Friday, December 28, 2012

Days From Retirement, Bronx Judge Dodges Bench Boot For Failure To Fire Estate Lawyer Subsequently Indicted By Feds For Allegedly Ripping Off Dead People; Majority Ruling A "Big Blank Check" For Future Fleecings: Dissent

In New York City, Reuters reports:

  • Bronx Surrogate Lee Holzman should be censured but not removed from office for failing to fire a lawyer in his court who charged estates hundreds of thousands of dollars in legal fees before performing any work, the state Commission on Judicial Conduct ruled on Tuesday.

    The commission filed charges against Holzman after Michael Lippman, the former counsel to the public administrator, was indicted in 2010 for stealing $300,000 in excess fees. Lippman has pleaded not guilty.

    The public administrator handles estates for which there is no designated heir, and its counsel is subject to oversight by the surrogate.

    The commission faulted Holzman for not firing Lippman upon learning that he violated court protocol and for failing to alert law enforcement and disciplinary authorities about his actions.

    "Instead, respondent failed to report Mr. Lippman's misconduct and permitted him to remain in a position of public trust for three years under an ill-conceived plan to repay the unauthorized monies he had collected, thereby putting the estates under his care at further risk and conveying the appearance of favoritism," the commission wrote in its decision. "Respondent's abdication of his ethical responsibilities, which was influenced by his long and close professional relationship with Mr. Lippman, constitutes serious misconduct."

    The commission, however, dismissed other charges of misconduct, including a claim that Holzman rubber-stamped Lippman's fee requests without proper documentation.

    Holzman, who has served as surrogate judge in the Bronx since 1988, is already set to leave the bench at year's end after reaching the mandatory retirement age of 70.

    Holzman's attorney, David Godosky, said Holzman had only done what he thought was best for the estates under his supervision.

    "Once the surrogate was informed of any departure of protocol, not a penny of harm occurred to any estate of the public administrator's office," he said.

    Holzman has 30 days to appeal the decision to the Court of Appeals. Godosky said a decision on whether to do so has not been made.

    In two dissenting opinions, three of the commission's 11 members said they would have gone further and recommended that Holzman be removed for his actions.

    In one dissent, Richard Emery faulted the majority for a punishment that "defies logic," given the findings.

    "Removal is the only sanction which is commensurate with respondent's uncontroverted, sustained, self-aggrandizing misconduct," he wrote. "And that is because it is clear that respondent's three-year cover-up of the criminal acts of his appointee and long-time colleague was actually an attempt to protect himself from scandal and cover up his own misconduct."(1)

    The commission's counsel, Robert Tembeckjian, had pushed for Holzman's removal from the bench despite his retirement plans.

    "I believed removal from office was the appropriate result based on the judge's egregious misconduct," he said in a statement following the ruling.

    In Tuesday's decision, the commission largely accepted Shea's findings that other charges of misconduct should be dismissed, including the claim that Holzman broke the law by routinely approving a 6 percent fee based on "boilerplate" documents with insufficient detail about the work Lippman was supposedly doing.

    Shea noted that other surrogates often did the same thing and that Holzman should not be held responsible for following what had become standard procedure, even though it might technically violate state law.

    The 6 percent fee is intended to be a maximum fee for public administrators under state guidelines but has become the default payment in almost all cases, Shea said.

    In a dissenting opinion joined by Thomas Klonick, Nina Moore found that charge should have been sustained in order to establish that the 6 percent figure should not be abused.

    Noting that the Bronx administrator's office handles tens of millions of dollars in estates at any given moment, the majority's ruling "gives a blank check to counsels to the Public Administrators," Moore wrote. "It is in all likelihood a big blank check."

    A Bronx civil court judge, Nelida Malave-Gonzalez, won the election for Holzman's seat in November and will take office after his retirement.(2)
For the story, see Bronx Surrogate Holzman faces censure but escapes removal in misconduct case.

For the ruling of the New York State Commission on Judicial Conduct, see In re Holzman.

Go here for other posts on the sanctioned grave-robbing of people who die without wills in New York City and elsewhere.
  • Cover-ups, as we have come to learn, in many walks of life are often more egregious than the substantive offenses being concealed. But for a judge to protect himself by covering for an appointee he supervised is a particularly grievous assault on the majesty of the judiciary. It is equivalent, in my view, to corruption.

    In this case, respondent's misconduct was worse than a simple cover-up. It was compounded by his bizarre scheme to have Lippman handle estate funds after 2006, when it was discovered that he had systematically taken fees that he had not earned. By constructing this scheme that allowed Lippman to continue earning fees for years - ostensibly to pay back what he had stolen but really to avoid the scandal of thefts by his appointee on his watch - respondent enabled a continuing fraud. It is as if the United States attorney's office told Madoff when his Ponzi scheme was discovered, "Keep the investments going so that what you make in the market can be returned to your victims."

    Remember, even if Lippman had been fired in 2006, he would have been responsible for repaying the monies he owed. Respondent has no excuse or justification for secretly helping him repay those monies - especially by retaining him in a position of trust. In effect, respondent was imposing on future estates a person whom he knew could not be trusted. And he told no one other than his trusted insiders, even while he knew law enforcement agencies were breathing down Lippman's proverbial neck.

    Respondent knew that as long as he kept his secret scheme in-house, the scandal in his court would not be revealed. He knew better than anyone that Lippman's victims were virtually all intestate estates where the beneficiaries had no one to look to for oversight other than the judge (respondent) who is the sole "disinterested" repository of trust and accountability in the system of public administration. Instead of carrying out his sworn duty, he hid the truth from the victims by not disclosing Lippman's dishonesty and not reporting Lippman to the law enforcement agencies that were engaged in ongoing active investigations, or to disciplinary authorities with oversight over attorney malfeasance.

    As we all know, it is all too common for disciplinary committees to disbar attorneys for misuse of client funds. Knowingly enabling that conduct is no less culpable.
(2) For more on the problem of bad judges -- judges and magistrates who are incompetent, self-indulgent, abusive, corrupt, see (appropriately named): Bad Judges, by New York University Law Professor Geoffrey P. Miller.

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