Parent Advocates
Search All  
The goal of ParentAdvocates.org
is to put tax dollar expenditures and other monies used or spent by our federal, state and/or city governments before your eyes and in your hands.

Through our website, you can learn your rights as a taxpayer and parent as well as to which programs, monies and more you may be entitled...and why you may not be able to exercise these rights.

Mission Statement

Click this button to share this site...


Bookmark and Share












Who We Are »
Betsy Combier

Help Us to Continue to Help Others »
Email: betsy.combier@gmail.com

 
The E-Accountability Foundation announces the

'A for Accountability' Award

to those who are willing to whistleblow unjust, misleading, or false actions and claims of the politico-educational complex in order to bring about educational reform in favor of children of all races, intellectual ability and economic status. They ask questions that need to be asked, such as "where is the money?" and "Why does it have to be this way?" and they never give up. These people have withstood adversity and have held those who seem not to believe in honesty, integrity and compassion accountable for their actions. The winners of our "A" work to expose wrong-doing not for themselves, but for others - total strangers - for the "Greater Good"of the community and, by their actions, exemplify courage and self-less passion. They are parent advocates. We salute you.

Winners of the "A":

Johnnie Mae Allen
David Possner
Dee Alpert
Joan Klingsberg
Harris Lirtzman
Hipolito Colon
Jim Calantjis
Larry Fisher
The Giraffe Project and Giraffe Heroes' Program
Jimmy Kilpatrick and George Scott
Zach Kopplin
Matthew LaClair
Wangari Maathai
Erich Martel
Steve Orel, in memoriam, Interversity, and The World of Opportunity
Marla Ruzicka, in Memoriam
Nancy Swan
Bob Witanek
Peyton Wolcott
[ More Details » ]
 
New Jersey Attorney Ethics Committee Recommends the Permanent Disbarment of Attorney Edward Fagan
In recent years, Fagan’s reputation has gone into a freefall. For years the first client he represented on the Swiss banks case, Holocaust survivor Gizella Weisshaus, 78, had alleged that Fagan stole money from the escrow account of her dead cousin Jack Oestreicher.
          
From the Editor, Betsy Combier
On November 20, 2008, Gizella Weisshaus and I boarded a train and went to Trenton New Jersey to hear the oral arguments of Ed Fagan, speaking in his own defense, and the opposing arguments of John McGill III, Deputy Ethics Counsel in the Office of Attorney Ethics, in the case of Mr. Fagan's recommended disbarment. Mr. Fagan insisted to the panel not only that "they" did not know New York Law, but also that in New York it is ok to take money from an escrow account without letting your client know about it, and it is also ok to transport this 'borrowed' money across state lines into New Jersey, where it can be placed into an account and used without the client's consent.

Pretty amazing stuff, and I'm glad I went. John McGill III, an African - American Gregory Peck, who should be cast in the movie to play himself, spoke for the Attorney Ethics Committee. Mr. McGill discussed the Fagan crimes in an eloquent presentation that should be transcribed for educational purposes. The contrast of Mr. McGill's statements to those of Mr. Fagan, who was heard waffling in "feel sorry for me" excuses, was noticed by everyone present. Full disclosure: Mrs. Weisshaus has been a friend of mine for more than 10 years.

The New Jersey Attorney Ethics Committee has decided to recommend Ed Fagan's permanent disbarment in New Jersey. The decision, as it was sent to me today, is below:

SUPREME COURT OF NEW JERSEY
Disciplinary Review Board Docket No. DRB 08-143
District Docket No. XIV-00-135E _________________________

IN THE MATTER OF
:
EDWARD D. FAGAN
:
AN ATTORNEY AT LAW

__________________________
Decision
Argued: November 20, 2008
Decided: January 16, 2009
John McGill, III appeared on behalf of the Office of Attorney Ethics.

Respondent appeared pro se.

To the Honorable Chief Justice and Associate Justices of the Supreme Court of New Jersey.

This matter came before us on a recommendation for disbarment filed by Special Master Arthur Minuskin, J.S.C. (Ret.), based on respondent's knowing misappropriation of client and escrow funds. For the reasons expressed below, we agree with the special master's recommendation.

Respondent was admitted to the New Jersey bar in 1980 and to the New York bar in 1988. On December 11, 2008, however, he was disbarred in New York for filing a federal suit in bad faith, deceiving the federal court about critical facts concerning a previous class action settlement, engaging in champerty by purchasing interests in stolen artwork solely for the purpose of bringing lawsuits involving that artwork, and naming a nonexistent plaintiff in the suit. In disbarring respondent, the New York Supreme Court, Appellate Division, also considered his "pattern of prior sanctions for unprofessional conduct," his "lack of contrition or acknowledgement of any wrongdoing," and "the absence of little if any mitigation." In the Matter of Edward D. Fagan, M-2731, M-3148, M-3193 (S.Ct.N.Y., App. Div. December 11, 2008).

In 2002, respondent was reprimanded in New Jersey for misrepresenting to his client that he had filed a motion on the client's behalf and that a court date had been scheduled. In re Fagan, 172 N.J. 407 (2002). In 2003, respondent was admonished for failing to keep his client informed of the status of her personal injury matter and for failing to abide by an agreement in lieu of discipline that required him to attend a diversionary legal education course. In the Matter of Edward D. Fagan, DRB 03-286 (October 21, 2003).

Since September 27, 2004, respondent has been on the Supreme Court's list of ineligible attorneys for failure to pay the annual assessment to the New Jersey Lawyers' Fund for Client Protection. Prior to that date, he was ineligible to practice law during the following time periods: July 3 through 21, 1986; July 18, 1991 through February 6, 1992; July 20 through December 17, 1992; December 12, 1994 through May 3, 1995; September 15 through October 15, 1997; September 21, 1998 through March 19, 1999; and September 30, 2002 through February 28, 2003.

In September 1999, the District V-C Ethics Committee ("DEC") began an investigation into whether respondent had practiced law while ineligible between September 1998 and September 1999. The investigation was prompted by a telephone book listing that had appeared during that time. In late October 1999, respondent informed the DEC that the listing was a mistake and requested that the matter be closed. DEC investigator Lawrence Gaydos, Jr. testified that the investigation remained open because respondent had not complied with the DEC's request for copies of his business and trust account statements. Between October 29, 1999 and March 9, 2000, the DEC made numerous requests of respondent for copies of various financial documents, including business and trust account statements, "ledgers/statements," and all deposit slips and checks. Respondent typically supplied the documents only after prompting by the investigator.

In January 2000, respondent informed the DEC that some of his business and personal bank records were no longer available, presumably as the result of his "acrimonious divorce." In March, he provided the DEC with a re-creation of his business and trust account ledgers for the relevant period. He never supplied ledger sheets.

In May 2000, the investigation was transferred to the Office of Attorney Ethics ("OAE") because respondent's records demonstrated that he had issued trust account checks to "cash" and that some of those funds had been deposited into his business account.

Respondent is a personal injury lawyer, who has achieved a certain level of fame and notoriety for his work in many class actions instituted on behalf of tens of thousands of Holocaust survivors. He broadly described these matters as "restitution cases related to expropriated assets dating back to the Holocaust period" (1933 to 1945), as well as post-1945, when various countries nationalized assets.

In 1996, respondent filed the "Swiss Banks" case in the United States District Court for the Eastern District of New York. The named plaintiff was Gizella Weisshaus. The case arose out of the claim that some Swiss banking institutions had denied Holocaust victims and their survivors access to assets that their relatives had deposited for safekeeping from the Nazis. The banks refused to turn over any assets to these individuals because they were not able to provide the secret account numbers, which were known only to the account holders, who had died in the Holocaust. The matter was certified as a settlement class for the purpose of valuing the victims' claims.

Eventually, the settlement class was consolidated with a class action seeking slave labor profits that were deposited into the Swiss banks to hide them from the Allies and a class action filed by the World Council of Orthodox Jews as "successor to the Orthodox Jewish assets and the Jewish World." These consolidated cases were captioned In re Holocaust Victim Assets Litigation.

On August 12, 1998, the consolidated cases settled for $1.25 billion. Respondent was awarded a $1.3 million fee in 2002, but he testified that he only received $950,000. The $450,000 difference was, at respondent's request, distributed to four individuals whose claims had been denied. One of those individuals was Gizella Weisshaus.

Respondent also was involved in other Holocaust-related actions. In one of these matters, he was awarded a $4.3 million fee in July 2001. Respondent claimed, however, that he realized only $75,000 because the rest had been turned over to entities that had advanced him funds and to his former wife, who received $2.6 million from the divorce proceedings.

Respondent's financial condition was at issue in this disciplinary case. In March 1996, he was well behind in office rent payments. In 1997 he and his then-wife began to have marital problems. In the spring of 1998, the IRS was attempting to put a lien on his personal residence, which already had a $22,000 mortgage deficit. In June, a notice of levy was issued in favor of Yellow Book Company Incorporated for $64,906.95. In August, respondent had to borrow $250,000 from a friend to "cover" $180,000 in trust account checks that he had issued to the beneficiaries of an estate. On October 30, 1998, the IRS issued a notice of levy to respondent and his law firm for $290,993.91 in back taxes, interest, and penalties between December 31, 1994 and June 30, 1997. By October 1998, respondent claimed that he had $497,000 in judgments or liens against him.

This disciplinary matter involves two clients: Gizella Weisshaus and Estelle Sapir. Both women were Holocaust survivors. At some point, they were plaintiffs in the Swiss Banks case. As of the date of Weisshaus's testimony in this matter (November 2005), she was approximately seventy-six years old. Sapir passed away in April 1999.

The formal ethics complaint, dated December 3, 2004, charged respondent with knowing misappropriation of escrow funds from the estate of Jack Oestreicher, Weisshaus's cousin, and of settlement monies belonging to Sapir, in violation of RPC 1.15(a), RPC 8.4(c), and the principles of In re Wilson, 81 N.J. 451 (1979). The first count alleged that respondent knowingly misappropriated all but $100 of $82,583.04 from the Oestreicher estate. The second count alleged that respondent knowingly misappropriated $427,500 from a $500,000 settlement on behalf of Sapir. Respondent denied any wrongdoing.

Special Master Minuskin presided over a twenty-seven day hearing, between August 18, 2005 and April 19, 2007. At the conclusion of the hearing, the special master found that respondent had knowingly misappropriated funds from the Oestreicher estate and from Sapir. Accordingly, he recommended respondent's disbarment. Since the inception of this disciplinary proceeding, in 1999, it has been complicated by respondent's conduct. He dragged out the DEC investigation. He failed to produce complete financial records to the OAE, claiming that they had been either lost or destroyed. He filed three non-compliant answers to the formal ethics complaint, all of which were stricken from the record. The special master denied respondent's motion to file a fourth amended answer to the complaint.
At the hearing, respondent disclosed, for the first time, certain material facts that bore directly on his defenses. Moreover, he often failed to answer simple "yes or no" questions unless the special master forced him to do so.

Former OAE Assistant Chief Investigative Auditor Gus Pangis was assigned to investigate this matter. Pangis testified that a demand audit scheduled for April 24, 2000 had been postponed at respondent's request. At the time, the focus was on respondent's trust account activity between January 1, 1998 and April 12, 2000, and his recordkeeping practices.

On May 5, 2000, respondent's then-attorney, Raymond Barto, wrote a letter to Pangis, explaining that, in May 1998, respondent had obtained a settlement on behalf of an unidentified Holocaust survivor client (Sapir), who had instructed him to hold the funds in his trust account and disburse portions to her, in cash, as she required. Based on Barto's letter, Pangis understood that, when respondent wrote trust account checks to "cash," he gave the money to Sapir. However, despite the OAE's requests, respondent never submitted written proof that cash payments were made to Sapir and that she received them. Indeed, the parties stipulated that he had no receipts from Sapir, acknowledging the receipt of cash.

Pangis testified that respondent never provided the OAE with an accounting of the Sapir funds. Respondent supplied only an unsigned, undated settlement statement that he had given to Sapir's heirs, after her death.

Respondent did not provide to the OAE all of the records required under the New Jersey recordkeeping rules so that Pangis could determine how the settlement funds had been disbursed. Respondent did not provide client ledgers, bank statements, cash receipts and cash disbursement journals, or reconciliations of his Bank of New York or Summit Bank trust accounts. The parties stipulated that respondent had violated R. 1:21-6(c)(1)(g).

The next audit visit was scheduled for April 26, 2001. This time, the period in question covered January 1997 to April 6, 2001. Respondent was required to produce his business and trust account records from New Jersey and New York. The focus of the audit was respondent's "handling of funds received in connection with the Holocaust matters as well as (his) trust account in general." Pangis testified that the April 2001 audit was again postponed, due to the unavailability of either respondent or his attorney or both. The audit did not take place until August 26, when respondent and Barto produced only some records, claiming that others had been turned over to either respondent's or to his wife's attorney in the divorce matter and had not been returned. Pangis retired in December 2002. In January 2003, OAE disciplinary auditor G. Nicholas Hall was assigned to this case.

The scope of the investigation expanded when, in February 2004, Weisshaus called Hall and expressed her belief that respondent had misused funds from the Oestreicher estate. Among other things, Weisshaus gave Hall a copy of an August 28, 1998 Suffolk County (New York) Surrogate's Court order ("the August 1998 order"), requiring respondent's payment of $82,583.04 for administration expenses, legal fees, and the satisfaction of a lien against the estate.

Based on an interview with Weisshaus and a review of certain documents in her possession, Hall concluded that the Suffolk County Department of Social Services ("Suffolk County") had a third-party claim against the Oestreicher estate and that respondent was required to deposit the estate's funds into his New York trust account, where they were to remain until the claim had been settled. Yet, when the August 28, 1998 order was entered, the New York trust account contained only $100. The account had been inactive since October 1997. Moreover, no funds from the New York trust account had ever been transferred to a New Jersey trust account that respondent opened at Summit Bank in October 1997. Hall's investigation, thus, included respondent's disposition of the $82,000 funds.

THE OESTREICHER FUNDS
Weisshaus testified that she was born in Romania in 1929, immigrated to the United States in 1950, and became a citizen in 1956. She met respondent in 1992, when she retained him to represent her in a rabbinical court case. She terminated their attorney-client relationship in 1998. During those six years, respondent represented her in a number of matters, including the Swiss Banks case and the Oestreicher estate. Weisshaus's cousin, Jack Oestreicher, died in 1990. She became the administratrix of his estate. At the time of his death, Oestreicher, a Holocaust survivor, owned a house that he had purchased with reparations money paid by Germany. Both respondent's firm and New York attorney Andrew Hirschhorn represented Weisshaus as the executrix, albeit not simultaneously.
In 1992 or 1993, Weisshaus retained Hirschhorn in connection with what he described as the Suffolk County lien matter. According to Hirschhorn, although Weisshaus conceded that the county had provided services to Oestreicher, she disputed the amount of the lien and its enforceability against Oestreicher's home, inasmuch as it had been purchased with Holocaust reparations money.

At some unidentified point, respondent's firm became involved in the Oestreicher estate, if only on an "advisory" basis. On August 15, 1994, respondent's associate, Frank Seiler, wrote a letter to a Suffolk County Surrogate's Court judge on respondent's law firm letterhead. In the letter, which was represented to be "a preliminary accounting" of the estate, the claims of Suffolk County and of an unidentified lawyer were identified as "disputed" liabilities of the estate. The letter concluded by stating that, in the future, either Weisshaus or an attorney acting on her behalf would contact the court.
On an unknown date, Weisshaus asked Hirschhorn if he would sue the Swiss banks on her behalf and on the behalf of other Holocaust families. He declined, claiming that the matter was too difficult for him to handle.

In February 1996, when Weisshaus retained respondent to handle the Swiss banks case, Hirschhorn's representation of Weisshaus as executrix of the Oestreicher estate formally ended. According to Hirschhorn, as of that date, he had been holding in escrow $82,583.04, which represented the proceeds from the sale of Oestreicher's property. Hirschhorn understood that the proceeds belonged to the estate and that they were subject to Suffolk County's lien and the claims of other creditors.
On February 16, 1996, respondent sent a fax to Weisshaus (with a "copy" to Hirschhorn), in which he wrote:
As per our telephone conversation from earlier today, I will receive the $82,000 + monies over which Andrew Hirschhorn Esq. now has control or which he is holding for you relating to the matter in Nassau County (sic). The check should be written to "Edward D. Fagan Esq., attorney for Gizella Weisshaus."

On February 25, 1996, Hirschhorn wrote a letter to Weisshaus, which she acknowledged receiving. The letter stated as follows:

Dear Mrs. Weisshaus:

Let this letter serve to confirm that you have authorized me as the former attorney for the estate to release the monies held in escrow to another attorney EDWARD FAGAN, ESQ. who is representing you on the estate, to hold in his own escrow account on behalf of the estate.

I am releasing this money as per your direction as Executrix of the estate and with the understanding that said monies will continue to be held by Mr. Fagan for the benefit of the estate.

This office has not represented you for some time as Executrix. However, we are aware that several creditors claims have been levied against the estate and that you are holding the monies in trust for them, as well as for the other creditors, and beneficiaries of the estate.

This office would caution you against any preliminary distributions before all claims are resolved unless you receive the approval of the Surrogate. However, due to the length of time that I have been away from this matter, I cannot offer any legal advice on this issue except to direct you to seek the counsel of your present attorneys and the consent of the court.

Please sign the bottom of this letter.

Hirschhorn testified that, when he wrote the $82,583.04 escrow service account check to "EDWARD FAGAN, AS ATTORNEY," with "ESTATE OF OESTREICHER" written on the memo line, he understood that the monies would "continue to be held by Mr. Fagan for the benefit of the estate." Moreover, Hirschhorn explained, making the check payable to respondent "as attorney" signified that the check was to be held in escrow and not to be used for another purpose. This was and continued to be Hirschhorn's practice, based on what he had learned from senior attorneys, early in his career. Hirschhorn did not recall having had any conversation with respondent about respondent's intended disposition of the funds, either before or after Hirschhorn's discharge as Weisshaus's attorney.

At issue is the propriety of respondent's disposition of the $82,000. He testified that he had Weisshaus's authorization to apply the funds to $70,000 in legal fees that she owed him for his services in the many other cases in which he represented her. Weisshaus, however, testified that she never authorized respondent to use any of the funds for any purpose unrelated to the estate. She believed that respondent would place the funds into an interest-bearing escrow account. Hall testified that, on March 1, 1996, the $82,583.04 escrow check was deposited into respondent's New York trust account. Before this deposit, the account balance was $140.73.
On March 25, 1996, the balance in respondent's New York business account was $7,947.75. Yet, on that same date, respondent issued to Constitution Realty ("Constitution") four business account checks, totaling $39,400, in payment of overdue office rent.

On March 27, 1996, Hall testified, respondent wrote a $40,000 trust account check to the order of his business account, which he deposited on the same day. On March 28, 1996, after the rent checks had cleared, the business account balance was back down to $6,094.50. On March 29, 1996, the balance in respondent's New York trust account was $62,773.76. Therefore, Hall concluded, respondent had invaded the Oestreicher funds. As of October 23, 1997, respondent's New York trust account had a $100 balance. The balance in his New York interest-only lawyers account (IOLA) was only $51. On October 23, 1997, respondent opened a trust account in New Jersey at Summit Bank with a $35,000 deposit, representing settlement proceeds in the Ida Quinn Sawyer matter. The two New York trust accounts (with only $151 between them) and the newly-opened Summit trust account were the only trust accounts that respondent maintained at the time.

Hall prepared a reconstruction of the disbursements and receipts for the Summit trust account from October 23, 1997 through February 23, 2001. During this three-year period, respondent never deposited any Oestreicher funds into his Summit trust account – the account from which obligations of the Oestreicher estate were eventually paid. Hall testified that, during a January 2004 demand audit, respondent stated that "there were no obligations paid from the New Jersey Summit trust account related to client obligations from his New York trust accounts." Notwithstanding this representation, the first check drawn against the newly-opened Summit trust account was in the amount of $3750, payable to Alan S. Porwich, Esquire, in a New York case identified as the McGoy matter, which had settled in August 1997.
The McGoy settlement proceeds were deposited into respondent's New York trust account. The McGoys were paid $29,459.37 in early September 1997. By October 31, 1997, the balance in the New York trust account was only $200.

When Hall confronted respondent with this information, respondent stated that Porwich had previously handled the McGoy representation and, thus, had claimed a portion of the fee. Respondent added that he had disputed Porwich's claim, but paid him $3750 anyway. According to respondent, the $3750 was a settlement between Porwich and him, rather than an obligation of the client to be paid from the settlement funds.

Thus, Hall testified, contrary to respondent's claim that no obligations in New York cases were satisfied with funds in the New Jersey trust account, the $3750 paid to Porwich for a New York matter were taken from the Summit trust account. Respondent then claimed that this was the only New Jersey Summit trust account transaction related to a New York client matter. As shown below, this statement also was not true.
The August 1998 order entered in the Oestreicher matter required respondent, "as escrowee," to pay $82,000+ in various obligations. Even though the Oestreicher matter was a New York case, respondent paid the obligations with New Jersey trust account checks. The specific checks at issue are as follows:

CHECK NO.
DATE ISSUED DATE POSTED PAYEE AMOUNT
1009 09-02-98 09-18-98 Weisshaus $33,814.87
2021 10-27-98 11-09-98 Suffolk County $46,097.18
1022 10-27-98 10-29-98 Faruolo Firm $ 2,669.25

Hall testified that these funds had been taken from $500,000 in Sapir settlement monies, which were deposited into the New Jersey Summit trust account on May 16, 1998. Respondent had stated to Hall that his fee in the Sapir matter was $60,000. Yet, by November 9, 1998, when the last of the Suffolk County checks had cleared, the New Jersey trust account balance was only $379,000, instead of $440,000.
In addition, between May 18 and November 9, 1998, only six deposits were made into the New Jersey trust account and none of them were Oestreicher funds. Finally, as of November 9, 1998, each of respondent's New York trust accounts had less than $100 in it and both accounts were inactive. In short, there were no Oestreicher funds in any of respondent's trust accounts in 1998 and, therefore, respondent was not entitled to use any of his New Jersey Summit trust account funds for the payment of Oestreicher liabilities.

Contrary to respondent's claim that Weisshaus had authorized him to apply Oestreicher funds to her outstanding legal fees, Weisshaus insisted that she had never authorized respondent to use any of the estate funds for purposes unrelated to the Oestreicher estate. She testified that, when she hired respondent to represent the estate, in early 1996, she "give [sic] him the escrow money to hold." According to Weisshaus, respondent told her that he would put the funds into an escrow account at the Bank of New York and that she would receive at least five percent interest. She steadfastly maintained that, if respondent had not agreed to this, she would not have given the money to him.
Respondent, in turn, testified that, notwithstanding the memo line on Hirschhorn's $82,000 escrow check to respondent ("Estate of Oestreicher") and respondent's notation, "estate monies," on a fax to Hirschhorn, he believed that the funds belonged to Weisshaus, who was Oestreicher's sole beneficiary. Respondent conceded that at the time he deposited the $82,000 funds into his New York trust account, Suffolk County had asserted a claim against Weisshaus and the estate. Nevertheless, because it was only a "claim, not a lien," he did not believe there were any restrictions on the use of the $82,000. Thus, according to respondent, the money already belonged to Weisshaus as the estate's sole beneficiary and the issue was how much of those funds she might have to return to Suffolk County, if it prevailed on its claim against the estate. He contended that this is why he had agreed to represent her, instead of the estate.

Notwithstanding respondent's firm's August 1994 preliminary accounting to the Surrogate's Court, he asserted that his firm did not represent Weisshaus, but merely provided her with assistance in preparing the report. In any event, he pointed out, the letter referred merely to a disputed claim, not a "lien." The point of the letter, according to respondent, was that Weisshaus believed that only she was entitled to the Oestreicher funds and, that, therefore, she could do anything she wanted to do with the $82,000.
Despite respondent's claims that he did not represent Weisshaus as executrix and that he did not believe that the use of the funds was restricted by Suffolk County's "claim," his actions clearly contradicted these assertions. First, respondent did represent Weisshaus as executrix of the Oestreicher estate when he took control of the $82,000 in February 1996. Prior to Hirschhorn's transfer of the $82,000 to respondent, respondent had written to Weisshaus, acknowledging that he would be receiving the "$82,000+ monies over which Andrew Hirschhorn Esq. now has control or which he is holding for you relating to the matter in Nassau [sic] County." Second, on August 28, 1996, he wrote a letter to the Acting Surrogate of Suffolk County in which the first sentence read: "Fagan & Associates represents the executrix and the estate in the above referenced matter." Two days later, respondent submitted a brief on behalf of the estate in which he acknowledged Suffolk County's claim and argued that it should be "disallowed in its entirety." Third, as will be discussed below, in July 1998, respondent stated to New York disciplinary authorities that the $82,000 was subject to a lien and that the funds were required to remain in escrow until the validity of the lien was determined by a court.

As to what happened to the Oestreicher estate funds after they were deposited into respondent's New York trust account, he testified that he told Weisshaus that he would apply the funds to her outstanding legal fees. Respondent never notified the Surrogate's Court either that he held the $82,000 in payment of past-due legal fees or that he claimed a right to the money. According to respondent, he did not believe that he was obligated to do so.
Respondent claimed that a letter dated March 6, 1996, signed by Weisshaus, corroborated his right to apply the $82,000 not only to outstanding legal fees but to future legal fees as well. The letter, which was typed by someone in respondent's office, presumably at his direction, read:
Mr. Fagan:

Please transfer any monies which you have in your escrow account to an interest bearing account of your choosing so that my monies will earn the highest available rate of interest and so that these monies will continue to be available for and secure payment of legal fees, expenses and other such claims related to my various cases.

Respondent testified that he had Weisshaus sign this letter "before (he) touched the money" because he did not trust her, as she "sued everybody." Respondent contended that, when he received the $82,000 from Hirschhorn, he believed that he could immediately use the funds because Weisshaus had given permission to do so, as evidenced by her letter. Respondent did not produce a single bill or invoice to support his claim that Weisshaus owed him any legal fees. He claimed that the hours billed and the rate would have been included in the statements that he had prepared and submitted to her periodically for all her matters, but which he could not find. Thus, he offered only approximations of what she owed, what she paid, and the form of those payments.

With respect to all Weisshaus matters, respondent testified that he had received a total of only $7900 from her, plus the value of "weekly kugel and cake" that she had brought to him during that time. For her part, Weisshaus testified that, between 1992 and 1995, she had paid respondent approximately $8000. As indicated previously, respondent claimed that Weisshaus owed him $70,000 when he received the $82,000 in February 1996. Thus, the $12,000 difference, he claimed, was to be used for future fees. Respondent testified that he worked on "(a) whole bunch" of cases for Weisshaus, between 1993 and 1997, for which he had not charged her and for which he had not been compensated. He added that, during this period, on average, one day a week was devoted to Weisshaus's matters, whether by him or one of his associates.

With respect to the Oestreicher matter in particular, respondent did not know how much he had billed Weisshaus for legal services. He did not know whether his firm had charged her for its preparation of the accounting and other documents in the Oestreicher matter. Between March 1, 1996 and the end of their professional relationship, respondent recorded an additional $90,000 worth of time in Weisshaus matters. Thus, according to respondent's calculation, by the end of their relationship, in April 1998, Weisshaus owed him about $78,000.

 
© 2003 The E-Accountability Foundation