The Star-Ledger by Mary Fuchs - June 16, 2009
Former Morris Plains resident Edward Fagan contests his disbarment in front of the New Jersey Supreme Court in Trenton today.
TRENTON, NJ -- An attorney who was the first to sue Swiss banks on behalf of Holocaust victims and then was accused of misappropriating funds from those clients today pleaded with the state Supreme Court to let him practice law. A special ethics counsel last year recommended Edward Fagan, 56, should be disbarred after a series of hearings revealed he mishandled $400,000 of his clients' money. The Supreme Court will make that determination. "I didn't misappropriate a penny of client funds," Fagan said before the justices today.
Fagan did not deny he had taken money from Gizella Weisshaus, a Holocaust survivor he represented, after putting it in his own personal trust fund. He said he was "entitled" to the money -- more than $80,000 -- she owed him for work he had done. But Fagan could not produce all of the records showing he had done that work -- either today or during the ethics probe. Fagan said the New Jersey Office of Attorney Ethics had stolen his documents in the probe and that some boxes of evidence had ended up in New York in an ongoing federal suit against him. Some justices challenged that assertion. "You were the person who was in the best position to then find corroborative proofs of what you did," Justice Roberto Rivera-Soto said. Fagan said he was unable to obtain copies of his files from New Jersey and New York authorities. As Fagan presented his case before the court, audience members at times laughed at the proceedings. Weisshaus, who had traveled from New York to listen to Fagan's testimony, was one of them. "I didn't owe him anything," she said. "I was a fool." Weisshaus said it was a long time before she realized something "was wrong" with he ex-lawyer. In 1996, Weisshaus became the first survivor to file suit in federal court against Swiss banks. The massive class action suit won a $1.25 billion settlement in 1998 for more than 30,000 Holocaust victims from the banks, which are known for protecting their clients' privacy.
Weisshaus and Fagan went after Swiss banks they believed had dormant accounts filled with money and gold looted from Jewish homes and communities during World War II. Weisshaus had told Fagan she knew her father once had money in Swiss banks and, for all she knew, it was still there. The attorney was later accused in the ethics probe of misusing a total of $82,600 of Weisshaus' money and part of a $500,000 settlement another survivor, Estelle Sapir, who is now deceased, received from the banks. He put those funds toward business expenses, including back rent, and wrote several checks to cash, according to the ethics complaint. John McGill, the ethics attorney representing the state, became frustrated at times during the hearing. "I think the disciplinary review board's decision was fair and reasonable and I have every confidence the Supreme Court will see that justice is served in this matter," he said. As is its custom, the Supreme Court will issue its opinion at a later date. Chief Justice Stuart Rabner did not participate in the hearing. Fagan has been disbarred in New York.