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Friday, December 31, 2010

Conflicts, Conflicts and More Conflicts

Conflicts, Conflicts and More Conflicts
The New York Law Journal by Anthony E. Davis - January 3, 2011

As we enter a new year, yet again conflicts of interest issues continue to bedevil lawyers and law firms large and small. This article surveys three recent cases that address different aspects of the ethics rules and law governing conflicts of interest: representing clients adverse to affiliates of existing entity clients; the efficacy (or otherwise) of advance waivers; and, a case with overtones of Halloween that would make for humorous reading if it were not in reality about a very serious topic, the scope and meaning of "personal interest" conflicts.


In GSI Commerce Solutions Inc., v. BabyCenter, LLC, 2010 WL 3239436 (2d Cir. Aug. 18, 2010), the U.S. Court of Appeals for the Second Circuit provided important guidance to lawyers and law firms who customarily represent corporate and other entity clients, when they are called on to represent clients in matters that are adverse to an affiliate of another existing client. The plaintiffs, GSI Commerce Solutions, appealed from Judge Jed Rakoff's order granting a motion by the defendants, BabyCenter, a wholly owned subsidiary of Johnson & Johnson Inc. (J&J), to disqualify GSI's counsel. The firm representing GSI had represented J&J in other matters. Judge Rakoff had concluded that the doctrine forbidding concurrent representation without consent applied, because the relationship between BabyCenter and J&J was so close that the two were essentially one client for disqualification purposes. The District Court therefore disqualified the law firm from representing GSI because it had not obtained consent from J&J, its existing entity client. In affirming, the Second Circuit spelled out the criteria to be applied in making the determination in concurrent representation situations as to whether affiliates are to be treated as the same, or separate, entities for purposes of applying the rules governing conflicts of interest. The Second Circuit commenced its discussion of the applicable considerations by reiterating some basic principles: "Although the American Bar Association (ABA) and state disciplinary codes provide valuable guidance, a violation of those rules may not warrant disqualification. Instead, disqualification is warranted only if 'an attorney's conduct tends to taint the underlying trial.' One established ground for disqualification is concurrent representation, an attorney's simultaneous representation of one existing client in a matter adverse to another existing client. Because concurrent representation is 'prima facie improper,' it is incumbent upon the attorney to 'show, at the very least, that there will be no actual or apparent conflict in loyalties or diminution in the vigor of his representation.' We have noted that this is 'a burden so heavy that it will rarely be met.'" (Citations omitted). The court further noted that "representation adverse to a client's affiliate can, in certain circumstances, conflict with the lawyer's duty of loyalty owed to a client," a situation that we shall refer to as "a corporate affiliate conflict."

The Second Circuit then turned to the relevant factors in determining whether a corporate affiliate conflict exists:

Courts have generally focused on: (i) the degree of operational commonality between affiliated entities, and (ii) the extent to which one depends financially on the other. As to operational commonality, courts have considered the extent to which entities rely on a common infrastructure. Courts have also focused on the extent to which the affiliated entities rely on or otherwise share common personnel such as managers, officers, and directors. In this respect, courts have emphasized the extent to which affiliated entities share responsibility for both the provision and management of legal services. This focus on shared or dependent control over legal and management issues reflects the view that neither management nor in-house legal counsel should, without their consent, have to place their trust in outside counsel in one matter while opposing the same counsel in another. As to financial interdependence, several courts have considered the extent to which an adverse outcome in the matter at issue would result in substantial and measurable loss to the client or its affiliate. Courts have also inquired into the entities' ownership structure… [W]e agree with the ABA that affiliates should not be considered a single entity for conflicts purposes based solely on the fact that one entity is a wholly-owned subsidiary of the other, at least when the subsidiary is not otherwise operationally integrated with the parent company.

Applying these general principles to the case at bar, the Second Circuit concluded that:

the record established such substantial operational commonalty between BabyCenter and J&J that the district court's decision to treat the two entities as one client was easily within its ample discretion.… When considered together, [the factors considered by Judge Rakoff] show that the relationship between the two entities is exceedingly close. That showing in turn substantiates the view that the law firm, by representing GSI in this matter, 'reasonably diminishes the level of confidence and trust in counsel held by' J&J. Finally, in affirming the law firm's disqualification, the Second Circuit expressly found that the firm had failed to obtain J&J's consent to the specific corporate affiliate conflict at issue in the case.

Advance Waivers

In Brigham Young University, v. Pfizer Inc., et al., 2010 WL 3855347 (D. Utah), Sept. 29, 2010, the District Court addressed an issue that lies at the heart of many of the cases that deal with the validity of advance waivers of conflicts of interest, namely, what constitutes adequate disclosure of potential future conflicts in a law firm's engagement letter in order to avoid subsequent disqualification? In this case, the District Court upheld the decision of a Magistrate Judge in favor of Brigham Young University, disqualifying the law firm from representing defendant Pfizer in litigation with the university. The District Court agreed with the Magistrate that the advance patent waiver set forth in a 2001 engagement letter between the university and the law firm did not apply to the specific conflict which had arisen in this case, thereby negating the firm's argument that the university had previously waived this conflict. The court also agreed that the law firm's violation of Utah's Rule of Professional Conduct 1.7 was sufficiently egregious to merit disqualification.

The law firm had included the following language in its 2001 engagement letter with the university:

Advance Patent Waiver: As you may know, universities frequently hold patents in the products and inventions developed at such universities. [The firm] currently represents multiple pharmaceutical and other companies with respect to patent and intellectual property matters (collectively, the "Other Clients"), including litigation (the "Patent Matters"). [The firm] is not currently representing any Other Clients in matters adverse to the University. Because of the scope of our patent practice, however, it is possible that [the firm] will be asked in the future to represent one or more Other Clients in matters, including litigation, adverse to the University. Therefore, as a condition to [the firm's] undertaking to represent you in the BYU Matters, you agree that this firm may continue to represent Other Clients in the Patent Matters, including litigation, directly adverse to the University and hereby waive any conflict of interest relating to such representation of Other Clients.

The term "Other Clients" was defined within the waiver provision to mean "companies that [the firm] currently represents 'with respect to patents and intellectual property matters.'" The District Court accepted the Magistrate Judge's conclusion that, as a result of this language, the "waiver only applies to clients that [the firm] was representing with respect to patent and intellectual property matters as of the date of the agreement." The firm argued that this was an inappropriately narrow and unreasonable interpretation of the engagement letter, and that the advance patent waiver validly covered all "existing clients" in matters relating to intellectual property and patents, including litigation. In disagreeing, the District Court noted that when evaluating waivers, courts should look primarily to construction of the waiver language to determine its validity. For consent to be interpreted as validly waiving the client's right to exclusive representation, "[l]anguage in a contract of release…would have to be positive, unequivocal and inconsistent with any other interpretation." Where the terms of a waiver are not sufficiently explicit, as in this case, the client should not be held to the terms of the document. Accordingly, the District Court upheld the Magistrate Judge's disqualification of the firm. Both this and the GSI Commerce Solutions case demonstrate just how hard it is for lawyers and law firms to foresee the precise conflict that an advance waiver is supposed to encompass, and also how at least some courts hold that unless the disclosure actually does predict with absolute clarity the exact conflict to be waived, the disclosure, and hence the waiver, will fail. In the last analysis, so long as the ethics rules are predicated on the principle that loyalty is owed to a client overall, and not just to an individual engagement (as is the case in many other countries), and so long as courts so interpret the rules, law firms have no choice but to accept that the best that can be said of advance waivers of conflicts is that they represent hopes, not certainties.

'Personal Interest' Conflicts

In a case that more properly belongs to Halloween than New Year, In re Charna R. Johnson, respondent, member of the State Bar of Arizona, Disciplinary Commission of the Supreme Court of Arizona No. 09-0717, was a professional discipline case that addressed the tangled web of self-interest conflicts of interest. The respondent attorney was alleged by the Arizona disciplinary authorities to have had an inappropriate relationship with a client, whom she was originally retained to represent in a divorce, and she was also charged with lying about the facts and circumstances of the underlying complaint in the course of defending herself from a second unrelated complaint arising from a different client engagement. The allegedly improper relationship began after the client's wife died, when respondent began to "channel" the wife's spirit, purportedly communicating her thoughts and feelings to her former husband. The client testified that shortly after his wife died, in the course of this "channeling," the respondent, acting as his late wife, told him she loved him and pressured him to have sex. He believed his late wife's spirit had come back to try and heal some of the damage caused by her drug use. Though his wife's death ended the respondent's representation of the client to obtain a divorce, the client asked her to represent him again in a dispute over the wife's probate estate. The estate matter ended in a settlement that was very beneficial to the client, but he later claimed he was unhappy with it and that the respondent's conduct harmed him emotionally and financially.

The allegation that respondent lied to the bar authorities arose from a second, separate matter in which it had been alleged that the respondent improperly drafted the will of the ex-wife of respondent's client, in which the ex-wife left her estate to the respondent. The complainant in this matter asserted that respondent had asserted undue influence on his ex-wife by claiming to channel the thoughts of her client's deceased loved ones. In connection with this second matter, the respondent and the bar entered into a consent decree in which the agreed sanction was censure and probation. However, the complainant in this case did not believe that censure was adequate punishment. He appeared at the hearing at which the consent resolution was to be finalized with a letter, which prompted bar counsel to ask the respondent whether she had "ever 'channeled' a person for one of [her] clients" and whether she does "any 'channeling' of deceased persons." Respondent answered 'no' to both questions. Those answers formed the basis for the allegation that the respondent had lied to the bar authorities. The respondent defended the charge that she had lied by stating that she did not consider her communications for the former client's deceased wife's spirit to be 'channeling.' She also claimed that the questions did not bring to mind the former circumstances, because the experience had been so painful that she blocked it out. With respect to the inappropriate relationship charge, the hearing officer found that there was not enough evidence to prove that a sexual relationship occurred during the respondent's representation. He noted that the client encouraged the respondent's "channeling" of his late wife, and found that although there was a "significant risk that Respondent's representation could have been materially limited" by the unique relationship, there was no evidence that the client was harmed financially or emotionally. However, the hearing officer found that the respondent had lied about her behavior in defending herself in connection with the other case, and on that dishonesty charge the respondent was suspended for two years. This case demonstrates that it is sometimes difficult for lawyers to recognize a personal interest conflict of interest, and how important it can be to seek disinterested advice as to how to proceed when lawyers do become aware of the existence of such conflicts. In this case, the lawyer was evidently too distracted by her own problems to recognize the need for guidance before engaging with her client either in the relationship or the other activities. Lawyers without professional peers to turn to for objective advice should consider adopting a bright-line rule: if there is any personal interest or involvement with a client, avoid the representation. Anthony E. Davis, a partner at Hinshaw & Culbertson, is a past president of the Association of Professional Responsibility Lawyers.

Thursday, December 30, 2010

Law Firm to Get $25 Million Despite Ground Zero Screw Up

Filing 'foul-up' threatens GZ $$
The New York Post by SUSAN EDELMAN - December 29, 2010

An incredible blunder by their lawyers could cost Ground Zero responders a share of the $100 million deal settling claims against the Port Authority and private companies, The Post has learned. That's because the recently passed Zadroga Bill excludes people who sign on for other settlements after it becomes law. And that will happen as soon as it's signed by President Obama, perhaps as early as next week. The claims include actions filed against the PA, the company that brought Ground Zero debris to Staten Island's Great Kills landfill, and two contractors at the landfill. The 9/11 responders say they still haven't gotten the paperwork to accept the $47.5 million offer from the PA, $24.3 million from the landfill contractors, and $29 million from the barge operator.

A source told The Post the law firm representing most of them, Worby Groner Edelman & Napoli Bern, "screwed up" by not mailing out releases on the additional settlements months ago, and now it's too late. The Zadroga bill provides $2.8 billion in compensation for economic losses, but only to responders who sign on to additional settlements before it becomes law. Many may pass entirely on the settlement, since signing on after Zadroga takes effect would make them ineligible for the federal compensation -- although they'd still get a share of its $1.5 billion in medical payments. "My head is spinning," said former NYPD Detective Ernie Vallebuona, who suffers from lymphoma. Vallebuona, who is represented by Worby Groner, said, "My lawyers have not provided any advice." The firm's lead lawyer, Paul Napoli, insists the fact that his firm reached deals with the PA and the contractors is enough to satisfy the provisions of the Zadroga Bill. "All claims are released as of the date of the settlement agreements with the defendants," he said. Napoli's firm stands to collect nearly $25 million in fees -- or 25 percent -- from the additional settlements. Lawyers' fees for negotiating individual Zadroga settlements are capped at 10 percent. The PA and contractor claims are separate from about 10,000 suits against the city, which were settled for $625 million. The deal with the city required 95 percent of the plaintiffs to agree. The percentage needed for the PA and contractor suits is in the same ballpark, sources said. Steve Coleman, a PA spokesman, said the settlement is not final until a sufficient number of plaintiffs agree in writing. A release, he said, requires "a signature saying you're going to opt in." Other lawyers agreed. "A release is tendered when it is signed by the client and sent to the other side -- not when the lawyers make a deal," said Gregory Cannata, another lawyer who represents 9/11 workers. The Zadroga bill honors James Zadroga, a detective who became sick and died after working at Ground Zero.

Wednesday, December 29, 2010

Judge in Dispute With D.A. Is Reappointed by Mayor

Judge in Dispute With Queens D.A. Is Reappointed by Bloomberg
The New York Law Journal by Daniel Wise - December 29, 2010

Criminal Court Judge Joel L. Blumenfeld, who is in the midst of a legal battle with Queens District Attorney Richard A. Brown, has been reappointed by Mayor Michael R. Bloomberg to a new full 10-year term. Judge Blumenfeld, 65, who has been a Criminal Court judge since 1987 and an acting Supreme Court justice since 1991, signed his oath of office at City Hall yesterday, a spokesman for the mayor confirmed. Mr. Brown has a writ of prohibition pending in the Appellate Division, Second Department, seeking to bar Justice Blumenfeld from ruling in a suppression proceeding on the ethical propriety of the district attorney's program for questioning suspects while they are being held at Queens courthouses before their arraignments. Mr. Brown also had written to the Mayor's Advisory Committee on the Judiciary opposing Justice Blumenfeld's reappointment, according to several sources who had been briefed about the contents of the document (NYLJ, Oct. 15). Citing confidentiality of the appointment process, Mr. Brown would not comment on whether he had sent a letter. By executive order, Mr. Bloomberg could not have re-appointed Judge Blumenfeld unless he had been approved by the mayor's 19-member advisory committee and the New York City Bar. Zachary Carter, the chairman of the committee, would not discuss the appointment process. Asked about opposition to his reappointment, Judge Blumenfeld said in a brief phone interview yesterday that "I will move on and do my job" and the district attorney's office "will do its job." Mr. Brown, through his press aide, Kevin Ryan, declined to comment. Steven J. Singer, a defense lawyer who spearheaded a drive to support Judge Blumenfeld's reappointment, called the judge one of the top three "shining stars" hearing criminal cases in Queens Supreme Court. Mr. Singer is a former president of the Queens County Bar Association. Mr. Brown charged in his petition, Brown v. Blumenfeld, 2010-9688, that Judge Blumenfeld's actions were "transforming the simple suppression motion pending before him into a shadow grievance proceeding at which he could publicly accuse, try, and judge the District Attorney and his Assistants, without affording them any of the rights or protections normally inherent in any such proceeding" (NYLJ, Oct. 15). Judge Blumenfeld, in a memorandum written by his lawyer Mark Pomerantz of Paul, Weiss, Rifkind, Wharton & Garrison, called the petition an attempt "to muzzle a sitting judge from ruling on issues properly before him," which is "unprecedented, unsound, and unwise" and "ought [to] be swiftly rejected" (NYLJ, Nov. 22). Mr. Brown replied that he had no objections to discussing his interview program publicly but that the suppression motion before Judge Blumenfeld did not offer the appropriate forum for such an examination (NYLJ, Dec. 20). Judge Blumenfeld, a former criminal defense lawyer with the Legal Aid Society, was appointed by Mayor Edward I. Koch in 1987 to fill out the term of a judge who had left the bench. Mr. Koch appointed him to a full 10-year term in 1989. In 1999, Mayor Rudolph Giuliani reappointed the judge to a two-year term over the objections of Mr. Brown. Mr. Giuliani reappointed Judge Blumenfeld to a full 10-year term in 2001. According to sources, Mr. Brown's opposition to giving Judge Blumenfeld a third 10-year term was related to the district attorney's perception that the judge had exhibited a pro-defense bias. In addition to Judge Blumenfeld, three other Criminal Court judges also signed oaths of office yesterday after being reappointed by the mayor: Judges John S. Moore and Ethan Greenberg, acting Supreme Court justices sitting in the Bronx, and Criminal Court Judge Michael A. Gary, an acting Supreme Court justice in Brooklyn. Daniel Wise can be contacted at

Tuesday, December 28, 2010

Innovative Attorney Arrested in Cemetery Plot Money Laundering Scheme

Immigration attorney charged with perpetrating visa fraud to buy grave sites
Daily News Wire Services - October 16, 2010

"Attorneys are sworn to uphold the law, and those who instead manipulate the system through fraud deserve criminal prosecution," said Acting U.S. Attorney George S. Cardona.

West Covina, CA - An immigration atorney was due before a federal judge for the first time on Friday in connection with an alleged decade-long employment visa fraud scheme in which profits were used to buy vacant grave sites in Whittier as an investment. Kelly Einstein Darwin Giles, 46, owner of a West Covina law practice formerly known as the East West Law Group, was arrested by U.S. Immigration and Customs Enforcement agents at Los Angeles International Airport late Thursday as he returned from an out-of-town trip. His two business associates, Joseph Wai-man Wu, 50, and Wu's wife, May Yin-man Wu, 43, were arrested early Thursday, ICE officials said. The three are accused of setting up nearly a dozen shell companies in order to file fraudulent employment visa petitions on behalf of their clients. Many of the petitions were for H-1B visas, which are reserved for foreign workers with specialized skills, such as accountants and information technology professionals. Authorities allege the aliens named in those visa applications never worked for the defendants or the fictitious companies. ICE agents, executing a search warrant at Giles' law office, seized immigration applications and documents, financial records and computer equipment. The Wus made their initial appearance Thursday in U.S. District Court in downtown Los Angeles, where a magistrate set bond for each at $250,000. Giles was due in court Friday afternoon.

"Attorneys are sworn to uphold the law, and those who instead manipulate the system through fraud deserve criminal prosecution," said Acting U.S. Attorney George S. Cardona. "United States immigration laws are intended to provide benefits to individuals who meet specified criteria -- not immigration attorneys and opportunists who manipulate the system for personal financial gain," Cardona said. Also Thursday, ICE agents served notice on a local mortuary seeking to seize 30 vacant burial plots and 20 blank grave monuments. Authorities allege the grave sites, located in Inspiration Meadow and the Garden of Gratitude at Rose Hills Memorial Park in Whittier, were bought by the defendants using proceeds from the visa fraud scheme. ICE investigators emphasize that Rose Hills had no involvement in the alleged criminal activity. According to funeral professionals, cemetery plots appreciate at a rate of up to 10 percent a year and are less susceptible to economic downturns than other types of real estate. The seizure action is believed to be the first in the Central District of California involving grave sites. If the plots are ultimately forfeited to the government, they would be sold at public auction. "Cemetery plots are certainly a novel way to attempt to launder the proceeds from criminal activity, but as this case shows, we will follow the money trail wherever it leads," said John Morton, Homeland Security assistant secretary for ICE. "ICE's message is simple -- America's legal immigration system is not for sale, and we will investigate and prosecute those who compromise the integrity of our system simply to enrich themselves," Morton said. The nearly 200-page case affidavit alleges the defendants charged anywhere from $6,000 to $50,000 to file fraudulent employment visa petitions on behalf of alien clients. So far, investigators have identified about 100 aliens for whom fraudulent petitions were filed. Authorities say some of those foreign nationals may have ultimately adjusted to permanent resident status and received "green cards." Agents are continuing to review immigration records to identify any ineligible foreign nationals who may have received employment visas as a result of the defendants' alleged actions, according to ICE.

Monday, December 27, 2010

The Corruption Beat Goes On In New York

The corruption beat goes on
A Journal News EDITORIAL - December 16, 2010

New York is truly a special place, so special that the Senate majority leader gets indicted on a cornucopia of corruption charges, for alleged figurative and literal gluttony, and it engenders little more than raised eyebrows from the masses. Perhaps more interesting than the long-expected charges against Sen. Pedro Espada was this from Attorney General and Gov.-elect Andrew Cuomo, in announcing the charges : "The days where state officials can abuse the taxpayers are over." Is there anyone in New York who really believes that? In a surprise to absolutely no one, the U.S. Attorney's Office in Brooklyn and Cuomo on Tuesday indicted Espada, who lives in Mamaroneck while representing the Bronx, and his son, Pedro Gautier Espada, on a total of six corruption charges, all stemming from their dealings with the Comprehensive Community Development Corp., the taxpayer supported health-care provider known as Soundview Healthcare Center. They allegedly embezzled more than $500,000 from Bronx-based Soundview, which was founded by Pedro Espada in 1978. They are alleged to have relied upon an array of mundane and spectacular deceits, over many years of wrongful conduct.

Charges Were Expected

The indictment alleges that Espada, defeated this year in his re-election bid, and his family charged some $100,000 to Soundview's corporate credit card, for pricey meals throughout Westchester — $20,000 alone for sushi bought from a Mamaroneck restaurant. Espada's son is accused of rigging a Soundview contract for janitorial services, so that the Espada family's janitorial company would win the contract and at an inflated price. Espada allegedly used Soundview funds to pay campaign expenses, such as for mailings, and for a petting zoo outing and pony rides. The senator allegedly attempted to use a $49,000 check from the Development Corp. for the purchase of a new Bentley. Only a bad credit review cost Espada that luxury. Many of the allegations are not new to voters; some surfaced in a civil lawsuit that Cuomo filed in the spring alleging that the senator had siphoned off more than $14 million from Soundview, the bulk of it coming in a promise to pay Espada a $9 million severance package. But the charges also come directly on the heels of now-ex-Sen. Vincent Leibell's pleading guilty to corruption charges. Before Leibell, there was former state Sen. Hiram Monserrate, D-Queens, who was indicted in October on federal corruption charges.

Bentley-Grade Impunity

Before Monserrate, there was former Sen. Efrain Gonzalez, D-Bronx, who pleaded guilty last year to charges he looted nonprofit organizations. Before Gonzalez, there was former GOP Senate leader Joe Bruno, of Rensselaer County, who was also convicted of corruption. A host of other sitting legislators, including Sen. President Malcolm Smith, D-Queens, face corruption inquiries related to their dealings with nonprofits. Small wonder the voters barely register any surprise over Espada's escapades; they are likelier to wonder who will be next. Despite the seemingly endless indictments, Albany has yet to agree on any ethics law with any teeth in them; campaign finance reform remains a nice idea; only the barest constraints even endeavor to keep lawmakers' hands out of the coffers of taxpayer-supported nonprofit groups; and nearly everybody elected to the Legislature gets re-elected (because of political advantage and mostly woeful challengers). Gov.-elect Cuomo, preening after the Espada indictment, said the days are "over" where state officials "can abuse" the taxpayers. We sure wish someone would tell that to the legislators; it still feels like they are running up the score — with Bentley-grade impunity.

Sunday, December 26, 2010

Ex-Judge and Former DA Plays Tough Guy When Arrested

Ex-judge, officer differ on arrest
The Republican by Fred Contrada - December 23, 2010

It is reported that while being Booked, the former judge asked the police officer if he "really wanted to do this [arrest him]."

NORTHAMPTON, MA - The officer who arrested W. Michael Ryan "violently" dropped his bicycle and rushed at the former judge, refusing to let him change a flat tire or call AAA, according to a motion filed on Ryan's behalf. Ryan, 64, is charged with assault and battery on a police officer and disorderly conduct as a result of the Oct. 15 incident in a parking lot near the Hampshire County Hall of Records. Police said Ryan and his law partner, Barbara Plante, appeared to be intoxicated as they tended to their vehicle, which had broken down in the lot. According to a police report, Ryan refused to identify himself and jabbed at the hand of Officer Andrew Kohl after Kohl removed Ryan's wallet from his pocket. Police then pinned Ryan to the car, handcuffed him and arrested him.

Much of the encounter is captured on a police video that Ryan released to the media. In a motion filed in Northampton District Court last week, defense lawyer Aaron Wilson asks that the case against his client be dismissed because the video has no audio component. According to Wilson, the audio is "vital evidence" that would have verified Ryan's version of that night's events. The motion quotes Police Chief Russell P. Sienkiewicz saying that the audio portion of a recording is only turned on after both parties are notified. This is inconsistent with explanations provided by the prosecution of the missing audio, Wilson said. Ryan's story, some of which is detailed in several motions filed by Wilson, differs dramatically from the report written by Kohl. Kohl stated that he was on bicycle patrol when he came upon Ryan and Plante in the parking lot trying to change the tire. Ryan was uncooperative, refusing to say where he was going or coming from, according to Kohl. Ryan described Kohl as the aggressor. "Officer Kohl violently dropped his bike and rushed over to me and angrily asked me again where I was coming from and where I was going to," Ryan wrote. "I answered that I didn't have to answer his questions and I wouldn't." Wilson also filed a motion to suppress Ryan's invocation of his right to remain silent as well as all other statements his client made at the scene, saying that Ryan was effectively in police custody. Ryan said he tried to leave several times but was prohibited from doing so by Kohl and other officers. Ryan, who suffers from a sleep disorder, told Kohl he was not the driver of the car, adding that he had not driven a car in almost 10 years, according to one of the motions. He also instructed Plante not to answer any questions by police, telling officers that he was her lawyer. According to Ryan, police refused to let him change the flat tire or call AAA, saying they would tow the car. One of the officers at the scene appeared to recognize Ryan, calling him "judge," Ryan said. Ryan was the presiding justice of Northampton District Court from 1997 to 2002. He also served as Northwestern District Attorney from 1983 to 1988. He retired from the bench in 2008, citing his sleep disorder. Because Ryan has been associated with the district court judges in this circuit, Superior Court Judge Charles Hely was tapped to hear the case. Northwestern District Attorney Elizabeth D. Scheibel also named Berkshire County Assistant District Attorney Joseph Yorlano special prosecutor. Yorlano has opposed Wilson's request for discovery, saying the defense is trying to force the prosecution to disclose its theory of the case. Discovery is the sharing of evidence and other material that the two sides plan to use in a case. Wilson has asked the prosecution to state whether it views Ryan's alleged assault and battery as "reckless" or "intentional." Wilson maintains that there is insufficient evident to support either charge against Ryan.



Saturday, December 25, 2010

Coast-to-Coast Lawyer Crooks

Lawyer Accepts Disbarment for Ripping Off Widow
The National Law Journal by Amanda Bronstad - December 22, 2010

A California lawyer who was arrested on charges that he embezzled $117,000 from a widow he represented in a trust matter has agreed to be disbarred. Redmond Peter McAneny of Newport Beach, Calif., was arrested on Dec. 13 by investigators from the Orange County, Calif., District Attorney's office and charged with one felony count of grand theft by embezzlement. He faces up to four years in state prison if convicted. In a stipulation reached on Dec. 20 with the State Bar of California, McAneny admitted that he misappropriated the funds he was holding for Deborah Slaybaugh, whom he represented in 2007 and 2008 in a case regarding her deceased husband's life insurance policy. Instead of depositing settlement money into a client trust account, McAneny wrote checks to himself against the funds during the last six months of 2008. McAneny did not return a call for comment. According to the stipulation, McAneny's law practice was suffering from "severe financial stress" at the time he took the money. "The general hard economic times for lawyers resulted in Respondent having a number of significant and uncollectable accounts receivable," the stipulation says. "At the same time, his financial obligations both to his own wife, son and daughter, and the other attorneys he shared an office with, stayed the same or increased." Under the stipulation agreement, McAneny admitted to three acts of professional misconduct: misappropriation, failure to maintain client funds in trust and failure to promptly pay a client the funds to which she was entitled. The State Bar of California is moving to take over McAneny's practice and freeze his accounts, and McAneny has agreed to pay restitution to Slaybaugh. McAneny, who was admitted to practice law in California in 1977, was suspended in 1993 for 90 days and put on one year of probation after admitting that he deposited $15,000 in client funds into his own personal bank account. He repaid the client $19,500, which includes interest.

Friday, December 24, 2010

Another Sad New York Legal Legacy

NY Lawyer Bests His Suspended Dad in "Greek Tragedy" Courtroom Showdown
The New York Law Journal by Andrew Keshner - December 23, 2010

In what a Long Island judge said was "at its bitter core, a Greek tragedy," the son, who is a former associate of a suspended attorney, has convinced the court that his father is not entitled to $2,600 in unpaid rent from a subtenant who is now the son's partner. The suspended lawyer, Sheldon M. Krupnick, of Garden City, said in an interview after an unusual five-day small claims trial that he had not expected his son, Kevin P. Krupnick, to stand up against him in court, but noted that there had been previous problems between him and his son, whom he did not hesitate to call as an adverse witness. "Hannibal Lecter has a more paternal relationship with Clarice Starling than I have with Sheldon," acknowledged the son, who said he has been regarded as the "black sheep" by his father since his parents' divorce in the 1980s. District Court Judge Gary F. Knobel in Nassau County dismissed the elder Mr. Krupnick's pro se claims against his son's partner and client Jennifer Drossman in Krupnick v. Drossman, SC 02938-2009. He held that Ms. Drossman's agreement to pay rent had been with Sheldon Krupnick's now-inactive firm, and he could not sue her as an individual. The Appellate Division, Second Department, last year suspended the elder Mr. Krupnick for five years, effective July 30, 2009, finding that he had completed a blank deed signed seven years before, without the knowledge or consent of the signer, by notarizing the document and delivering it to an individual Mr. Krupnick knew was involved in litigation surrounding the deed. "Although the respondent's misconduct emanates from a single incident, it displays gross misjudgment," the appellate court noted in Matter of Krupnick, 65 AD 3d 291. The ruling also noted Mr. Krupnick had an "extensive disciplinary history," which included five letters of admonition and four letters of caution between 1981 and 2004. Ms. Drossman, who had worked as an associate for Sheldon Krupnick from 1998 to 2000, had been sharing space in his Mineola office since June 2006, paying $1,300 a month in rent. Kevin Krupnick had been an associate with his father until November 2008, when he started his own practice at the office. "It wasn't always bad, it just got bad at the end," Ms. Drossman said in an interview of her relationship with Sheldon Krupnick. After Mr. Krupnick was suspended, he continued to come to the office and Ms. Drossman became concerned that she and Kevin could be held liable if the father engaged in the unauthorized practice of law, according to the decision. So she and Kevin moved out. Ms. Drossman said she paid Mr. Krupnick $2,600 in rent for August and September, all in a credit for legal work Kevin had done for his father. Doreen Krupnick, Sheldon's ex-wife and Kevin's mother, testified at the trial that she had arranged a meeting among the parties in which an oral agreement had been reached. Sheldon Krupnick disputes that. Tensions came to a head during a Sept. 17 incident in the office parking lot. As Ms. Drossman and Kevin were packing up files and preparing to move, Sheldon Krupnick came to the office and allegedly attempted to remove files. Ms. Drossman contacted the police and Adrienne Flipse Hausch, a Mineola attorney who is a member of the Second Department's committee on character and fitness. Ms. Hausch, who testified at the small claims trial, instructed police to prevent the father from taking the files, and he left without them.The elder Mr. Krupnick denied in an interview that he had been practicing law, saying that he was not meeting clients or going to court. Rather, he said the files were needed for the arbitration of fees, in previous cases, including one for which he was owed more than $28,000. "All I was doing at the office was getting stuff out of there," he said. Ms. Drossman and the son packed up the rest of their offices that day and worked from their homes before renting space for their Drossman-Krupnick Legal Group in Glen Cove. Sheldon Krupnick sued for back rent.Judge Knobel ruled that the father did not have the standing to bring the suit. "The right to enforce the oral sublease belongs to the plaintiff's former law firm, The Law Offices of Sheldon Martin Krupnick, P.C., since that entity entered into a lease with the landlord for the use of the Suite," the judge held. "The plaintiff acted on behalf of that professional services corporation and could not sublease what he, as an individual, did not lease. In an interview, Mr. Krupnick said he thought the decision would allow him to sue Ms. Drossman again under a corporate name, but did not know if he would appeal. "It doesn't seem monetarily worthwhile," he said. In any case, the elder Mr. Krupnick said his firm no longer exists because he retired after he was suspended. He said he is now working on his real estate investments and does not know if he will resume practice once his suspension is complete. Kevin Krupnick said that the ruling was "appropriate." He added that he had had no problem facing off against his father. "It would have been more difficult for me not [to take the case]. I felt there was a duty there to protect [Ms. Drossman]," he said. "There was a duty to protect the lamb from the wolf." The judge said he would send a record of the proceedings to disciplinary authorities. "Though the amounts sought in damages are small, the claims asserted in this action are by no means 'small' in terms of the seriousness of the legal and ethical allegations," he wrote. Andrew Keshner can be contacted at

Thursday, December 23, 2010

Connected Attorney Arrested for Sexual Assault

Suspended Montrose County DA Serra arrested again
The Daily Sentinel by Rachel Sauer - December 22, 2010

Seventh Judicial District Attorney Myrl Serra was arrested again Wednesday, this time on allegations of harassment, protection-order violation and violating bond conditions, a felony. The Colorado Bureau of Investigation, which is conducting the investigation, accuses Serra of contacting at least one of his three accusers in an ongoing sexual assault investigation against him. “He violated his bond agreement,” CBI Agent in Charge Collin Reese said Wednesday evening. “Originally, when he was first arrested, he had imposed on him a condition for his bond, and he also had a protection order imposed, and he violated those agreements. That’s why he was arrested today.” Serra first was arrested Sept. 30 on suspicion of unlawful sexual contact, official misconduct and indecent exposure. In November, he was charged with criminal extortion, unlawful sexual contact, three counts of indecent exposure, official misconduct and unlawful sexual contact. He is accused of victimizing several women who worked in the 7th Judicial District offices. A condition of his bond in that case, in which the preliminary hearing is set for Feb. 11, prohibits him from contacting his accusers or any witnesses in the case against him, or from entering 7th Judicial District offices. The Montrose Police Department arrested Serra on Wednesday, but declined to comment on the case because it is a CBI investigation. Serra was released on bond Wednesday evening. Montrose attorney Dan Hotsenpiller will take over as interim 7th Judicial District Attorney in January. Currently, the office is being run by Colorado First Assistant Attorney General Jean Woodford.

Wednesday, December 22, 2010

Lawyers Get Pass in Fraud; Nonprosecution Payment Over $500 Million

Deutsche Bank to pay over $550M in fraud probe
The New York Post - December 21, 2010

Deutsche Bank admitted criminal wrongdoing and agreed to pay more than $550 million in connection with its participation in tax shelters that enabled the rich to avoid paying hundreds of millions of dollars in U.S. taxes, authorities announced Tuesday. Federal prosecutors and the Justice Department’s tax division announced the deal, saying a nonprosecution agreement requires the bank to continue cooperating and to submit to the appointment of an independent expert who will review its compliance measures and ensure it does not help people dodge taxes in the future. Authorities said the $533,633,153 payment by the bank will include that amount of taxes and interest that the Internal Revenue Service was unable to collect from taxpayers from 1996 to 2002 because of the misconduct. It also includes a civil penalty of more than $149 million. In a statement, Deutsche Bank said it was pleased that the investigation had been resolved. “Since 2002, the bank has significantly strengthened its policies and procedures as part of an ongoing effort to ensure strict adherence to the law and the highest standards of ethical conduct,” it said. The bank said the payment had already been accounted for and would not have any impact on current net income. Bank spokesman John Gallagher said the company had no additional comment. U.S. Attorney Preet Bharara said in a news release that the bank provided a detailed statement of facts describing its wrongful conduct. The nonprosecution agreement bans the bank from involvement with any prepackaged tax products of the type the bank had previously offered, according to the release.

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Tuesday, December 21, 2010

Corrupt NJ Judge Needs to Move to Corrupt New York

Judge faces ethics complaint
The Burlington County Times by Danielle Camilli - November 14, 2010

TRENTON, NJ - A former Mount Laurel municipal court judge, who still sits on the Delanco and Palmyra benches, is facing an ethics complaint that alleges he was partial to the state in a drunken driving case he presided over in 2008. The New Jersey Supreme Court Advisory Committee on Judicial Conduct filed a complaint against Judge Gregory R. McCloskey of Moorestown earlier this month. McCloskey has served in a handful of county towns as an appointed municipal judge over the years. He resigned his position in Mount Laurel at the beginning of this year, according to the complaint. McCloskey did not return a phone call placed last week for comment. The complaint alleged that McCloskey violated the Code of Judicial Conduct when at the end of the second day of a trial, he had a conversation with the municipal prosecutor outside the presence of defense counsel, known as ex parte communication. He engaged in conversation about the case and directed the prosecutor to ask certain questions of a witness concerning issues related to the state's case and critical of the defense, according to the complaint. The defendant and his attorney had left the courtroom when the conversation occurred. They did not learn about the discussion until after McCloskey found the man guilty of driving under the influence and refusing to take a breath test. The conversation, which was captured on the record, was revealed in transcripts the defense ordered in preparation for an appeal. The state Superior Court in Burlington County, hearing the appeal, remanded the case back to McCloskey, allowing the defendant to file a motion for a new trial. The judge denied the new trial, but did acknowledge on the record his part in the "impermissible ex parte" communication, according to the complaint. McCloskey further acknowledged that the conversation "revealed his thought process on salient issues in the case, including issues pertinent to the defense." On appeal, the defendant was granted a new trial before a different municipal judge and prosecutor after the Superior Court found that the ex parte communication denied him his constitutional right to a fair trial. The court also found that the judge's direction to the prosecutor demonstrated "partiality to the state ... and an interest in the outcome of the proceeding. That conduct cannot be permitted," the complaint reads, quoting from the Superior Court ruling. The court referred the matter to the Advisory Committee, which filed the formal complaint. McCloskey, an attorney since 1977, can respond to the complaint and a formal hearing could be held. If the committee finds the complaint is proved by clear and convincing evidence, it could recommend a public reprimand, censure, suspension or removal from the bench. Also, it could recommend that the complaint be dismissed and that no action be taken. Danielle Camilli can be reached at 609-267-7586 or

Monday, December 20, 2010

More Legal System Driven Holocaust Scams Revealed

Holocaust survivor scam nets $42.5 million, 17 charged in swindle: prosecutors
The New York Daily News by Robert Gearty - December 9, 2010

Seventeen people were accused yesterday of stealing $42.5 million from Holocaust survivor funds by ghoulishly recruiting phony Nazi victims. Six of the alleged scam artists worked for the Conference on Jewish Material Claims Against Germany and helped orchestrate 5,500 bogus applications over 16 years. prosecutors charged. "If ever there was a cause that you would hope and expect would be immune from base greed and criminal fraud, it would be the Claims Conference," said ManhattanU.S. Attorney Preet Bharara.

The conference administers funds to those who fled

Nazi persecution or survived concentration camps. Among those charged was Semyon Domnitser, a former director of the conference who was fired last February. Officials said the scam operated by creating phony applications with false birth dates and invented histories of persecution to process compensation claims. In some cases the recipients were born after World War II and at least one person was not even Jewish. When a phony applicant got a check, the scammers were given a cut, Bharara said. Many of the applicants were recruited from Brooklyn's Russian community, prosecutors said. All those charged hail from Brooklyn. Four have pleaded guilty and are cooperating, officials said. The Claims Conference contacted the FBI in December 2009 when it suspected the funds were being looted. "It's disgusting that anyone would steal under these conditions," said the Claims Conference VP Greg Schneider. He said the fraud went undetected despite regular audits. "They were very good at creating fraudulent documents," he said, noting less than 1% of money distributed was stolen. One of the funds provides one-time payments of $3,600 to Jews who fled the Nazis. The other provides $411-a-month to poor Jews who spent time in a concentration camp, Jewish ghetto, or had to assume a false name to elude capture. Funding comes from the German government and more than 600,000 claims have been processed worldwide.

17 charged in $42 million Holocaust fraud case
FBI: Defendants pretended to be victims of Nazi persecution so they could collect money from a reparations fund
NBC NEWS by Pete Williams and Jonathan Dienst - December 9, 2010

NEW YORK — Federal prosecutors said Tuesday they have broken up a long-running scam in which people falsely claimed to be victims of the Nazi persecution so they could get money out of a fund that pays Holocaust reparations. The target of the scam, the FBI said, was the Conference on Jewish Material Claims against Germany, an organization that secures compensation for Jewish victims of Nazi persecution and negotiates for the return and restitution of Jewish-owned properties and assets confiscated or destroyed by the Nazis. Seventeen people have been charged with participating in the fraud, including six employees of the organization's office in New York. The employees recruited people for whom they helped submit phony claims, then sought a kickback for what was paid out, according to the FBI. The amount of the fraud, the Justice Department said, totaled more than $42 million for more than 5,500 false claims against two programs. One program paid $3,600 to Jewish survivors who fled the Nazis and became refugees. The other was for Jews who were held in labor or concentration camps or who were in hiding in Jewish ghettos established by the Nazis. "Each of the defendants played a role in creating, filing and processing fraudulent claims on behalf of non-qualifying applicants — and dividing up the spoils," FBI Assistant Director-in-Charge Janice K. Fedarcyk said in a statement. "Funds established and financed by the German government to aid Holocaust survivors were siphoned off by the greedy, and not paid out, as intended, to the worthy." "If ever there was a cause that you would hope and expect would be immune from base greed and criminal fraud, it would be the Claims Conference, which every day assists thousands of poor and elderly victims of Nazi persecution," Manhattan U.S. Attorney Preet Bharara added. "Sadly, those victim funds were themselves victimized." The FBI said the scheme came to light in December 2009 when other employees of the Claims Conference became suspicious. Four of the 17 defendants have pleaded guilty to participating in the scam, federal prosecutors said. All the defendants are charged with conspiracy to commit mail fraud; some face additional counts of money laundering and witness tampering. NBC News' Pete Williams and Jonathan Dienst contributed to this story.


Sunday, December 19, 2010

The Judiciary May Be The Most Important Instrument For Change

Justices Offer Receptive Ear to Business Interests
The New York Times by ADAM LIPTAK - December 18, 2010

WASHINGTON, DC — Almost 40 years ago, a Virginia lawyer named Lewis F. Powell Jr. warned that the nation’s free enterprise system was under attack. He urged the U.S. Chamber of Commerce to assemble “a highly competent staff of lawyers” and retain outside counsel “of national standing and reputation” to appear before the Supreme Court and advance the interests of American business. “Under our constitutional system, especially with an activist-minded Supreme Court,” he wrote, “the judiciary may be the most important instrument for social, economic and political change.” Mr. Powell, who joined the Supreme Court a year later in 1972 and died in 1998, got his wish — and never more so than with the court led by Chief Justice John G. Roberts Jr. The chamber now files briefs in most major business cases. The side it supported in the last term won 13 of 16 cases. Six of those were decided with a majority vote of five justices, and five of those decisions favored the chamber’s side. One of the them was Citizens United, in which the chamber successfully urged the court to guarantee what it called “free corporate speech” by lifting restrictions on campaign spending. The chamber’s success rate is but one indication of the Roberts court’s leanings on business issues. A new study, prepared for The New York Times by scholars at Northwestern University and the University of Chicago, analyzed some 1,450 decisions since 1953. It showed that the percentage of business cases on the Supreme Court docket has grown in the Roberts years, as has the percentage of cases won by business interests. The Roberts court, which has completed five terms, ruled for business interests 61 percent of the time, compared with 46 percent in the last five years of the court led by Chief Justice William H. Rehnquist, who died in 2005, and 42 percent by all courts since 1953. Those differences are statistically significant, the study found. It was prepared by Lee Epstein, a political scientist at Northwestern’s law school; William M. Landes, an economist at the University of Chicago; and Judge Richard A. Posner, who serves on the federal appeals court in Chicago and teaches law at the University of Chicago. The Roberts court’s engagement with business issues has risen along with the emergence of a breed of lawyers specializing in Supreme Court advocacy, many of them veterans of the United States solicitor general’s office, which represents the federal government in the court. These specialists have been extraordinarily successful, both in persuading the court to hear business cases and to rule in favor of their clients. The Supreme Court’s business docket has stayed active in the current term, which began in October. In a single week this month, the court heard arguments in a case brought by the chamber challenging an Arizona law that imposes penalties on companies that hire illegal workers, and it agreed to hear two cases that could reshape class-action and environmental law. The chamber had urged the court to hear both cases. It said one of them, an enormous sex-discrimination class-action lawsuit against Wal-Mart, posed “grave risks for American business.” It said the other, a suit by eight states against power companies over carbon dioxide emissions, “has potentially disastrous implications for the U.S. business community.” The court’s docket is studded with other important business cases as well, including ones concerning consumer class-action suits and claims of employment discrimination and securities fraud. The chamber has filed supporting briefs in all of them. In AT&T Mobility v. Concepcion, for instance, the chamber urged the court to allow companies to use standard-form contracts that in essence forbid consumers who sign them from pursuing class-action suits. In Thompson v. North American Stainless, the chamber asked the court to forbid some employment discrimination claims, saying that “it costs, on average, over $120,000 just to defend a wrongful-discharge claim.” Next month, the court will hear arguments in 11 cases. The chamber says it will file briefs in seven of them.

The Chamber’s Success

The Chamber of Commerce spent tens of millions of dollars in the recent midterm elections, mostly to help Republican candidates. It says that it has 300,000 members, businesses and organizations “of every size, sector and region,” and that its spending furthered the interests of some three million businesses, most of them small ones. But the chamber’s mission is by no means limited to the elected branches of government. “A central function of the chamber,” it told the Supreme Court in a recent brief, “is to represent the interests of its members in important matters before the courts.” The vehicle for that is the litigation unit that was envisioned by Mr. Powell, the National Chamber Litigation Center, which says it is “the voice of business in the courts on issues of national concern to the business community.” Its board includes executives from some of the nation’s biggest companies, including Ford, Verizon, Lockheed Martin, Viacom and GlaxoSmithKline. On the center’s 30th anniversary in 2007, Carter G. Phillips, who often represents the chamber and has argued more Supreme Court cases than any active lawyer in private practice, reflected on its influence. “I know from personal experience that the chamber’s support carries significant weight with the justices,” he wrote. “Except for the solicitor general representing the United States, no single entity has more influence on what cases the Supreme Court decides and how it decides them than the National Chamber Litigation Center.” A study prepared by the Constitutional Accountability Center, a liberal group, examined the center’s success rate in the Supreme Court. It found that the positions supported by the chamber prevailed 68 percent of the time in the Roberts court, compared with 56 percent in the last 11 years of the Rehnquist court, a period without changes in the court’s membership. Robin S. Conrad, executive vice president of the chamber’s litigation unit, said the center’s analysis was flattering but superficial, and she questioned its comparisons. The chamber does not participate in all business cases, she said. The mix of cases before the court has changed over time. And the chamber has become more active. But Ms. Conrad acknowledged her group’s exceptional track record. “Why have we been successful?” she asked. “I’d like to think it’s because of the quality of the arguments and the briefs we present to the court.” “The court is looking for reliable voices to confirm its decisions, and I’d like to think it’s looking to the chamber because it tells a straight story, and we try not to be shrill or ideological,” Ms. Conrad said. “The chamber has earned a reputation for being a credible voice of business.”

Doug Kendall, president of the Constitutional Accountability Center, drew a different conclusion, saying the numbers proved that the Roberts court increasingly sided with corporate interests. He also said the study documented “a sharp ideological divide that did not exist before 2005.” In the last 11 terms of the Rehnquist court, the five more conservative justices voted for the chamber’s position 61 percent of the time, while the four more liberal justices voted for it 48 percent of the time. In the first five terms of the Roberts court, the corresponding bloc of five more conservative justices voted for the chamber’s position 74 percent of the time, and the four more liberal justices 43 percent of the time. But counting votes is not the same thing as assessing results, Ms. Conrad said. “Our research has shown that the vast majority of business decisions are decided by a lopsided majority of 7 to 2 or more,” she said. Over the Roberts court’s first five terms, Ms. Conrad said, only 10 percent of the business docket was decided by the classic 5-to-4 split, with Justice Anthony M. Kennedy joining the court’s four more conservative members in the majority. The idea that the Supreme Court reflexively rules for the chamber and other business interests is too simplistic, many legal scholars and practitioners say. If the court favors business, they say, it is as part of a broader orientation toward free markets and a wariness of many kinds of lawsuits. “The Roberts court appears to be a mainstream, traditional, modern Republican, conservative court,” said Bradley W. Joondeph, a law professor at Santa Clara University and a former law clerk to Justice Sandra Day O’Connor. “Part of its constellation of commitments is against the regulation of business and, in particular, the regulation of business through litigation.” A prominent Supreme Court advocate who often represents businesses, Maureen E. Mahoney, chose her words carefully when asked at a chamber news briefing in September whether the Roberts court was especially receptive to the kinds of arguments pressed by corporations. “The best court for getting a fair hearing on those issues,” she said, “is the Supreme Court.”

Government Experience

An additional explanation for the recent successes of business interests in the Supreme Court may lie in the rise of specialized practice groups at major law firms led by veterans of the solicitor general’s office. Turning service as United States solicitor general into a career at a commercial firm is a relatively new phenomenon, according to a recent article by Matthew L. Sundquist in The Charleston Law Review. From 1952 to 1981, he wrote, former solicitors general usually became judges, joined law schools or worked as public servants. In the next 15 years, they split their time between academic and legal work, often consulting with law firms with specialized Supreme Court practices. Starting in 1996, every former solicitor general, with one exception, has gone on to supervise a Supreme Court practice at a major law firm, earning as much as $5 million a year. The exception is Justice Elena Kagan, who joined the court in August. These specialists make their livings representing business interests, and they have used the skills they honed in government service to achieve notable successes in the Supreme Court. They had a particularly good run, for instance, in environmental cases in the term that ended in 2009. “For the first time, a series of industry clients last term turned repeatedly to the expert Supreme Court bar for assistance in a host of cases arising under federal pollution control laws,” Richard J. Lazarus, a law professor at Georgetown, wrote in The Yale Law Journal Online last February. “The result was palpable and formed the basis of the best term that industry has ever enjoyed before the court in environmental cases.” Among these lawyers were some of the most prominent members of the specialized Supreme Court bar. Though the odds of obtaining Supreme Court review are about one in 100, these lawyers persuaded the court to hear four cases that “would not have seemed to have a remote chance of review,” Professor Lazarus wrote. They won every time.

In one of the cases, Theodore B. Olson, who had served as solicitor general in the administration of President George W. Bush, persuaded the court not only to hear the case but also to rule for his client, making it easier to dump mining waste into an Alaskan lake. In another big environmental case, Miguel A. Estrada, also a veteran of the solicitor general’s office, persuaded the Supreme Court not to hear a case, though the lower courts were split on the question it presented and the federal government had implored the justices to resolve it. Mr. Estrada’s client, McWane Inc., a pipe manufacturer in Alabama, had been convicted of discharging untreated industrial pollutants into a creek. An appeals court threw out the conviction and a $5 million fine, saying the creek was not covered by the Clean Water Act. Mr. Estrada’s skill in persuading the court to let that decision stand was the term’s coup de grĂ¢ce, Professor Lazarus wrote. But a broader look at the Roberts court’s environmental cases by Jonathan H. Adler, a law professor at Case Western Reserve University, found no pro-business trend. “The Roberts court’s environmental decisions issued to date suggest neither a disposition toward business nor a hostility toward environmental regulation,” Professor Adler wrote in his article, published last year in The Santa Clara Law Review. “The ‘pro-business’ position has prevailed in some cases, and lost in others. If the relative magnitude of the cases is taken into account, it is even more difficult to argue that the Roberts court has been ‘pro-business’ in this area.”

There has been less dispute about the victories business groups have recently enjoyed in other areas of the law. David L. Franklin, a law professor at DePaul University, wrote in another article in The Santa Clara Law Review last year that the chamber had been quite successful in the Roberts court in four of what he considered five main categories of cases — punitive damages, arbitration of consumer and other disputes, the standards for early dismissal of lawsuits, and federal pre-emption of state laws governing injury and other suits. The “conspicuous exception,” he said, was employment discrimination. The numbers support Professor Franklin’s conclusions, but they are small and not statistically significant. Even in employment discrimination cases, however, the available numbers are subject to two interpretations. True, the Roberts court’s 16 decisions have been evenly divided, according to an analysis by Professor Epstein at Northwestern. But the Rehnquist court ruled in favor of people claiming discrimination more often — 64 percent of the time. All of this is to say that determining whether the Supreme Court is “pro-business” or “anti-business” can be difficult. There will always be exceptions.

“The story of a conservative, activist, pro-corporatist Roberts court may sound compelling at first blush, particularly with its repetition and regrettable distortion of the cases involved, but it is just a story — and a fictional one at that,” Robert Alt, a lawyer with the Heritage Foundation, a conservative group, testified at Justice Kagan’s confirmation hearings last summer. He listed several major cases in which the Roberts court had ruled against business interests, including a drug maker and a tobacco company. He also noted that some of the court’s more important pro-business cases, including ones casting doubt on the conviction of an Enron executive and cutting the punitive damages in the Exxon Valdez oil spill, were written by liberal justices. It is clear, though, that the Supreme Court these days is increasingly focused on business issues. “The fraction of business cases on the docket has grown from 21 percent in the last five years of the Rehnquist court to 27 percent during the Roberts years,” Professor Epstein said. “This isn’t a small jump.” Ms. Conrad, of the chamber, said part of her group’s role was to keep its agenda before a court that is deciding about half as many cases as it did in the 1980s. One way to do that, she said, is by filing briefs urging the court to hear particular cases, an effort that is ordinarily a 1-in-100 long shot. But the chamber has succeeded about 30 percent of the time in persuading the Roberts court to take its cases, Ms. Conrad said. “There has been a return on investment, not to sound too crass,” she said.

Saturday, December 18, 2010

Lawyer Charged With Stealing From Clients Arrested Again

Lawyer charged with stealing from clients rearrested for theft
The Journal News COMPLETELY LEGAL BLOG by Rebecca Baker - December 17, 2010

A Westchester County real estate lawyer who was charged in August with stealing more than $80,000 from a client is now accused of stealing $120,000 from two other clients. Bruce Mogavero, 54, of Eastchester was rearrested and arraigned in Yonkers City Court today on two additional felony counts of second-degree grand larceny, according to the Westchester County District Attorney’s office. Mogavero, whose office is on Xavier Drive in Yonkers, is accused of stealing $50,000 from an escrow account of a client he was representing in a divorce. The money came from a $455,000 check from a home sale in Tuckahoe that was supposed to stay in the escrow account until the divorce was settled. The theft allegedly happened between August 2008 and this April. Mogavero is also accused of stealing $70,000 from Wells Fargo bank, which had hired him as a settlement attorney for its bank branch in Bronxville, sometime between June 3 and August 19. Earlier this year, Mogavero was indicted for allegedly stealing $82,700 from a client who was selling an apartment in Yonkers. Prosecutors say he stole the money between March 1 and July 1 while representing a man selling his apartment at 485 Bronx River Road. Mogavero was released without bail following his arraignment this morning and is due back in court Jan. 12. He faces up to 15 years in state prison if convicted.

Friday, December 17, 2010

One Useful Tool for the Corrupt: The "Escrow Account"

Ex-Winston Attorney Charged With Laundering Fraud Proceeds
The New York Law Journal by Nate Raymond and Mark Hamblett - December 17, 2010

A former New York partner at Winston & Strawn, Jonathan S. Bristol, pleaded not guilty yesterday to charges of laundering more than $20 million through his escrow accounts in connection with an alleged multi-million dollar fraud run by Kenneth Starr, a financial advisor to celebrities. Mr. Bristol, who was a partner at Winston & Strawn until June, shortly after Mr. Starr's arrest, appeared before Southern District Magistrate Judge Henry Pittman. He was released on his signature but must post a $1 million personal recognizance bond co-signed by three financially responsible parties within a week. One condition for his release is that he undergo a mental health evaluation. Mr. Bristol appeared with his attorney, Gerard Hanlon of Hanlon Dunn & Robertson of Morristown, N.J. Mr. Hanlon said after the arraignment that Mr. Bristol met with prosecutors two months ago but only became aware last month that he was a probe target. "Mr. Bristol is a good man and I'm hoping we can do well by him," Mr. Hanlon said. "It was a difficult day for him and I hope we can reach a good and fair resolution." A conference is scheduled for Monday at 10 a.m. before Southern District Judge Deborah A. Batts. Also yesterday, the Securities and Exchange Commission accused Mr. Bristol of aiding and abetting Mr. Starr's fraud through the misuse of his attorney trust accounts. "Bristol had a legal and professional responsibility not to assist Ken Starr in conduct that he knew was unlawful," George S. Canellos, director of the SEC's New York regional office, said in a statement. "Bristol crossed the line from lawyer to conspirator when he failed to safeguard funds entrusted to him, helped Starr steal client money, and lied to the victims to perpetuate the scheme." The SEC and the Southern District U.S. Attorneys Office are seeking the forfeiture of Mr. Bristol's property, including $20 million.

Prosecutors in May charged Mr. Starr with stealing at least $30 million from clients. His clientele reportedly included actors Sylvester Stallone, Wesley Snipes and Uma Thurman and director Martin Scorsese. Mr. Starr, a non-practicing attorney, pleaded guilty in September and admitted to losing $20 million to $50 million of his clients' funds. Mr. Bristol served as counsel to Mr. Starr and his financial firms since at least 2007, according to the SEC. Mr. Bristol allowed Mr. Starr to use his attorney trust accounts as a conduit, sending the stolen monies to Mr. Starr despite knowing they belonged to clients, the SEC complaint said. It claims that more than $25 million of Mr. Starr's clients' funds went through attorney trust accounts controlled by Mr. Bristol. Mr. Bristol never disclosed to Winston & Strawn the existence of the accounts, the SEC said. Mail for the accounts was sent to Mr. Bristol's home address. Winston & Strawn is not named in either the indictment or the complaint. But the firm confirmed it had employed Mr. Bristol, "who is no longer with us," a statement said. "The indictment against him is based on alleged conduct neither authorized by nor known to others at the firm," Winston & Strawn said in the statement. "The firm is cooperating fully with the authorities investigating this matter."

Mr. Bristol, a graduate of the University of Virginia Law School, joined Winston & Strawn along with 18 other lawyers in November 2008 following the collapse of Thelen. Winston initially promised to pay Mr. Bristol, a business and finance partner, $1.35 million for his first full two years, the indictment said. But his practice "was much less lucrative than expected," according to the U.S. attorney's indictment, and Mr. Bristol agreed in August 2009 to reduce his compensation to $500,000 plus a bonus if he hit certain thresholds. It was around this time that Mr. Bristol brought in new business from Mr. Starr, business the indictment said would be "important to his compensation" at Winston. Mr. Starr hired Mr. Bristol and Winston to represent him in an investigation by the SEC. Mr. Starr also had hired Mr. Bristol for a dispute with one of his clients regarding an improper investment. Mr. Bristol at the time knew Mr. Starr was engaged in illegal activity, the indictment said.

Winston & Strawn billed more than $1 million for the work, which was important to Mr. Bristol "during an otherwise difficult legal market," the SEC complaint said. But Mr. Starr did not timely pay his bills. After Winston & Strawn pressured Mr. Bristol in February 2010 to collect on unpaid fees, a $100,000 check arrived, according to the federal indictment. The funds were not from Mr. Starr but was money laundered through the escrow accounts, federal authorities said. Mr. Bristol frequently allowed Mr. Starr to use his attorney trust accounts as conduits to steal client money, federal authorities said. Mr. Bristol in late 2009 allowed Mr. Starr to divert $1.15 million from two Starr client accounts to one of Mr. Bristol's escrow accounts. Mr. Bristol then transferred the funds to a Starr & Company bank account. In 2009, Mr. Starr entered into a $4 million settlement with a former client. To pay the settlement, Mr. Starr in January 2010 stole money from existing clients, including an unnamed ex-talent agency executive and a film producer. The funds were wired into Mr. Bristol's escrow account, and he in turn wired them to the former client. Mr. Bristol knew the source of the funds, the indictment said. The talent executive in March learned $1 million had been transferred out of his or her account. When the executive reached Mr. Bristol, he claimed the money was being bundled with four other investors for a larger $5 million investment, the indictment said. Mr. Bristol also used the escrow accounts in February 2010 to assist Mr. Starr's theft of $1.5 million from the account of the wealthy ex-wife of a businessman to cover operating expenses at Starr & Company, Mr. Starr's firm, according to the indictment.

In April 2010, Mr. Starr stole more than $7 million from four clients and forwarded the money to Mr. Bristol's escrow account, the indictment said. Mr. Bristol then allegedly transferred the money to complete Mr. Starr's purchase of an Upper East Side apartment. Shortly afterward, several of Mr. Starr's clients discovered he had misappropriated their funds. An unnamed actress reached out to Mr. Bristol complaining about $1 million taken out of her account without permission. Mr. Bristol allegedly replied that he thought the money belonged to Mr. Starr and promised to wire it back but that he would need to go to a New Jersey bank, claiming it was the fastest way. Mr. Starr then diverted $1 million from a different client's account to the escrow account. Mr. Bristol allegedly then wired the funds to the actress, the indictment said. Mr. Hanlon said after the arraignment, "With cases like this, you have to have the requisite knowledge to understand what was going on." Mr. Starr "must be one slick-talking smooth operator because he fooled a lot of people," he said. Speaking of his client's departure from Winston & Strawn, Mr. Hanlon said, "That's a good law firm. There's too much to be lost if you have a partner under a cloud." Mr. Canellos, a former partner at Milbank, Tweed, Hadley & McCloy, is overseeing the SEC's case against Mr. Bristol. Sanjay Wadhwa, Maureen Lewis, Timothy Casey, and Sandeep Satwalekar of the SEC's market abuse unit in New York are conducting the agency's ongoing investigation, while senior trial counsel Todd Brody is in charge of the civil litigation. Southern District Assistant U.S. Attorneys William Harrington, Michael Bosworth and Michael Lockard represents the prosecution. The criminal case before Judge Batts is United States v. Bristol, 10cr1239. The civil suit, Securities and Exchange Commission v. Starr, 10cv4270, is before Judge Sidney H. Stein. Nate Raymond can be contacted at Mark Hamblett can be contacted at

Thursday, December 16, 2010

US Court Corruption OK but Corrupting a Foreign Judiciary NG

In High-Stakes Litigation, Chevron Wins Bid to Depose Plaintiffs Lawyer on Alleged Misconduct
The New York Law Journal by Mark Hamblett - December 16, 2010

A federal appeals court yesterday upheld a judge's decision to order attorney Steven Donziger to submit to a deposition and produce documents in connection with his alleged manipulation of the judicial system in Ecuador during environmental litigation against Chevron. The U.S. Court of Appeals for the Second Circuit found no error by Southern District Judge Lewis A. Kaplan in orders he issued on Oct. 20 and Nov. 30 and later updated. Chevron alleges misconduct by Mr. Donziger in its effort to defeat a lawsuit brought by Ecuadorian plaintiffs seeking billions of dollars for the environmental contamination by Chevron's predecessor in Ecuador, Texaco, and prevail in an international arbitration case. The company claims, and Mr. Donziger denies, that he improperly influenced Ecuadorian officials and experts, and prodded authorities to seek criminal charges against two of the oil company's attorneys. Earlier this year, Judge Kaplan ordered the production of outtakes from "Crude," a documentary about the litigation by filmmaker Joseph Berlinger, and Chevron has used those outtakes to press its case that Mr. Donziger should hand over documents and be deposed. James E. Tyrrell, Jr. of Patton Boggs argued for the Ecuadorian plaintiffs seeking to block the document production and deposition. Bruce S. Kaplan of Friedman Kaplan Seiler & Adelman argued for Mr. Donziger. Randy Mastro of Gibson Dunn & Crutcher appeared for Chevron. Andres Rivero of Rivero Mestre appeared for one of the Ecuadorian attorneys, Rodrigo Perez Pallares, and Alan Vinegrad of Covington & Burling represented the other attorney, Ricardo Reis Veiga. The circuit panel that issued the summary order in In re Chevron Corp., 10-4341-cv; 10-4405-cv, included Second Circuit Judges Jose Cabranes and Denny Chin, and, sitting by designation, Eastern District Judge Edward Korman.

Wednesday, December 15, 2010

Why NY Judges Need A Pay Raise

Why NY judges need a pay raise
The New York Post OPINION by Stephen B. Meister - December 14, 2010

Gov. Paterson signed a law Friday that creates a special commission to set pay raises for New York's 1,300 judges. It's a step in the right direction -- but far from adequate. Let's face it: Judges in this state haven't seen a raise since 1999, yet the salaries proposed by the commission won't go into effect until April 2012. So the law effectively extends judges' 11-year pay freeze for more than another year. Yet New York can't maintain its status as the financial capital of the world unless it maintains its world-class judiciary. Judges protect the property and contract rights that form the basis of all financial transactions. To ensure a strong commercial sector, the state needs to instill confidence in the quality of judicial proceedings -- and proper compensation is essential to retain and attract top judicial talent. The pay rate now is downright unfair. Judges are borrowing against their pensions in record numbers just to make ends meet. Here are the gory details: New York Supreme Court justices now earn $136,700, far less than the $174,000 their federal counterparts make. At $136,700, our Supreme Court justices, who on average have 18 years of work experience, earn far less than the "going rate" for first-year associate attorneys at the city's top law firms -- now $160,000 (plus bonus). Had New York state judges' salaries merely kept pace with inflation over the last 11 years, today they'd be earning more than $179,000. And yet, state courts handle the vast majority of all criminal and civil cases -- more than all the federal courts in the country combined, a staggering 4.7 million last year. The gap between federal and state judicial pay used to be the other way around. In 1909, New York state judges earned nearly triple what federal judges did; as recently as in 1935, a New York state judge earned 2½ times as much as his federal counterpart. (New York's 1935 judicial salary of $25,000 is equivalent to nearly $400,000 today after adjusting for inflation.) It wasn't until 1990 that federal judges' pay surpassed that of New York state judges.

In 1975, the National Center for State Courts ranked New York first among the 50 states on judicial pay. Today, after adjusting for New York's high cost of living, its rank has dropped to 49th. Not surprising, the state's unionized public workers don't suffer these problems. More than 1,250 public-school administrators, including elementary-school principals, earn more than Supreme Court justices. More than 400 retired New York state workers (mostly teachers) receive pensions greater than the salaries paid to active Supreme Court justices. Many of those pensions are well over $200,000 a year, and many retirees receive annual pensions greater than the judges' 1999 pay. Teachers have gotten better raises even after retiring than judges who've continued to work. The situation is so bleak because state legislators have held judicial pay hostage to a host of unrelated political demands, ranging from their own pay to funding for charter schools and Off-Track Betting. The result has been a long-term pay freeze for judges. By now, it's been so long since they've gotten a raise that some judges resorted to suing the state. In February, our highest court, the Court of Appeals, ruled that lawmakers violated the state Constitution's Separation of Powers doctrine by refusing to consider judicial pay on the merits, thus threatening the judicial branch's co-equal and independent status. But the high court stopped short of ordering a specific raise. By freezing judicial pay, lawmakers have put New Yorkers' liberties and property and contract rights in jeopardy. They've inhibited the state's ability to attract and retain qualified judges. One activist judge, Brooklyn Supreme Court Justice Arthur Schack, himself a former teacher, even proposed having judges join the teachers union. That would denigrate the judiciary and isn't likely to happen, but it's hard to criticize Schack, given the preferential treatment our Legislature affords unionized state workers. Taking judicial pay out of the hands of lawmakers was the right move. But the solution is too little too late. Paying judges just a fraction of what we paid them in 1935 and having New York drop from first to 49th in state rankings on judicial pay undoubtedly means we will lose some of our best and brightest judges and fail to attract qualified new ones. At a minimum, judicial morale and productivity will suffer. Absent some dramatic change, New Yorkers will pay the price -- through job losses in the financial sector, congested dockets and delays and an overall erosion in the quality of the justice our courts have provided. Stephen B. Meister is a partner in Meister, Seelig and Fein, LLP.

Monday, December 13, 2010

1,646 New York Attorneys Suspended

1,646 NY Lawyers Are Suspended
The New York Law Journal by the Staff of the New York Law Journal - December 13, 2010

The Departmental Disciplinary Committee of the Appellate Division, First Department, has suspended lawyers whose last names begin with the letter L through Z for failure to file a biennial registration statement.

Peter Tom, Justice Presiding, Richard T. Andrias David B. Saxe David Friedman, Eugene Nardelli, Justices.
In the Matter of Attorneys Who Are in Violation of Judiciary Law Section 468-a: Departmental Disciplinary Committee for the First Judicial Department, Petitioner, Attorneys in Violation of Judiciary Law Section 468-a, Respondents.

M-3067 - Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Alan W. Friedberg, Chief Counsel, Departmental Disciplinary Committee, New York (Mady J. Edelstein, of counsel), for petitioner.
No appearances for respondents. Motion No. 3067 - June 14, 2010


PER CURIAM Section 468-a of the Judiciary Law requires every resident
and nonresident attorney admitted to practice in the State of New York to file a biennial registration statement with the administrative office of the courts. A biennial registration fee must be paid at the time the statement is filed. This registration statement, which is mailed every two years by the Office of Court Administration to every attorney so admitted, must be timely filed and the fee paid regardless of whether the attorney is actually engaged in the practice of law in New York or elsewhere. Attorneys who certify to the Chief Administrator of the Courts that they have retired from the practice of law are exempt from paying the registration fee at the time the statement is filed. Subdivision (5) of the statute provides further that “[n]oncompliance by an attorney with the provisions of this section and the rules promulgated hereunder shall constitute conduct prejudicial to the administration of justice and shall be referred to the appropriate appellate division of the supreme court for disciplinary action.” Pursuant to this provision, petitioner Departmental Disciplinary Committee seeks an order suspending from the practice of law certain attorneys (whose last name begins with the letters L through Z) who are in violation of the statute, in that they have failed to file the registration statement and pay the registration fee for one or more registration periods after due purported notification. This is another in a series of motions to suspend attorneys who have failed to file biennial registration statements with the Office of Court Administration. This Court has previously held that failure to register or re- register, and pay the biennial registration fee constitutes professional misconduct warranting discipline (see Matter of Pierini, 21 AD3d 42 [2005]). Since 1997 this Court has granted similar motions and suspended attorneys en masse for such failure to register or re-register, and pay the registration fee pursuant to Judiciary Law § 468-a (see Matter of Attorneys in Violation of Judiciary Law § 468-a, 257 AD2d 127 [1999]). The attorneys in question have been duly notified of their noncompliance and given an opportunity to cure their default. The Office of Court Administration mailed each of the defaulting attorneys a biennial registration form to their last known home address, a second notice to their last known business address, and a final notice to their home address. Attorneys who remained in default following these three notices were referred to the Disciplinary Committee. On October 31, 2008, this Court published notice in the New York Law Journal that the Disciplinary Committee would institute an omnibus disciplinary proceeding seeking immediate suspension from the practice of law against those attorneys who did not cure their default by November 24, 2008. Thereafter, a list of approximately 1700 attorneys who failed to submit satisfactory proof of registration and payment of fees was forwarded to the Committee. The Committee then filed its motion for service by publication of the notice of petition to suspend. Pursuant to the order of this Court entered May 27, 2010, which provided for service of the petition to suspend by publication in the New York Law Journal for five consecutive days, a list of the defaulting attorneys along with their last known business addresses or in the absence of a business address, the home address of the defaulting attorney, was so published commencing June 8, 2010. A notice was also posted on the Court’s website. The order further provided that attorneys on the default list may submit proof from the Office of Court Administration that they are in compliance with all the registration requirements (including payment of registration fees), and an explanation of their failure to respond to previous notifications of default, within thirty (30) days of the return date of the Notice of Petition, or they would be subject to a further order of the Court immediately suspending them from the practice of law in the State of New York. The attorneys who remain in noncompliance with Judiciary Law § 468-a despite the notification process described above are the subject of the Committee’s instant motion to suspend. No opposition has been filed. Accordingly, due to the continued failure to comply with the statute, petitioner’s motion to suspend such attorneys shall be granted to the extent of suspending those attorneys whose names are enumerated in the attached schedule from the practice of law in the State of New York, effective immediately. All concur. Orders filed.

Blog Archive

See Video of Senator John L. Sampson's 1st Hearing on Court 'Ethics' Corruption

The first hearing, held in Albany on June 8, 2009 hearing is on two videos:

               Video of 1st Hearing on Court 'Ethics' Corruption
               The June 8, 2009 hearing is on two videos:
               CLICK HERE TO SEE Part 1
               CLICK HERE TO SEE Part 2
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