

$4.1

$7.3 $7.5 $7.6

$5.7

$9.9

$6.9

$5.9

$3.4

$10.

5

$5.3 $5

.7


Amount of Awards 1982-2002 BY YEAR

Amount of Awards 1982-2002 BY CATEGORY OF LOSS

Claims Received and Processed

Estates and Trusts: $27.5 million

Investment: $13.8 million

Debt Collection $.67 million

Other Escrow: $12.1 million

Settlements: $9.1 million

Unearned Fees: $3.1 million

Real Property Escrow: $31.1 million



18

Recommendations

Since 1982, the Trustees haverecommended changes in policy andlegal practice to protect legal consumers

from dishonest conduct in the practice oflaw. These annual recommendations aremade as part of the statutory responsibilityof the Lawyers’ Fund to maintain theintegrity and protect the good name of thelegal profession as well as promote publicconfidence in the administration of justice inNew York State.

Alcohol and SubstanceAbuse in the LegalProfession

The Trustees have witnessed theeconomic and emotional harm sufferedby law clients of lawyers with alcohol

and substance abuse problems. Over theFund’s 20 years, a large percentage of theFund’s awards have resulted frommisconduct attributed to these addictions.

Chief Judge Kaye established in 1999 theCommission on Alcohol and Drug Abuse inthe Legal Profession in order to institute acomprehensive statewide effort to combatthe problems of lawyer alcohol and sub-stance abuse. The Commission recom-mended the establishment of the “LawyerAssistance Trust”, a permanent entitycharged with the mission of marshalingstatewide resources and awareness to theprevention and early treatment of alcoholand substance abuse among lawyers, judgesand law students.

The Trustees fully support the LawyerAssistance Trust and its early efforts to pub-licize the dangers of substance abuse andavailability of assistance. The Trusteesencourage grant programs for substanceabuse prevention projects and agree with theTrust’s focus on the vital role law schoolscan play in identifying and preventing sub-stance abuse.

Bar Examinations

The Trustees continue to recommend thatthe State Board of Law Examiners testcandidates for the New York bar

examination for knowledge and competencewith respect to a lawyer’s fiduciary

obligations to safeguard and account for lawclients’ money and property as required byDisciplinary Rule 9-102 of the Lawyer’s Codeof Professional Responsibility. The Trusteesfirmly believe that our system of legaleducation should prepare students for this vitalaspect of lawyering.

The general law school curriculum does notprovide law students with the necessaryknowledge or skills to properly administerclient trust funds as fiduciaries or escrowagents. These skills can and should be taughtand enhanced through the bar examinationand New York’s Continuing Legal Educationprogram. Attorney accounting and recordkeep-ing should be included as fundamental sub-jects for legal education.

Disbarment for Conversion

The Trustees again recommend aconsistent, firm statewide disciplinarypolicy imposing disbarment for a lawyer

who injures clients by converting escrowfunds. This clear, evenhanded penalty willdeliver a strong message to victims, the publicand lawyers about the administration of justicein our State.

The Trustees are grateful to the AppellateDivisions and their disciplinary staff for includ-ing orders of restitution in disbarment proceed-ings involving clear cases of lawyer theft. Thisimportant use of the provisions of the JudiciaryLaw has proven to be beneficial to victims andthe Lawyers’ Fund.

Confidentiality in LawyerDiscipline Proceedings

Section 90 of the Judiciary Law providesthat lawyer discipline proceedings shall be“deemed private and confidential”, and

that all “papers, records and documents” besealed unless the court sustains the charges ofmisconduct lodged against the respondentlawyer.

Confidentiality should not remain in discipli-nary proceedings when a court has probablecause that a lawyer has stolen law client funds.The Trustees’ experience over twenty years hasdemonstrated that dishonest lawyers can anddo exploit the laws of confidentiality to concealdishonest and criminal activity.

The Trustees also recommend that court rulesand policies statewide require that the localDistrict Attorney be notified whenever an attor-ney disciplinary committee has evidence of alarceny by a lawyer in the practice of law. Alawyer who steals should not be shielded fromcriminal prosecution by confidentiality.

Bank Notices to Fiduciaries

The Trustees’ experience in claims involvingthe theft of estate or trust assets hasshown that these types of losses can be

concealed when someone other than thefiduciary controls the bank account andreceives the monthly bank statements.

The laws of New York should require that thenamed fiduciary for an estate or trust be pro-vided with a copy of the estate’s monthlybank statement. Existing law requires everybank to have written proof of a fiduciary’sappointment before it can open an estate orsimilar trust account. It would not be a bur-den on banks to require the mailing of a copyof the monthly bank statement to the fiducia-ry’s residence. This simple step would dis-courage and detect thefts.

Absent legislative action, the Trustees proposethat a court rule be adopted which would pro-hibit lawyers from depositing fiduciarymonies in banking institutions that do notagree to send copies of monthly bank state-ments to the legal fiduciaries of these estatesand trusts. Such a rule could be patternedafter the Dishonored Check Reporting Rulewhich has proven to be a successful theftdetection device.

Thefts by Suspended,Disbarred and BogusLawyers

The unauthorized practice of law is amisdemeanor under New York’s penallaws. This crime though is seldom

criminally prosecuted. In addition, the attorneydisciplinary committees do not have theresources to monitor lawyers who have beensuspended or disbarred. These shortcomingsin law enforcement encourage the illegalpractice of law, and the exploitation of thepublic, lawyers, judges and court personnel.


19

Recommendations

The Office of Court Administration maintainsan Official Register of Attorneys, whichincludes current licensing information. (SeeJudiciary Law §468). The Official Register alsoassigns to each lawyer a unique identificationnumber. At the urging of the Trustees, theLegislature in 1988 declared the OfficialRegister a public record.

The Trustees recommend a rule of court thatevery lawyer be required to endorse his or herAttorney Registration Number on each pleadingor brief that the lawyer files with a court or acourt agency. That simple endorsement willprovide a cost-free and reliable opportunity toverify the credentials of persons who claim tobe licensed to practice law in the Empire State.

The Trustees also recommend passage ofpending legislation which would authorize thestate attorney general to pursue criminal prose-cutions for the unauthorized practice of law.This additional enforcement of the penal lawswill serve to protect the public and deter theillegal practice of law.

Escrow Thefts in RealProperty Transactions

Since 1982, approximately 27 percent ofall awards from the Lawyers’ Fund haveinvolved documented thefts in the sale

and purchase of real property. In 2002, 42percent of all awards by the Fund reimbursedthe theft of real property escrows. In twentyyears, the Trustees have restored $31 millionin established thefts of this type totaling $34.7million.

These losses typically occur in residentialtransactions, and often involve the theft of thebuyer’s down payment by the seller’s attorney.These losses can be sizeable, especially down-state where the standard down payment is 10percent of the purchase price.

As with thefts involving estates, regulatorymeasures could readily protect home buyersand sellers from the theft of escrow money inreal property transactions, particularly downpayments. By statute, for example, theDepartment of Law protects escrow accounts incondominium and cooperative conversions.Escrow deposits in the purchase and sale of res-idences are deserving of comparable protection.

The Trustees also recommend that legal con-sumers in real estate transactions be provided

with educational material concerning theirescrow rights. This should assist escrow bene-ficiaries in monitoring the handling of theirescrow funds and detecting and preventinglosses from occurring.

Interest on Down PaymentsHeld in Escrow

Section 778-a of the General Business Lawrequires that down payments in thepurchase and sale of residential real

property be safeguarded in special bankaccounts, and that the contract identify theescrow agent and the bank where the downpayment is to be deposited.

The statute permits the escrow agents to use anon-interest bearing bank account. TheTrustees recommend that the statute be amend-ed to require interest-bearing accounts. Also,that the interest be paid or credited to thebuyer, unless the contract provides otherwise.

We know of no sound reason for using non-interest bearing bank accounts in light of thestate of modern banking and electronic tech-nology. We also believe that legal consumers,and their lawyers, would be more vigilant inthese escrow transactions if the law providedthem with an economic interest in the form ofbank interest.

Escrow Accounts ofSuspended and DisbarredLawyers

Present court rules in New York make nospecific provision for the transfer orprotection of law client escrow funds and

property in possession of members of the barwho are suspended or disbarred forprofessional misconduct. The Trustees areconcerned that law client assets are notadequately safeguarded when it is clear thatthey may be in danger if left under the controlof a lawyer who has lost his or her license topractice law for serious misconduct.

The Trustees recommend the enactment ofclear and precise court rules directing a sus-pended or disbarred lawyer to transfer clientfunds and property, prohibiting further use ofattorney escrow accounts and restraining

escrow account funds in jeopardy. Thesemeasures will protect the interests of legalconsumers.

Interim Suspensions andRestraining Escrow Funds

Court Rules in New York State allow forthe temporary suspension of anattorney when there is a judicial finding

that the attorney is guilty of professionalmisconduct immediately threatening thepublic interest. The temporary suspensionremains in effect until the consideration ofdisciplinary charges against the attorney.

The Trustees propose that these court rulesbe augmented by granting discretion to theAppellate Divisions to restrain attorneyescrow accounts of lawyers who are deter-mined to be a public threat. This client pro-tection measure will safeguard client fundswhich are likely in jeopardy.

Multijurisdictional Practiceand Pro Hac Vice Rules

Bar leaders in New York State are nowconsidering issues involving themultijurisdictional practice of law and

whether there should be greater freedom forlawyers to practice in states where they arenot admitted to the bar. The Trustees areconcerned about the impactmultijurisdictional practice of law will haveon legal consumers, the Lawyers’ Fund andour disciplinary system.

The Trustees recommend that any changesin court rules which permit out-of-stateattorneys to practice law in New York Stateshould also require that they contributefinancially to our State’s disciplinary systemand the Lawyers’ Fund. If the Lawyers’ Fundand our disciplinary system will be called onto assume liability for potential misconductby foreign attorneys, it is only fair that out-of-state attorneys authorized to practice lawhere share in the responsibilities all NewYork attorneys bear in our justice system.


20

It is an honor to serve as a Trustee of theLawyers’ Fund, and a rewarding experience,personally as well as professionally. The

overwhelming support which the Fund hasreceived from the legal profession and thegovernmental representatives of New YorkState continues to be a source ofencouragement for the Board of Trustees, andthe Fund’s staff.

As Chief Judge Kaye notes in her foreword, theTrustees’ continuing experience is that the vastmajority of New York’s legal profession arehonest and caring and observe the higheststandards of integrity when entrusted with lawclient money and property. While incidents ofdishonest conduct in the practice of law per-sist, the lawyers responsible for this miscon-duct are a tiny percentage of the bar’s totalmembership.

As one of the smallest of government agencies,the Lawyers’ Fund relies greatly upon the kind-ness and support of colleagues in public serv-ice. As in prior years, we readily acknowledgeour special appreciation to:

• The Clerk of the Court of Appeals and hisassociates for their wise counsel as theFund’s liaison to the Judges of the Court;

• The Office of Court Administration for theirstalwart support, the efficient collection ofour revenue, technical assistance in budg-eting and administration;

• The staffs of Attorney GrievanceCommittees statewide for their unfailinghelp and cooperation in investigatingclaims, securing restitution orders in dis-ciplinary proceedings, and the compas-sion and support they provide to victimsof dishonest lawyers;

• The Attorney General and his assistantsfor their expert legal counsel; and

• Assistant District Attorneys for their effortsto secure restitution or orders of restitutionfor victims of dishonest conduct in thecriminal justice process;

• The Office of the State Comptroller for theprudent investment of the Fund’s assets,and the prompt processing and paymentof awards and other expenses from theFund’s special revenue account.

Afterword

“”

“ It is reassuring to know that professional ethics exist

and that the legal profession in New York has a fund to

help victims of the few unetical members of the legal

community.”


The Fund’s mission is to maintain the integrity

and protect the good name of the legal

profession, protect law clients from

dishonest conduct in the practice of law,

and promote public confidence in the

administration of justice in New York State.

“ I strongly believe that the legal profession is a noble

profession and I will continute to trust in lawyers.”



Statistical Tables

21

Client Losses in 2002 AwardsCategory of Number Percent of Amount of Percent Client Losses Percent of Percent of All Client Loss of Awards All Awards All Awards of Awards Involved All Losses Losses Reimbursed

Estates and Trusts 8 4.3% $382,606 6.7% $382,606 6.5% 100.0%Real Property Escrow 79 42.2% $2,984,538 52.0% $3,124,538 53.1% 95.5%Unearned Fees 57 30.5% $151,949 2.6% $151,949 2.6% 100.0%Settlements 11 5.9% $270,156 4.7% $270,156 4.6% 100.0%Other Escrow 19 10.2% $856,494 14.9% $856,494 14.6% 100.0%Debt Collection 0 0.0% $0 0.0% $0 0.0% 0.0%Investment 13 7.0% $1,096,758 19.1% $1,096,758 18.6% 100.0%Totals 187 100% $5,742,501 100% $5,882,501 100%

Client Losses in All Awards Since 1982Category of Number Percent of Amount of Percent Client Losses Percent of Percent of All Client Loss of Awards All Awards All Awards of Awards Involved All Losses Losses Reimbursed

Estates and Trusts 600 11.1% $27,466,165 28.2% $48,150,344 36.0% 57.0%Real Property Escrow 1,456 26.8% $31,050,550 31.9% $34,713,450 26.0% 89.4%Unearned Fees 1,564 28.8% $3,070,506 3.2% $3,095,606 2.3% 99.2%Settlements 442 8.1% $9,057,864 9.3% $9,604,561 7.2% 94.3%Other Escrow 599 11.0% $12,125,411 12.5% $18,881,658 14.1% 64.2%Debt Collection 448 8.3% $661,184 0.7% $716,184 0.5% 92.3%Investment 319 5.9% $13,823,176 14.2% $18,468,538 13.8% 74.8%Totals 5,428 100% $97,254,856 100% $133,630,341 100%

Losses Reported in 2002 ClaimsCategory of Client Loss Number of Claims Percent of all Claims Amount of Loss Alleged Percent of all LossesEstates & Trusts 21 4.2% $1,206,726 5.5%Real Property Escrow 101 20.2% $6,060,869 27.8%Unearned Fees 213 42.7% $1,498,768 6.9%Settlements 32 6.4% $1,597,542 7.3%Other Escrow 45 9.0% $2,786,417 12.8%Debt Collection 0 0.0% $0 0.0%Investment 37 7.4% $7,395,333 33.9%Other 50 10.0% $1,252,070 5.7%Totals: 499 100% $21,797,725 100%

Appendix

All Losses Reported Since 1982Category of Client Loss Number of Claims Percent of all Claims Amount of Loss Alleged Percent of all LossesEstates & Trusts 869 7.7% $70,133,156 18.9%Real Property Escrow 2,278 20.1% $78,563,029 21.2%Unearned Fees 4,100 36.2% $16,777,382 4.5%Settlements 794 7.0% $20,377,953 5.5%Other Escrow 979 8.6% $43,207,293 11.6%Debt Collection 605 5.3% $2,061,293 0.6%Investment 1188 10.5% $122,587,157 33.0%Other 521 4.6% $17,395,273 4.7%Totals: 11,334 100% $371,102,536 100%


22

AppendixCl

aims A

ctivi

ty S

ince

1982

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Tota

ls

Claim

s File

d53

437

523

033

234

131

135

148

643

851

562

763

659

890

973

011

2881

244

249

254

849

911

,334

Loss

es A

llege

d(M

illion

s $)

$3.2

$5.4

$6.1

$5.3

$5.1

$5.7

$10.8

$14.1

$15.8

$28.3

$25.2

$25.4

$25.5

$36.8

$29.9

$40.8

$24.3

$15.9

$20.5

$22.6

$21.8

$371

.1

Claim

s App

rove

d1

494

130

183

178

159

202

177

219

200

288

318

362

383

381

625

415

161

205

160

187

5,428

Actua

l Los

ses

(Milli

ons $

)$0

.1$1

.5$1

.9$2

.5$1

.3$2

.0$3

.8$6

.3$4

.8$5

.8$1

3.5$1

2.4$1

0.4$8

.9$1

3.7$9

.1$6

.8$3

.7$1

4.2$5

.3$5

.9$1

33.8

Award

s (M

illion

s $)

$0.03

$0.69

$0.87

$1.3

$1.1

$1.9

$2.8

$3.8

$4.6

$4.1

$7.3

$7.5

$7.6

$5.7

$9.9

$6.9

$5.9

$3.4

$10.5

$5.3

$5.7

$96.9

Lawy

ers In

volve

d1

1326

4326

2436

2638

4438

5245

6038

3929

2849

2828

711

% Lo

sses

Reim

burse

d50

%46

%46

%52

%85

%95

%74

%60

%96

%71

%54

%60

%73

%64

%72

%76

%87

%92

%74

%10

0%97

%

% C

lients

Fully

Reim

burse

d0.0

%73

.5%65

.4%38

.8%91

.0%98

.7%99

.5%97

.7%96

.3%93

.5%95

.0%94

.3%94

.2%97

.6%93

.7%97

.6%98

.9%99

.4%96

.6%10

0.0%

98.0%

Claim

s Disa

llowe

d33

201

105

7316

412

011

916

918

636

025

338

424

736

643

962

052

238

332

938

328

15,7

37

Total

Disp

ositio

ns34

695

235

256

342

279

321

346

405

560

540

702

610

749

820

1245

937

544

534

543

468

11,16

5

Claim

s Pen

ding

Dec.

3150

018

017

525

125

028

231

245

248

544

052

646

044

960

957

946

233

723

519

319

822

9

Loss

es A

llege

d In

Pend

ingCl

aims

(Milli

ons $

)$2

.9$4

.6$7

.4$8

.5$9

.5$1

0.2$1

5.3$1

8.0$2

3.9$3

2.0$3

0.1$2

4.2$2

7.3$4

3.5$4

6.9$4

6.6$1

8.0$1

6.1$1

0.2$1

1.1$1

3.7

Expo

sure

on P

endin

g Cl

aims (

Milli

ons $

)$1

.7$1

.6$2

.3$2

.7$3

.5$5

.2$6

.3$9

.8$1

5.1$1

4.9$1

6.0$1

3.9$1

5.2$2

4.4$2

5.1$1

7.4$1

1.3$1

1.6$8

.3$9

.2$1

0.2

Fund

Bala

nce

(Milli

ons $

)$1

.8$1

.4$2

.1$1

.3$4

.4$3

.3$5

.1$4

.2$3

.6$2

.8$3

.4$1

.8$2

.4$3

.4$2

.5$2

.1$6

.6$6

.3$3

.4$4

.1$5

.4


23

NY State Finance Law,Section 97-t.

LAWYERS’ FUND FOR CLIENT PROTECTION OF THE STATE OFNEW YORK.

1. There is hereby established in the custody of the statecomptroller a special fund to be known as the “lawyers’fund for clients protection of the state of New York”.

2. The full amount of the allocable portion of the biennialregistration fee collected pursuant to the provisions ofsection four hundred sixty-eight-a of the judiciary lawand such other monies as may be credited or otherwisetransferred from any other fund or source, pursuant tolaw, including voluntary contributions, together with anyinterest accrued thereon, shall be deposited to the creditof the lawyers’ fund for client protection of the state ofNew York. All deposits of such revenues not otherwiserequired for the payment of claims as hereinafter pre-scribed shall be secured by obligations of the UnitedStates or of the state having a market value equal at alltimes to the amount of such deposits and all banks andtrust companies are authorized to give security for suchdeposits. Any such revenues in such fund, may beinvested in obligations of the United States or of thestate, or in obligations the principal and interest on whichare guaranteed by the United States or by the state.

NY Judiciary Law, Section 468-b.

CLIENTS’ SECURITY FUND OF THE STATE OF NEW YORK.*

1. The court of appeals shall appoint a board of trustees toadminister the lawyers’ fund for client protection of thestate of New York established pursuant to section ninety-seven-t of the state finance law. Such board shall consistof seven members. Of the trustees first appointed, threeshall be appointed for a term of three years; two for aterm of two years; and two for a term of one year. Aseach such term expires, each new appointment shall befor a term of three years. The court of appeals mayrequire such reports or audits of the board as it shallfrom time to time deem to be necessary or desirable.

2. The board shall have the power to receive, hold, manageand distribute the funds collected hereunder for the pur-pose of maintaining the integrity and protecting the goodname of the legal profession by reimbursing, in the dis-cretion of the trustees to the extent they may deem prop-er and reasonable, losses caused by the dishonest con-duct of attorneys admitted to practice in this state. Forpurposes of this section, the term “dishonest conduct”shall mean misappropriation or wilful misapplication ofclients’ money, securities, or other property, by an attor-ney admitted to practice in this state.

3. The board of trustees shall adopt regulations for theadministration of the lawyers’ fund for client protectionof the state of New York and the procedures for presen-tation, consideration, allowance and payment of claims,including the establishment of a maximum limitation forawards to claimants.

4. The board of trustees shall have the sole discretion todetermine the merits of claims presented for reimburse-ment, the amount of such reimbursement and the termsunder which such reimbursement shall be made. Suchterms of reimbursement shall require that the claimant

execute such instruments, take such action or enter intosuch agreements as the board of trustees shall require,including assignments, subrogation agreements andpromises to cooperate with the board of trustees in mak-ing claims against the attorney whose dishonest conductresulted in the claim.

5. The board of trustees shall serve without compensationbut shall be entitled to receive their actual and necessaryexpenses incurred in the discharge of their duties.

6. The board of trustees may employ and at pleasureremove such personnel as it may deem necessary forthe performance of its functions and fix their compensa-tion within the amounts made available therefor.

7. The board of trustees shall be considered employees ofthe state for the purpose of section seventeen of thepublic officers law.

8. All payments from the lawyers’ fund for client protectionof the state of New York shall be made by the statecomptroller upon certification and authorization of theboard of trustees of said fund.

9. Acceptance of an award of reimbursement from thelawyers’ fund for client protection shall, to the extent ofsuch award, (a) subrogate the fund to any right or causeof action that accrued to the claimant as a consequence ofthe dishonest conduct that resulted in the claimant’saward and (b) create a lien in favor of the fund that shallattach to any money asset that is designated to be paid tothe claimant from, or on behalf of, the attorney whocaused the claimant’s loss. If the fund fully reimburses theclaimant’s loss, as determined by the board of trustees,the lien shall be in the amount of the fund’s award. If theclaimant’s loss exceeds the fund’s award, the lien shall notextend to the claimant’s right to recover additional restitu-tion from the attorney for the claimant’s unreimbursedloss. In the event of a recovery by the fund, a claimantshall be entitled to any money recovered in excess of thefund’s award of reimbursement to the claimant.

* So in original. Probably should be “Lawyers’ Fund forClient Protection of the State of New York”.

Case Law Involving theLawyers’ Fund

Lawyers’ Fund v. Bank Leumi Trust Company, et al., 94N.Y.2d 398 (2000). Clarified the right of the Lawyers’ Fund torecover more than it paid on a claim, and the amount of thedrawee’s liability on a check which is negotiated bearing aforged payee endorsement.

Clients’ Security Fund v. Goldome, 148 Misc.2d 157 (Sup.Ct., Monroe Co. 1990) Fund granted summary judgment forthe face amount of a law client’s forged check. The defendantbank was denied standing to challenge the Trustees’ exerciseof discretion in reimbursing a theft which occurred after alawyer’s disbarment.

Lawyers’ Fund for Client Protection v. Manufacturers Hanover,153 Misc.2d 360 (Sup. Ct., Albany Co. 1991), Clarifiedissues of common law by holding that an attorney in a debtcollection engagement has no apparent authority to endorsethe client’s signature on the check that pays the debt. Thedefendant bank was held strictly liable to the Lawyers’ Fundas the client’s subrogee.

Matter of Estate of Sheridan, 149 Misc.2d 519 (Surr. Ct.,Yates Co. 1991) Recognized the Fund’s capacity to assert the“sovereign’s prerogative right” under common law to priorityas a creditor. The Lawyers’ Fund, in its capacity as an agencyof the State of New York, was entitled to priority over all othernon-secured creditors of a dishonest lawyer’s estate. (seealso, Mtr. of Estate of Zimmerman, No. 272547 (Surr. Ct.,Nassau Co. 1996), and Rowley v. Besse, No. 836-93 (Sup.Ct. Albany Co. 1997)).

Lawyers’ Fund for Client Protection v. Gateway State Bank,239 A.D.2d 826 (3d Dep’t. 1997), Extended the Fund’s credi-tor rights in a forged endorsement case and applied a six-yearstatute of limitations, in contract, to the Fund’s subrogationclaim against a disbarred lawyer’s depository bank .

Lawyers’ Fund for Client Protection v. Gateway State Bank,181 Misc.2d 660 (Sup. Ct. Albany Co. 1999). On remand, thecourt granted summary judgment to the Lawyers’ Fund,notwithstanding the bank’s claim that it acted in a reasonablycommercial manner in servicing this attorney escrow account.

Lawyers’ Fund for Client Protection v. Gateway State Bank,273 A.D.2d 565 (3d Dep’t 2000). On appeal, the court upheldthe denial of the bank’s motion for summary judgment, butreversed the summary judgment granted the Fund on thebasis that there was insufficient evidence to hold as a matterof law that the defendant bank had failed to act in accordancewith reasonable commercial standards.

Fergang v. Flanagan, 174 Misc.2d 790 (Sup. Ct., Nassau Co.,1997), aff’d 259 A.D. 2d 598 (2d Dep’t 1999) Clarified the lia-bilities of payee and depository banks in forged endorsementlitigation. Aff’d, 259 A.D. 2d 597 (2nd Dep’t, 1999).

Lawyers’ Fund v. Chemical Bank, 246 A.D.2d 403 (1st Dep’t.1998). The decision holds that a law client who loaned a por-tion of her personal injury settlement to her law firm ratifiedthe forgery of her endorsement on the settlement check. Theratification occurred despite the claimant’s ignorance of theforgery and her status as a co-payee.

Lawyers’ Fund v. Bank Leumi Trust Co., et al., 286 A.D.2d 836(3rd Dep’t. 1998). The Fund appealed the denial of summaryjudgment on its subrogation claim to recover the face amountof a forged personal injury settlement check “payable through”the insurer’s bank. The Appellate Division reversed and grant-ed judgment to the Fund for the amount of its award.

Lawyers’ Fund for Client Protection v Dime Savings Bank, No.24711/99 (Sup. Ct., Nassau Co. 2001), aff’d, 294 A.D.2d 337(2d Dep’t 2002). Held that the Fund could proceed with caus-es of action in negligence and breach of contract against adishonest lawyer’s depository bank for its failure to providethe Fund with notices of dishonored checks drawn upon thelawyer’s escrow account.

Matter of Natale, 211 A.D.2d 36 (2d Dep’t’ 1995). TheAppellate Division implemented a unique restitution arrange-ment and authorized the Lawyers’ Fund to administer a reim-bursement pool financed by legal fees owed to the disbarredlawyer permitting the Fund to fully reimburse a youngwoman’s $388,000 catastrophic loss.

Matter of Dussault, 215 A.D.2d 843 (3d Dep’t 1995) TheCourt provided judgments of restitution to 100 escrow ben-eficiaries who were creditors of the dishonest lawyer’sclients. Those judgments were converted into awards ofreimbursement totaling $168,690.

Appendix


24

Article 78 Proceedings

Matter of Tabak v. Lawyers’ Fund, 166 Misc.2d 502 (Sup. Ct.,Albany Co. 1995). Challenged the Trustees’ determination thatthe alleged loss involved a default on a personal loan with theclaimant’s attorney, not dishonest conduct constituting a theftof law client money in the practice of law. In sustaining theTrustees’ determination, the Court reviewed the Trustees’broad grant of discretion from the Legislature, their procedur-al regulations and their determination that the claimant hadnot provided satisfactory evidence of a reimbursable loss. Thecourt held that the Fund’s procedures provided adequate dueprocess, that the Trustees’ determination was supported bythe record, and that it was neither arbitrary nor capricious.

Matter of Bluth v. Lawyers’ Fund, No. 044062/97 (Sup. Ct.,Kings Co. 1998), aff’d 259 A.D.2d 543 (2d Dep’t 1999). Heldthat the “The Lawyers’ Fund . . . properly exercised its discre-tion in this proceeding.” wherein the Trustees determined theclaimant did not provide satisfactory evidence of an eligibleloss in a real estate transaction with a lawyer who was dis-barred for unrelated professional misconduct.

Matter of Haskins v. Lawyers’ Fund, No. 25544/1999 (Sup.Ct., Suffolk Co. 1999), rev’d, 286 A.D.2d 440 (2d Dep’t2000). Reimbursement was denied when the Board deter-mined that the claimant did not provide satisfactory evi-dence establishing that his loss resulted from a theft ofescrow money, as opposed to the repayment of a loan to hisattorney. The lower court annulled the determination of theBoard. The Appellate Division, Second Department, reversedthe Supreme Court on August 20, 2001 holding that “thedetermination by the board of trustees was not arbitrary orcapricious.”

Matter of Beutz v. Lawyers’ Fund, 187 Misc.2d 359 (Sup. Ct.Albany Co. 2000). Affirmed determination of Trustees whichdenied reimbursement to a claimant who delivered monies tohis lawyer in order to bribe public officials. The Courtreviewed the Fund’s thorough investigation of the claim andthe ample opportunities provided to the claimant to establisheligibility of his loss. The Court determined that there was arational basis for the Trustees concluding that the claimant’sown criminal conduct substantially contributed to his loss.

Matter of Plater v. Lawyers’ Fund, No. 7340-00 (Sup. Ct.,Albany Co. 2000), aff’d 294 A.D.2d 719 (3d Dep’t 2002),leave to appeal denied, __N.Y.2d __ (November 2002). TheFund administratively dismissed as an ineligible fee disputethe claim seeking reimbursement of legal fees paid for crim-inal defense. The Court dismissed the Article 78 petitionand held that the Fund’s determination “had a rational basis,and was not arbitrary, capricious or made in violation oflawful procedure.”

Matter of Saferstein, No. 933/01 (Sup. Ct., Albany Co.,2001), aff’d 298 A.D.2d 726 (3d Dep’t 2002), leave to appealdenied, __N.Y.2d __(January 2003). The Trustees deter-mined that the claimant’s loss did not qualify for reimburse-ment since it appeared to result from a failed business loan,not dishonest conduct constituting a misappropriation of lawclient funds. The Article 78 Petition was dismissed asuntimely. The Appellate Division, Third Department, affirmedholding that the judicial challenge was time barred, and thatthe Fund’s determination was final and the statutory periodfor an Article 78 began to run on the date that the claimantsigned for and received the Fund’s letter stating that thedenial of the claim was final.

Appendix(22 NYCRR 7200, et seq.)7200.1 Purpose of fund. The purpose of the Lawyers’Fund for Client Protection is to promote public confi-dence in the administration of justice and the integrityof the legal profession by reimbursing losses causedby the dishonest conduct of attorneys admitted andlicensed to practice law in the courts of New York State.7200.2 Organization. (a) The fund shall be administeredby a board of trustees appointed by the Court ofAppeals of the State of New York.

(b) The board of trustees shall consist of sevenmembers. Of the trustees first appointed, three shallbe appointed for terms of three years, two for a termof two years, and two for a term of one year. As eachterm expires, each new appointment shall be for aterm of three years. (c) The trustees shall serve without compensation,but shall be entitled to receive their actual and nec-essary expenses incurred in the discharge of theirduties.(d) The trustees shall from time to time elect fromtheir membership a chairman, vice-chairman, treas-urer and such additional officers as they deem nec-essary or appropriate.(e) The trustees shall retain an executive director toserve as the chief administrative officer of the fund.

7200.3 Meetings. (a) The trustees shall meet at leastfour times each year at such locations, or in such man-ner, as the chairman shall designate. Special meetingsmay be called by the chairman, and shall be called bythe chairman upon the request of at least two trustees.Special meetings may be conducted by telephone con-ference. The chairman shall provide reasonable noticeof all meetings.

(b) Four trustees shall constitute a quorum. A majori-ty of the trustees present at any meeting of the boardmay exercise any power held by the trustees, exceptas otherwise provided in this Part.

7200.4 Powers of trustees. In the exercise of theauthority granted the trustees, the trustees have thepower to:

(a) receive, hold, manage and distribute 50 per cen-tum of the monies collected pursuant to the provi-sions of section 468-a of the Judiciary Law andsuch other monies as may be credited or otherwisetransferred from any other fund or source, pursuantto law, including voluntary contributions togetherwith any interest accrued thereon. All deposits ofsuch revenues not otherwise required for the pay-ment of claims shall be secured and invested asrequired by the provisions of section 97-t of theState Finance Law;(b) adopt regulations for the administration of thefund and procedures for the presentation, determi-nation and payment of claims, including the estab-lishment of a maximum limitation for awards toclaimants;(c) investigate claims for reimbursement of lossesas the trustees deem appropriate using staff andother available resources;(d) coordinate and cooperate with the AppellateDivisions of the Supreme Court in the investigationof claims;(e) examine witnesses and, in accordance with the

Provisions of the Civil Practice Law and Rules andthe regulations of the trustees, administer oaths oraffirmations and issue subpoenas;(f) hold such hearings as the trustees deem appro-priate;(g) determine, in the trustees’ sole discretion, themerits of claims presented for reimbursement, theamount of reimbursement to be awarded, the termsunder which reimbursement shall be made and theorder of payment;(h) prosecute claims for restitution to which thefund may be entitled;(i) engage in studies and programs for client pro-tection and prevention of dishonest conduct in thepractice of law;(j) employ and at pleasure remove employees, legalcounsel, agents and consultants, and fix their com-pensation within the amounts made available there-for;(k) furnish the Court of Appeals with such reportsand audits as the court may require; and(l) perform all other acts necessary or proper for thefulfillment of the purposes of the fund and its effec-tive administration.

7200.5 Duties of officers.(a) The chairman shall presideat all meetings of the trustees, generally supervise theadministration of the fund, and exercise such otherfunctions and duties that the trustees may assign or del-egate, or that are customary to the office of chairman.

(b) The vice-chairman shall assume the duties ofchairman in the absence or disability of the chair-man.(c) The treasurer shall maintain the financialrecords of the fund and, jointly with the chairman,certify vouchers of the fund that authorize the StateComptroller to make payments to claimants.(d) The executive director shall assist the trustees,supervise the implementation of regulations andpolicies of the trustees, coordinate the investigationof claims and prepare reports thereon, supervisestaff, serve as secretary at meetings, and fulfill suchother duties as may be assigned or delegated by thechairman or the trustees.

7200.6 Conflict of interest. A trustee with a past orpresent relationship with a claimant or the attorneywhose alleged conduct is the subject of the claim shalldisclose such a relationship to the trustees and, if thetrustees deem appropriate, that the trustee shall notparticipate in any proceeding relating to such claim.7200.7 Reports (a) On or before the first day of Aprileach year, the trustees shall prepare an annual report ofthe activities and operations of the fund during the pre-ceding year. The report shall be transmitted to the Courtof Appeals, the Governor, the Legislature and the StateComptroller.

(b) The trustees may also issue periodic reports tothe public concerning the activities and proceduresof the fund.

7200.8 Eligible claims. (a) The trustees shall considerclaims for reimbursement of losses caused by the dis-honest conduct of attorneys admitted to practice in NewYork State, provided that:

(1) the dishonest conduct alleged in the claim con-stituted the wrongful taking of money, securities orother property belonging to a law client or other

Trustees’ Regulations


25

Trustees’ Regulationsperson who entrusted it with an attorney admit-ted to the practice of law in New York State;(2) the dishonest conduct occurred in the prac-tice of law by an attorney admitted to practicelaw in New York State; (3) the claim is made directly by the client orother person, or their representative; (4) the loss occurred or was discovered on orafter June 1, 1981; and(5) unless the trustees decide otherwise, theattorney has been suspended or removed frompractice, is dead, or the attorney’s whereaboutscannot be determined.

(b) The claimant shall have the responsibilityto provide satisfactory evidence of an eligibleloss.(c) For the purposes of this section, “dishon-est conduct” shall include the misappropria-tion or wilful misapplication of money, securi-ties or property in the practice of law, andunlawful acts in the nature of theft, larceny,embezzlement, fraud or conversion.(d) Losses not eligible for reimbursementinclude damages resulting from an attorney’snegligence, malpractice or neglect; lossesincurred by government agencies; lossesincurred by financial institutions; lossesincurred by business organizations havingtwenty or more employees; and losses arisingfrom financial transactions with attorneys thatdo not occur within an attorney-client rela-tionship and the practice of law.(e) (1) In a loss resulting from an attorney’srefusal or failure to refund an unearned legalfee as required by the Lawyer’s Code ofProfessional Responsibility, “dishonest con-duct” shall include an attorney’s misrepresen-tation, or false promise, to provide legal serv-ices to a law client in exchange for theadvance payment of a legal fee.

(2) An attorney’s failure to perform or complete alegal engagement shall not constitute, in itself,evidence of misrepresentation, false promise ordishonest conduct. (3) Reimbursement of a legal fee may be allowedonly if: (i) the attorney provided no legal servic-es to the client in the engagement; or (ii) thelegal services that the attorney actually providedwere, in the trustees’ judgment, minimal orinsignificant; or (iii) the claim is supported by adetermination of a court, a fee conciliationbureau, or an accounting acceptable to thetrustees that establishes that the client is owed arefund of a legal fee. No award reimbursing alegal fee shall exceed the actual fee that theclient paid the attorney. (4) In the event that a client is provided equiva-lent legal services by another attorney withoutcost to the client, the legal fee paid to the prede-cessor attorney will not be eligible for reim-bursement, except in extraordinary circum-stances.

7200.9 Filing claims. (a) Claims for reimbursementfrom the fund shall be written and verified. The fundshall provide an official claim form which shallrequire the following information: the name and

address of the claimant; the name and last-knownaddress of the attorney who is alleged to have commit-ted a dishonest act; the terms of the attorney’s profes-sional engagement for the claimant; the amount of theloss incurred; the date of the loss or the period of timewhen the loss occurred; the place and manner in whichthe loss occurred; the date and manner in which theclaimant discovered the loss; a description of whatsteps the claimant has taken to recover the loss fromthe attorney or any other source; and whether there areother sources, such as insurance, fidelity bonds orsurety agreements, to reimburse the claimant’s loss.The trustees may require a claimant to submit addition-al information that may be necessary to determine aclaim.

(b) The fund shall promptly acknowledge receipt ofthe claim, which shall be assigned a claim number.(c) A claim shall be filed with the fund within twoyears after the following dates, whichever is later:

(1) the date when the alleged dishonest conductoccurred; or(2) the date when such dishonest conduct wasfirst discovered.

(d) The trustees, in their discretion, may permit thelate filing of claims upon a showing that compli-ance with the time limitations of this section maycause undue hardship or result in an injustice.(e) In the discretion of the trustees, a claim shall bedeemed filed when any writing specifying the claimis received by the fund, a bar association, an attor-ney grievance committee, or a police or other gov-ernment agency.

7200.10 Processing claims. (a) Whenever it appearsthat a claim is not eligible for reimbursement pursuantto these regulations, the claimant shall be advised ofthe reasons why the claim is not eligible for reimburse-ment, and that unless additional facts to support eligi-bility are submitted to the fund within 30 days, theclaim shall be dismissed.

(b) All claims that are eligible for reimbursementfrom the fund shall be investigated in such manneras the trustees deem appropriate. The trustees shallbe furnished a written report of each investigation.(c) The appropriate Appellate Division of theSupreme Court shall be requested to assist thetrustees, to the extent the court deems appropriate,in the investigation of claims for reimbursementfrom the fund.(d) A certified copy of an order disciplining anattorney for the same act of conduct alleged in aclaim, or a final judgment imposing civil or crimi-nal liability therefor, shall, for the purpose of theseregulations, be evidence that the attorney commit-ted such act.(e) Upon receipt of the investigation report, thetrustees shall determine whether to conduct addi-tional investigation. If the attorney whose allegedconduct gave rise to the claim has not been previ-ously notified of the claim, a copy shall be providedthe attorney. The attorney shall be invited to respondto the claim within 20 days.(f) The trustees may request that testimony bepresented to complete the record. Upon request,the claimant and the attorney, or their respectiverepresentatives, shall be given an opportunity tobe heard.

(g) The trustees shall determine, in their sole dis-cretion, whether a claim merits reimbursement fromthe fund and the amount, time, manner of its pay-ment and the conditions upon which payment shallbe made. The award of a claim shall require theaffirmative vote of at least four trustees.(h) Unless the trustees direct otherwise, no claimshall be awarded during the pendency of a discipli-nary proceeding involving the same act of conductthat is alleged in the claim.(i) In the exercise of their discretion in determiningclaims, the trustees shall consider, together withsuch other factors as they deem appropriate:

(1) the amount of money available and likely tobecome available to the fund for the payment ofclaims, and the size and number of claims thathave been or are likely to be presented; (2) the amount of the claimant’s loss as com-pared with the amount of losses sustained byother claimants who may merit reimbursementfrom the fund; (3) the degree of hardship suffered by theclaimant as a result of the loss; (4) any conduct of the claimant that contributedto the loss; and(5) the existence of other sources to reimbursethe claimant’s loss, such as insurance, fidelitybonds or surety agreements.

(j) Written notice of the trustees’ determination shallbe provided the claimant and the attorney whosealleged conduct gave rise to the claim, or their rep-resentatives.

7200.11 Reconsideration of claims. A claimant who isdenied reimbursement in whole or in part may requestthat the trustees reconsider the claim by filing anapplication with the fund no later than 30 days follow-ing receipt of the trustees’ determination. If a claimantfails to request reconsideration, or the original deter-mination of the trustees is confirmed, the trustees’determination shall be final.7200.12 Legal right to payment from fund. No personor organization shall have any legal right to paymentfrom the fund as a claimant, third-party beneficiary orotherwise.7200.13 Payment of awards. (a) Claimants shall bereimbursed for losses in amounts to be determined bythe trustees. No award shall exceed $300,000.

(b) Awards shall not include interest. Attorneys’fees and other incidental and out-of-pocketexpenses shall not be reimbursed by the fund.Additional taxes, interest, late charges and similarpenalties finally incurred by a claimant as the directresult of an attorney’s misappropriation may be eli-gible for reimbursement in the discretion of thetrustees. The investigation report in a claim whichinvolves such an element of loss shall contain anestimate of the amount of such loss and a recom-mendation whether the loss merits reimbursementfrom the fund. Unless the trustees determine other-wise, payment thereof may be processed as a sup-plemental award of reimbursement without furtheraction by the trustees, provided the claimant pro-vides proof of loss within six months following thetrustees’ approval of the underlying claim. Theexecutive director shall report quarterly to the


26

Trustees’ Regulationstrustees on the payment of all supplemental awardsduring the preceding quarter.

(c) No claim for reimbursement shall be paid untilthe claimant transfers to the fund, in such form asthe trustees shall authorize, the claimant’s rightsagainst the attorney whose dishonest conductcaused the claimant’s loss and any other person orentity who may be liable for the claimant’s loss.

(d) Payment of claims shall be made in suchamounts and at such times as the trustees deemappropriate and may be paid in lump-sum orinstallment amounts.

(e) If a claimant is a minor or an incompetent, theaward may be paid to a parent, guardian, committeeor the attorney of the claimant, on the behalf of andfor the benefit of the claimant.

(f) All payments of awards of reimbursement fromthe fund shall be made by the State Comptrolleron vouchers certified by the chairman and thetreasurer.

7200.14 Representation by counsel. (a) A claimantand the attorney whose alleged conduct resulted in theclaim shall have the right to be represented by anattorney.

(b) In accordance with the rules of the AppellateDivisions of the Supreme Court, no attorney whoassists a claimant process a claim with the fundshall charge or accept compensation for those serv-ices, without the prior written approval of thetrustees. No fee applications by attorneys, includingpublic officers and court-appointed fiduciaries, shallbe approved by the trustees absent a showing ofextraordinary circumstances.

7200.15 Confidentiality. (a) Except as otherwise provid-ed, all claims and proceedings and the records relatingthereto shall be sealed and confidential.

(b) All information provided by an AppellateDivision of the Supreme Court shall remain sealedand confidential to the extent required by section 90of the Judiciary Law.

(c) The trustees’ final determination awardingreimbursement of a claim, and the facts relating tothe claimant’s loss, shall be a public record.

(d) An attorney whose alleged conduct gave rise tothe claim may waive confidentiality.

(e) This section shall not be construed to denyaccess to information by the Court of Appeals, andAppellate Division of the Supreme Court, or to anycourt of competent jurisdiction in a judicial reviewproceeding.

7200.16 Amendment of regulations. New regulationsmay be adopted, and any regulation may be amendedor repealed by the trustees at any regular or specialmeeting, provided that notice of the proposed adoption,amendment or repeal has been given to all trustees atleast seven days before the meeting. New regulations,amendments and repeals shall be published in theState Register. Copies of all regulations shall be madeavailable to the public at all offices of the fund.

7200.17 Construction of regulations. These regula-tions shall be liberally construed to accomplish theobjectives of the fund and the policies of the trustees.

Lawyers’ Fund Publications

Know Your Escrow Rights (1995), aplain-English guide to the law ofescrow. This consumer pamphlet

was prompted by the fact that nearly 30percent of all client lossesinvolve lawyers’ misuse ofescrow funds.Know YourEscrowRights hasbeen widelydistributed indownstatecounties whereescrow lossesoccur mostfrequently. As ahelp to the bar,the Trusteespublished a companion pamphlet, KnowYour Escrow Rights: The Lawyers’Edition (1995), with citations to relevantcases, statutes and administrativeregulations. Complimentary copies areprovided, in bulk, to all bar associationsand law schools in New York.

Attorney Trust Accounts: The Video(1996). Produced with the New York StateBar Association. A 15-minute video thatfocuses on courtrules andaccounting stan-dards that governthe fiduciary obli-gations of lawyersto maintainescrow and clienttrust accounts, IOLA bank accounts andlaw office record systems.

What’s A Power of Attorney? Answersfor New Yorkers (1996) Produced withthe Government Law Center of theAlbany Law School of UnionUniversity. A 12-page guide, inplain English and question andanswer format, that addressesbasic principles of law, fiduci-ary conduct and importantchanges in New York statutesthat took effect on January 1,1997. The pamphlet has beenwidely distributed to the sen-ior citizen community,including 100,000 copies

sponsored by the New York StateDepartment of Law.

Avoiding Grief With A Lawyer — APractical Guide (1998). This consumerbrochure identifies possible sources ofdispute in an attorney-client relationship,warning signs of troubles and problems,and ways to avoid and deal with them.The pamphlet has been distributed to barassociations, consumer protection agen-cies, legislative offices, and New YorkState public libraries. A special version ofthis consumer brochure was prepared forthe Attorney General’s Office and the NewYork State Unified Court System.

Appendix of CLE Materials (1999). NewYork’s Mandatory Continuing LegalEducation program requires that membersof the bar acquaint themselves with thefiduciary and record-keeping obligations

of lawyers when they are entrust-ed with money and propertybelonging to clients and escrowbeneficiaries. To assist bar asso-ciations and educational institu-tions develop CLE seminars inthis area of practice, the Lawyers’

Fund published this 70-page compendi-um of applicable statutes, court rules,ethics opinions of bar associations, andpractical advice for lawyers and law firms.


27

Name JD Awards Amount Name JD Awards Amount

Lawyers Involved in Awards Since 1982

Edward P. Abbott 6 1 $10,624James E. Adel 8 3 $18,656Mark I. Adelman 1 1 $2,150Howard B. Adler 1 6 $903,948Cornelius M. Ahearn, Jr. 1 1 $65,712George E. Albright 7 1 $2,150Alexis Alcide 11 1 $7,200David B. Alford 3 4 $8,150Donald A. Alleva, Jr. 9 3 $4,938Nicholas P. Altomerianos 1 1 $13,425David W. Alvey 2 10 $490,852Joseph Amaru 11 2 $208,529Robert B. Anderson 1 1 $100,000Thomas A. Andrews 1 1 $300,000Alvin Ashley 1 1 $71,445Jason Ashley 11 10 $97,885Lewis G.P. Ashton 11 2 $9,000Harley D. Axelrod 7 5 $107,128David A. Baker 5 10 $61,627William F. Baker 5 2 $28,556Richard L.Baltimore, Jr. 1 5 $42,096Norwood K. Banks 7 1 $573John M. Barth 1 1 $3,000Paul L. Beck 1 7 $105,700Irving Becker 1 10 $16,330Herbert H. Bell 1 1 $40William F. Benca 8 2 $57,950Howard Benick 1 2 $1,320Michael D. Benjamin 2 1 $900Bradley C. Bennett 7 2 $7,554Robert J. Bennison 5 1 $15,815Richard H. Berg 9 2 $2,000Adam H. Bernstein 7 3 $40,339Harry J. Bernstein 11 16 $216,742Peter N. Bertucci 1 1 $25,000Burton H. Besen 1 9 $146,616Jeffrey L. Besse 3 32 $1,430,278Lassale Best, Jr. 2 1 $1,000Jose M. Betancourt 12 2 $21,961James Bing 1 3 $4,085Charles Birnbaum 2 1 $594Warren J. Black 1 1 $20,576Walter H. Blaich, Jr. 9 7 $385,835Blaich & Dries 9 7 $236,162Lawrence Bluth 11 1 $11,500Allen J. Bodner 1 1 $100,000Howard J. Bodner 10 20 $968,658Murray Bogatin 1 2 $9,400Philip L. Boneta 2 3 $19,533Anthony J. Bonfiglio 1 3 $114,000Martin Borakove 1 2 $16,101Lee H. Bostic 11 4 $31,583

Darrell L. Bowen 4 1 $300Martin J. E. Bowers 10 1 $12,750Jonathan N. Boxer 10 12 $61,364Raymond D. Bradford 9 2 $20,779Karen E. Bragg 10 1 $250E. Lawrence Brass 10 14 $339,657Leo Bresler 10 2 $100,000John D. Bridge 8 1 $1,000Richard Brill 9 1 $15,680Trevor L. Brooks 1 1 $21,021Harold Brotman 10 1 $6,667Bradford J. Brown 1 1 $36,000Kenneth E. Bruce 9 1 $800Stephen Brusch 1 1 $1,500Alan I. Brutten 11 1 $500Joseph T. Burchill 6 1 $25,000John R. Burgess 8 6 $30,868Timothy K. Burgess 7 2 $9,118W. Michael Burke 3 2 $700William M. Burke 3 2 $101,035Jeffrey S. Burns 10 3 $12,370Gail D. Butler 1 2 $55,650Nicholas Capobianco 7 4 $6,530Russell J. Carbone 11 2 $19,000William J. Carrigan, Jr. 5 3 $85,342John M. Cassel 3 1 $65,000Stuart B. Cassell 11 35 $486,387Frank V. Cassese 2 22 $286,191Richard H. Cataldi 8 3 $71,810Vincent J. Catalfo 1 1 $45,000Katherine R. Catanzarite 4 19 $60,843Harvey Chaly 10 4 $42,944John R. Chaney, Jr. 1 3 $2,276John P. Charles 11 1 $2,500Michael M. Chasen 12 6 $38,708John D. Chestara 3 17 $146,832John M. Cholakis 3 1 $52,383James Ciccone 2 1 $1,500Robert A. Cicola 10 11 $258,396Frank A. Cissi 5 2 $4,996John D. Clark 8 1 $750Robert J. Clark 2 5 $121,990A. Roger Clarke 7 5 $193,183James F. Clarke 10 19 $1,145,491W. Andrew Clawson 7 19 $305,715Casey A. Clines 4 1 $350Joseph A. Cofino 12 2 $3,500Daniel I. Cohen 1 4 $81,720James Harrison Cohen 1 5 $57,055Kenneth H. Cohn 6 9 $4,010Kenneth W. Cohn 10 1 $16,077Theresa N. Coletti 11 25 $53,317


28



Joseph L. Colp 1 3 $12,300Frank Coniglio 10 12 $240,110Kevin A. Conine 6 2 $40,861Joseph A. Contino 8 2 $200,000Stephen E. Cooper 4 2 $268,455Edward M. Cooperman 10 3 $12,700Kevin P. Corcoran 9 2 $16,965William J. Corcoran 1 1 $10,000Gerald M. Cotter 10 28 $990,471James P. Cotter 8 1 $46,036Catherine N. Coughlin 8 3 $7,002Coxeter & Coxeter 3 1 $50,000Ronald P. Crean 1 2 $22,750Gene Crescenzi 1 2 $6,880Domenick Crispino 1 16 $731,564John T. Crone 7 13 $450,427Dennis D. Crowley 9 6 $271,804Marshall Oakes Crowley, Jr. 10 2 $44,859Martin J. Crowley 10 13 $108,424Thomas P. Cullen, Jr. 11 4 $93,513David A. Curtin 8 12 $43,388John L. Curtis 8 4 $252,344R. Scott Daly 2 2 $11,600Benjamin F.L. Darden 6 2 $67,088W. Timothy Darrah 10 3 $300,136Thomas P. Daubner 11 1 $500Kenneth P. Daumen, Sr. 8 1 $3,211Mehran W. Davidian 10 1 $5,000James J. Davitt 2 1 $100,000Mark D. Deinhart 8 5 $592,734Lawrence DeMayo 2 20 $217,422John L. Desmond 3 1 $56,000Bertram S. Devorsetz 9 2 $1,100James G. deWindt 10 2 $1,000Steven H. Dickman 10 7 $59,339Edward W. Dietrich 5 1 $36,598Salvatore DiMisa 10 2 $55,533Vincent R. DiPasquale 8 6 $262,277Robert E. Dizak 1 19 $170,293Birol John Dogan 1 6 $43,673Jerrold A. Domingo 1 3 $19,000Myron Domsky 10 3 $3,500Paul B. Donohue 9 1 $750Michael J. Donovan 1 1 $27,531Walter M. Donovan 8 23 $75,050H. Paul Doucette, J r. 7 9 $16,200George E. Dougherty, Jr. 3 6 $140,388William J. Dougherty 10 5 $124,795Frank J. Doupona 9 10 $602,595Charles H. Downing 1 2 $6,362James L. Dowsey, III 10 1 $8,500

Paul Drager 9 1 $500Arthur S. Drotzer 9 2 $5,255Robert G. Dubrow 10 1 $28,428Melvin G. Duke 2 1 $1,500Peter J. Dunne 10 13 $68,950Thomas A. Dussault 3 184 $329,956Roger L. Dworsky 4 6 $4,200Saul L. Eagle 12 4 $290,404Paul W. Eckelman 9 3 $8,895Eugene P. Edwinn 1 3 $107,770Louis A. Egnasko 2 66 $1,921,450Ehman & Marino 10 61 $3,061,535Howard Eisenberg 1 1 $5,000Robert A. Eisenberg 2 1 $7,058Mitchell Eisenstat 1 2 $3,675Dennis P. Elkin 11 1 $250Robert S. Elkins 10 3 $101,450W. Joseph Embser 8 1 $100,000Charles E. Ennis 7 3 $52,427Michael L. Entes 2 2 $10,000Michael F. Erdheim 1 20 $993,099Steven M. Erdheim 9 23 $12,840Jonathan Erickson 7 6 $111,173Jerome J. Erlin 1 4 $42,595John R. Esposito 12 1 $5,700Gene Ira Esser 2 12 $23,877F. Birt Evans, Jr. 4 12 $28,022James C. Farrington 3 1 $15,560Arnold H. Fassler 11 12 $111,658James H. Fay 2 1 $400Charles L. Feely 1 3 $256,906Milton Feinman 1 9 $520,987Harvey Felton 9 1 $40,426John F. Felton 1 2 $7,000Willie R. Felton 7 29 $134,491Perry V. Ferrara 10 58 $1,645,861Steven B. Fidelman 11 9 $78,532Carl M. Field 10 24 $173,904

Timothy A. Fischer 8 1 $155Fischer & Quaintance 8 2 $110,897Michael G. Flanagan 1 13 $884,137Florien Carl Flierl 8 8 $65,695Dan Foley 9 1 $203Joseph M. Fonte 2 2 $12,500Seymour Forman 1 1 $500Harry A. Foster 1 3 $40,092Robert L. Fraser 7 4 $16,846Paul I. Freedman 1 49 $117,305Andrew J. French 10 1 $9,619Mark G. Fresco 1 5 $61,961


29



Sydney Friedler 10 27 $365,711Arthur S. Friedman 2 1 $12,916Martin Fries 11 17 $81,713Alfred L. Fritz, III 8 21 $86,766Daniel R. Fruitbine 1 1 $8,750Jerome H. Funk 9 22 $12,049Henry G. Fury 9 9 $150,341Dumas Gabbriellini 1 1 $4,950Wayne K. Gabel 9 1 $11,437Ross M. Gadye 1 1 $2,360Yoram Gafni 1 5 $7,550Arthur J. Gallancy 1 1 $21,500John E. Galligan, Jr. 2 3 $4,827William M. Gallow, Jr. 3 1 $49,397Frank P. Gangemi 2 20 $1,357,345Hiram S. Gans 9 2 $85,000Francis P. Garofalo 2 3 $64,000Edward M. Gasperi 4 5 $8,231Michael S. Gawel 8 1 $1,200Jack O. Gaylord 8 1 $12,332Aaron Gelbwaks 1 1 $229,553James G. Gembarosky 8 7 $15,426Frank P. Giaramita 2 2 $7,500Anne O. Gilde 2 1 $1,045Thomas Eric Gill 10 6 $87,500James Gilmartin 1 2 $3,613Joseph A. Giorgi 7 1 $4,685Jarrett F. Glantz 1 25 $1,789,786Harold L. Goerlich 10 4 $65,178Roger J. Gofton 9 2 $182,800Fred Gold 11 3 $113,250Henry S. Goldman 9 9 $224,823Barry E. Goldrod 1 1 $51,357Charles H. Goldstein 10 1 $43,000Alan R. Golkin 8 5 $269,624Oscar Gonzales-Suarez 1 1 $5,000Michael W. Goodman 11 4 $220,055Robert M. Gordon 1 6 $29,870John P. Gorman 9 2 $36,000Jack Gottlieb 2 8 $74,576Lora C. Graham 9 2 $1,655Barry J. Grandeau 9 377 $564,211S. Simpson Gray 9 9 $8,928Christopher J. Green 1 1 $30,000Milan K. Gregory 10 2 $10,200John N. Griggs, Jr. 1 2 $350Robert S. Groban, Sr. 1 2 $8,500Joshua Gross 4 1 $400Murray S. Gross 2 1 $8,000David B. Grossman 5 6 $15,158Marc E. Grossman 9 16 $192,501

Harold W. Grubart 1 3 $184,335James R. Gunderman 8 8 $269,978Sidney J. Guran 2 1 $12,159John A. Gussow 2 30 $522,568John A. Guzzetta 1 1 $6,395Richard A. Gwynn, Jr. 5 8 $8,239Richard J. Haas 3 3 $16,800Paul E. Haberman 1 1 $300,000David S. Haberman 10 1 $27,798Robert E. Haley 1 7 $100,800Clifton E. Hall 11 3 $16,465Harold A. Hall 2 1 $13,300Fred J. Halsey, Jr. 1 3 $69,803Herbert I. Handman 1 1 $16,500H. Roger Hantman 10 1 $3,000John L. Hargrave. Sr. 8 3 $44,051Alan David Harris 10 5 $342,033Alan Jay Harris 1 1 $14,081H. Hawthorne Harris 9 1 $5,093Herbert Harris, Jr. 1 2 $48,833Leon Sol Harris 1 3 $30,060Peter Andrew Harris 7 8 $224,475Morton H. Hartmann 1 3 $54,576Robert T. Hartmann 9 3 $42,149John J. Hayden 9 5 $25,800Richard T. Heelan 10 3 $6,075Alan A. Herman 1 1 $65,000Eric E. Heron, Jr. 11 3 $28,485Alfred L. Hetzelt, Jr. 8 1 $100,000John Higginbotham 1 2 $5,000Leo N. Hirsh 1 2 $27,083Michael Hirsch 10 2 $53,127Ralph Hochstein 1 1 $1,000Robert I. Hodes 1 2 $20,605Walter Hofer 1 8 $85,880Frank Hoffey 1 1 $4,500Douglas R. Hoffmann 10 7 $62,125William J. Holden 9 12 $436,677A. Robert Holman, III 10 458 $203,958Antoinette Holmes 12 19 $664,171Harold Holtman 10 25 $319,446Robert Kent Holtsberry 5 1 $2,178Charles S. Horgan 1 1 $2,500Valentine N. Horoshko 1 2 $15,000Donald G. Houghton 7 3 $75,000Richard A. Howard 9 3 $2,575Ralph F. Howe 8 1 $7,313Edward L. Howlette 10 1 $3,700Raymond K. Hsu 1 6 $24,850Rick T. Hubbard 10 5 $25,650John A. Huber 10 4 $30,500


30



Thomas P. Hughes 4 2 $10,914Elissa L. Insler 12 1 $21,551William C. Israel 1 4 $54,863Hesper A. Jackson, Jr. 2 6 $167,995Saul Jakubowitz 1 6 $24,718Robert E. Johnson 2 1 $38,000Robert P. Johnson 8 1 $4,200Wayne A. Johnson 6 4 $28,566D. Sanford Jorgensen 1 4 $55,283Leonard Kabat 10 1 $5,000Gerald A. Kagan 1 2 $1,600William H. Kain 10 15 $145,722Gerald Kaiser 1 34 $36,365James D. Kakoullis 1 1 $1,000John C. Kanaley 5 3 $55,000Julian Kaplan 10 1 $46,167Stanton Karnbad 9 3 $38,500Morris M. Karp 1 2 $5,618Kastein & Kastein 10 4 $379,430Thomas Katsaros 2 3 $84,500Harold W. Katz 4 3 $57,000Howard C. Katz 9 61 $304,445Peter L. Katz 9 8 $8,690Reuben A. Katz 1 1 $93,072Steven C. Kavanaugh 10 3 $6,041William S. Kaye 1 1 $5,000Paul E. Keith 2 3 $23,843Donald E. Kelly 1 2 $85,656Lawrence V. Kelly 1 1 $65,975Robert E. Kelly 7 20 $12,070Deborah R. Kenneally 3 2 $3,250Bernard Kenny 1 8 $138,269John P. Kilminster 10 6 $17,950John J. Kim 1 1 $19,500Wayne W. Kim 1 5 $31,705Matthew A. King 4 3 $3,000Harold L. King 1 1 $600Paul H. Kirwin 10 1 $58,000Rudolph M. Klenosky 2 1 $45,000A. O'Neill Kline 8 3 $72,100William J. Kluender 11 18 $232,257Kenneth Knigin 9 1 $117,069David C. Kobrin 9 1 $20,148Roger W. Kohn 9 1 $255Richard Kops 10 10 $536,457Timothy Kozyra 8 2 $8,231Howard Krantz 1 1 $23,500Harvey H. Krat 1 3 $68,525M. Thomas Kuriakose 9 1 $500Irving Kurtz 1 5 $154,842Larry J. Kushner 1 2 $21,678

A. James LaBue 7 6 $298,928Michael S. LaBush 9 2 $3,250Jefferson T. Lalik 7 8 $3,805LaLoggia & Gorankoff 7 20 $738,744Bernard H. LaLone, Jr. 3 1 $22,210Robert A. Lamar 10 20 $597,507Donald F. Lamutis 7 3 $8,325Erick F. Larsen 10 1 $23,517George E. Lasch 10 1 $1,500Eric N. Lazarus 10 28 $583,407John Q. LeCain 4 1 $25,000Thomas P. Leckinger 7 7 $87,180Gerald J. Leibowitz 10 8 $229,992Lawrence B. Lennon 4 4 $87,665Marc R. Leventhal 1 1 $35,000Richard L. Levine 5 1 $10,000Murray F. Lewis 6 1 $3,589Jay Robert Lichtman 2 2 $3,200Lawrence Lieberman 2 4 $35,536Kenneth Linn 1 1 $25,850Michael S. Linn 9 14 $418,858Clifford N. Lipscomb 11 8 $11,480William F. Lisnerski 8 1 $600David W. Little 4 8 $343,892Vincent J. LoCurto 10 1 $9,797Werner Lomker 7 2 $38,564John C. Lopes 10 2 $2,550John G. LoPresto 11 1 $299,894Samuel Lorenzo 1 92 $43,125Ronald B. Losner 2 16 $41,694Harold E. Lovette 1 1 $27,500David B. Lubash 11 39 $471,203Jonathan W. Lubell 1 2 $9,450Thomas J. Lukas 11 1 $28,000Joseph F. Lynch 6 1 $3,736Thomas N. Lyons 10 2 $2,640Robert A. Mackasek 1 20 $370,043Robert D. MacLachlan, Jr. 10 8 $11,250Fortune S. Macri 9 1 $25,000Lee M. Mager 12 1 $45,480Anthony M. Magnotti 2 10 $94,731John R. Maguire 10 1 $1,000Jenny M. Maiolo. 11 27 $555,808Michael M. Maloney 1 1 $42,040Frank M. Manfredi 10 5 $27,076Lloyd J. Manning 11 1 $500Robert Y. Manske 7 1 $12,066Marion S. Marable 11 2 $7,400Richard P. Maracina 1 8 $20,205Marvin Margolis 1 1 $40,000Samuel A. Marino 8 1 $1,500


31



Irving Markowitz 1 7 $261,328George T. Martin 6 1 $500Nancy A. Maruk 7 3 $3,370C. Vernon Mason 1 5 $32,600William J. Mastine, Jr. 5 2 $17,220Charles M. Mattingly, Jr. 10 3 $132,500Martin J. Mayblum 11 3 $13,750Philip A. McBride 8 1 $5,958Teague W. McCarthy 10 11 $398,537Shannon D. McClam 11 3 $14,000Denis J. McClure 9 2 $5,155James F. McCoole 9 15 $865,522Sharyn L. McDonald 7 3 $73,992James J. McEnroe 1 6 $3,000Lloyd A. McFarlane 11 1 $5,000Thomas J. McGinn 3 1 $180,000Dennis J. McLaughlin 1 5 $46,804Richard M. McMahon 9 2 $8,973John J. McManus, Jr. 2 2 $200,000Joseph T. McMaster 2 4 $168,093Dominic M. Mello 2 2 $8,167Richard M. Messina 1 3 $169,049William A. Metz 9 3 $115,497Stanley M. Meyer 10 1 $1,830James J. Michalek 8 21 $181,361Charles O. Milham 3 4 $17,541Alan M. Miller 10 1 $2,319Bruce J. Miller 10 2 $41,858Carl N. Mione 2 3 $830,750Nicholas A. Mina 1 1 $19,500Stephen A. Mishkin 9 55 $1,318,823John E. Modjeska 3 7 $34,356Richard T. Monahan 10 2 $4,500Colin A. Moore 1 4 $6,500Davison F. Moore 9 6 $491,971Paul A. Moore 9 2 $2,146Richard M. Moran 3 21 $349,371Thomas D. Morath 12 2 $14,755Lawrence D. Moringiello 2 5 $171,249Alan D. Morris 10 15 $221,560Charles E. Morrison 1 1 $4,000Saul D. Moshenberg 7 5 $20,749Lawrence J. Mullan 10 1 $395James R. Murdock, Jr. 4 19 $638,152Eugene J. Murphy 8 21 $583,870Morrow D. Mushkin 2 2 $10,200Joseph F. Muto 5 1 $1,100Willard H. Myers, III 7 2 $1,700Eugene V. Natale 10 9 $245,845Nath & Weiss 10 1 $100,000Richard F. Nelson 10 10 $70,361

Pat Frank Nesci 10 11 $359,974Kenneth A. Newman 10 6 $29,054Marvin A. Newman 9 1 $26,924John G. Nicholas 11 2 $57,500Peter B. Nickles 9 2 $122,623Thomas C. Nicotera 3 1 $275Michael B. Nitsberg 10 3 $34,450William J. Noland 1 1 $3,600James M. O’Brien 2 1 $94,266Thomas P. O'Callaghan 9 1 $3,200Charles O'Donnell, Jr. 9 1 $2,000Mark S. Ogden 7 1 $8,869Frank Oliva 11 5 $36,652James M. O’Neill 10 5 $17,500Lynn D. O’Neill 2 3 $20,770Joseph E. Orsini 8 3 $31,887Osserman & Horwitz 1 6 $774,503Sheldon Ostro 1 9 $359,000Roderick E. Owens 1 2 $21,533Victor N. Pacor 9 9 $164,357Rafael M. Pantoja, Jr. 1 18 $168,335John F. Papsidero 8 1 $17,339Mary Murphy Pardoe 10 15 $85,436Richard J. Pariser 8 3 $7,053Alfred J. Parisi 11 15 $438,591E. Paige Parsons 4 1 $200Nicholas J. Pastushan 5 1 $138,500George Patsis 10 2 $115,798Edward S. Patterson 9 2 $15,286George F. Pavarini 9 15 $543,165Robert J. Pellicane 10 7 $174,769Kenneth S. Pelsinger 1 2 $14,349Michael M. Perlman 10 7 $265,331David Ian Pesner 9 11 $136,291Jacob & David Ian Pesner 9 1 $25,000Richard T. Petty 1 3 $90,664Stephen A. Phillips 4 1 $60,000John Piastra 11 2 $200,000Louis N. Picciano 6 2 $5,296Richard Pikna 1 9 $101,278George A. Pins 1 4 $15,779John L. Pitula 1 1 $90,000John B. Poersch 4 2 $114,161J. Stanton Pohl 10 4 $89,779Jonathan Pollack 10 2 $13,762Sam Polur 12 1 $500Edward J. Porcelli 12 4 $21,580Ira Postel 1 3 $38,515Postel and Rosenberg 1 11 $619,722John V. Potter, Jr. 10 1 $98,000Charles M. Powell, Jr. 1 9 $68,700


32



Mary Powers 1 1 $89,857William J. Powers, III 5 7 $14,662Paul D. Powsner 1 3 $210,000Stanley Pressment 1 1 $6,960Cynthia Lynn Price 2 1 $81,623Wayne J. Price 2 17 $359,726Michael Prieto 1 1 $15,215Mark S. Probert 10 6 $2,900Anthony P. Quinn 11 1 $2,912Donna M. Quinn 3 1 $10,000John J. Raia 11 100 $3,268,398Leo Raychuk 2 1 $2,000William C. Raines 1 3 $17,512Steven P. Rapoport 2 2 $23,836Stephen P. Rathjen 10 3 $33,430Edward W. Reckdenwald 10 4 $88,193John D. Reddan 1 1 $2,500Alban J. Reichert 7 1 $3,425Steven Paul Reifman 1 1 $10,000Paul G. Reilly, Jr. 1 2 $39,500Gary M. Reing 12 2 $23,446Herschel L. Reingold 8 1 $4,344Agostinho Dias Reis 1 1 $3,712Erich H. Reisch 2 1 $27,692Willem J. Remmelink 1 3 $127,875James R. Rerisi 10 4 $57,146James A. Resti 5 3 $74,745Luis E. Reyes 2 1 $1,000John Rivera 12 1 $1,707Jose A. Rivera 2 7 $89,166Robert Rivers 10 7 $197,000Stephen R. Roach 9 3 $23,400Edward John Roder 7 15 $168,505George Rodriguez 12 4 $1,865Richard Rodwin 1 3 $552,750Louis Rohrberg 1 1 $5,325Sy L. Rolnick 2 1 $25,500Steven J. Romer 1 14 $1,076,657Bibiano Rosa 1 3 $95,265Alton N.G. Rose 11 1 $5,333Michael G. Rose 10 40 $1,279,588Peter Rose 11 11 $143,309Rose & Karnbad 11 1 $17,000Ruth F. Rosenberg 5 3 $7,100Steven Rosenbluth 2 26 $394,102Richard J. Rosenthal 1 1 $4,374Selig A. Rosenzweig 10 3 $64,569Phillip M. Rossbach 10 1 $659Abraham Rostoker 2 1 $17,500Mitchell A. Rothken 1 38 $2,021,907

Arthur J. Rouse 9 1 $11,435Leonard H. Rubin 1 1 $83,000James M. Russell 3 4 $765,407Glenn L. Rutledge 11 1 $5,000David Sabghir 2 1 $14,000Carol A. Safier 1 5 $117,950Steven L. Salpeter 11 7 $12,019Ronald M. Salzer 1 4 $53,750Roger G. Sam 12 1 $2,500George Sandberg 10 10 $227,146Ira Jay Sands 1 6 $7,917Richard J. Sanna 10 10 $248,285Richard D. Savitsky 1 2 $47,558Michael D. Scavella 4 1 $2,000Stanley D. Scharf 10 16 $89,719Nelson K. Scherer 10 1 $2,348John C. Schettino 10 1 $4,000David Schick 1 7 $549,116Robert L. Schlesinger 3 3 $3,068Peter G. Schmidt 1 3 $400,000Richard C. Schulz 10 1 $24,035Robert Schutrum 8 1 $1,500Melvyn Schwartz 1 2 $459,972Steven M. Schwartz 9 2 $3,500Schwartz & Gutstein 1 6 $250,501Joel E. Schweitzer 8 6 $46,294Joseph F. Scirto, Jr. 8 10 $106,962Harry W. Scott, Jr. 2 1 $200Bernard M. Seeman 10 1 $50,000Jeffrey P. Segal 10 4 $505,524Arthur J. Selkin 9 11 $107,300Bernard L. Seltzer 10 11 $94,609Ralph Serpico 11 3 $176,191Barry R. Shapiro 1 16 $3,065Michael Shapiro 1 1 $58,231Phillip E. Shapiro 1 1 $700Eden Shaw 1 1 $12,500Brian A. Sheridan 1 1 $785John M. Sheridan 7 6 $371,500Richard M. Sherman 10 25 $97,623Robert J. Sherman 10 7 $15,159Alan J. Shimel 10 2 $26,666Robert G. Short 9 1 $800Anis A. Siddiqi 2 4 $75,614Matthew A. Siegel 9 2 $14,147Stephen D. Siegfried 10 17 $961,719Oswald B. Silvera 2 7 $16,125Mark A. Silverman 10 2 $2,169William Sims 8 2 $8,037Barry H. Singer 9 9 $235,034Baljit Singh 1 1 $150


33



Indar Singh 11 16 $156,237Ronald A. Sipos 8 2 $106,730Myron W. Siskin 10 1 $13,436Allan Sloan 1 6 $108,601Joseph D. Sloboda 10 2 $5,458Peter W. Sluys 9 6 $113,856Kendrick C. Smith 1 1 $3,675Ormond N. Smith 2 5 $76,480Benjamin Sneed 1 4 $24,833Jack B. Solerwitz 10 99 $3,008,734Joseph F. Soviero, Jr. 10 1 $5,000Michael T. Spallino 1 2 $8,800Jacob Spatz 3 3 $3,245Jerome L. Spiegelman 1 48 $889,719Jerome Spies 10 2 $126,754Lionel Spring 1 1 $83,311Howard R. Staller 1 1 $8,000Ferne Mayer Steckler 10 3 $10,500Alexander B. Stein 1 2 $31,450Elliot J. Stein 1 74 $762,109Joel B. Steinberg 1 1 $1,400Duane M. Stenstrom, Jr. 8 6 $6,674Jeffrey S. Stern 2 10 $244,077Stanley R. Stern 1 5 $325,676Joseph Sternschein 11 4 $75,715Frederick D. Stevens 8 1 $4,185Wallace Sturm 2 1 $1,500John J. Sullivan 1 1 $29,990Joseph E. Supples 8 3 $9,150Leonard A. Sussman 1 3 $44,438Monroe Sussman 10 1 $46,667Carrie Sutherland 10 2 $7,670Morton S. Swirsky 1 6 $62,610Israel I. Sylvan 1 3 $22,253Regina M. Tate 10 2 $6,750Sergio M. Taub 11 49 $326,401Louis Taubenblatt 2 9 $718,854Sharon Lynch Taureck 2 5 $40,966Peter P. Tavolacci 9 1 $2,400Timothy Taylor 1 1 $19,000Theodore E. Teah 12 1 $13,373Norman Eric Teitler 11 2 $14,414Ron Telford 6 1 $1,100Milton A. Teplin 1 3 $26,000Charles R. Testa 7 2 $2,850Michael B. Thomas 9 1 $600Alan S. Tifford 10 14 $291,016Robert S. Tobin 1 2 $16,320Thomas P. Tobin 10 4 $184,450Joseph A. Tracy 9 4 $131,676

Joseph R. Turner 1 4 $41,572Robert E. Twiste 2 13 $213,179James W. Ulaszewski 8 2 $1,048Girard M. Ursitti 8 5 $76,957Norman Ushkow 2 1 $1,575William C. Vaughan 8 1 $100,000Tom M. Vetrano 2 4 $30,056Lillian R. Villanova 9 3 $109,636Louis V. Viscomi 1 3 $31,500Frank Vitulli 2 1 $12,000Arnold P. Wagner 10 4 $72,900H. Robert Wall 6 46 $912,929Wallman & Wechsler 1 38 $1,779,746Mortimer Warfman 1 34 $16,236Paul J. Warkow 10 1 $1,000Patrick T. Wedlock 5 8 $4,910Richard B. Weil 1 1 $48,737Martin J. Weinstein 2 1 $25,000Myles N. Weintraub 10 7 $123,623Michael S. Weiss 9 3 $2,325Peter R. Weiss 2 1 $15,000C. Theodore Wellington 11 6 $193,815Allen B. Werbalowsky 3 1 $4,250Leslie M. Westreich 1 1 $100,000Benjamin P. Whitaker 7 15 $603,251Marina K.. Whitfield 6 1 $34,776D. William White 2 15 $171,308Aaron G. Windheim 9 1 $11,547Steven Winston 1 1 $9,500Samuel Ulrich Wiseman 1 2 $38,280Steven D. Wisniewski 8 16 $7,805Walter S. Wojcik 3 1 $250Michael T. Wolin 1 1 $25,035Marvin Wolinetz 2 1 $350George Wolynetz 1 3 $244,703William S. Wood 7 4 $49,065John M. Wourgola 10 11 $97,534Adam Morgan Wright 1 1 $500Kathryn B. Wunderlich 3 1 $600Henry E. Wyman 8 33 $496,811Louis B. Youmans 1 1 $5,000Floyd A. Young 8 1 $10,000Nancy J. Young 1 9 $124,809Richard Zelma 1 1 $115,000Frederick J. Ziems 10 2 $105,368Jacob S. Zimmerman 10 27 $355,991Victor P. Zodda 10 2 $282,225Peter S. Zogby 5 1 $1,535H. Michael Zukowski 1 1 $8,000Bertram Zweibon 1 14 $564,282


Claim # _________________

APPLICATION FOR REIMBURSEMENT

Instructions:

Answer every question in this application. If space is inadequate, attach additional pages.

You must provide us with copies of all evidence that proves your loss, such as cancelled checks, receipts, letters, clos-ing statements, etc.

Mail the completed application to: The Lawyers’ Fund for Client Protection, 119 Washington Avenue,Albany, New York 12210.

1. Your Name and Address: �� Mr. �� Mrs. �� Miss �� Ms. Age(s) _____ _____

Name:

Address:

Home Telephone: Social Security or Federal Tax ID #:

Business Telephone: Occupation and Employer:

2. Name, address and telephone number of the attorney who has dishonestly taken your money or property:

________________________________________________________________________________________________________________________________________________________________

3. What legal services did you ask this attorney to perform for you?

________________________________________________________________________________________________________________________________________________________________

4 How much did you pay this attorney? ______________________________________________________________________________________________________

5. Was your agreement with the attorney in writing? Yes______ No______. If Yes, attach a copy of the agreement.

6. Did your loss involve: �� money �� other property? Specify:

7. What was the amount of your loss? ________________________________________________________________________________________________________

8. State the date when your loss occurred: ____________________________________________________________________________________________________

9. When and how did you discover your loss? ______________________________________________________________________________________________


10. Describe the attorney’s dishonest conduct, and provide the name and address of a person who has knowledgeof the loss:________________________________________________________________________________________________________________________________________________________________

________________________________________________________________________________________________________________________________________________________________

11. This loss has been reported to: �� District Attorney �� Attorney Grievance Committee�� Police

Attach a copy of your complaint.

12. Describe what steps you have taken to recover your loss from the dishonest attorney:

________________________________________________________________________________________________________________________________________________________________

13. Can your loss be reimbursed from other source, such as insurance, fidelity bonds or surety agreements?Yes______ No______ Don’t know______. If Yes, describe the source:

________________________________________________________________________________________________________________________________________________________________

14. State other facts that you believe are important to the Fund’s consideration of your claim:

________________________________________________________________________________________________________________________________________________________________

15. How did you learn about the Lawyers’ Fund for Client Protection?

________________________________________________________________________________________________________________________________________________________________

16. Name, address and telephone number of your present attorney:

________________________________________________________________________________________________________________________________________________________________

17. Have you attached copies of receipts, cancelled checks and other documents that prove your loss?Yes ______ No ______. If No, explain why:

________________________________________________________________________________________________________________________________________________________________

• Court Rules do not permit attorneys who help clients process claims with the Fund to charge legal feesfor that service, except with the permission of the Fund’s Board of Trustees.

• Should you receive an award from the Fund, the facts relating to your loss become a public record.

I (We) verify and affirm, under penalty of perjury, that the information provided in this statement of claim is true.

_______________________________________ ____________________________________________________Date Signature of Claimant

___________________________________________________

2/98

Signature of Claimant


Notes


2002 · 2005. 1. 7. · the lawyers’ fund for client protection of the state of new york 119...

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