Ah if Charles Dickens was alive would his subjects be these men? Lawyers are the reason we have well what we have. Their obsession and adversarial nature has led to a corruption of procedure and process – from elections to worker’s safety.
Perhaps Dr Suess could come up with a new book – I Am a Crook, I know I am.
Enjoy the tales of these two lawyers, I only hope more will follow.
A Manhattan Lawyer’s Slip and Fall
By BENJAMIN WEISER
THE NEW YORK TIMES
MAY 21, 2016
Stuart A. Schlesinger spent half a century building a reputation and a practice as a personal injury lawyer in New York, representing clients in lawsuits and negotiating settlements on their behalf. But when he appeared recently before a federal judge in Manhattan, he found himself in an unfamiliar position for a lawyer: He was the defendant.
Mr. Schlesinger, 76, had been arrested on a fraud charge in one of the more brazen schemes in the annals of New York law: He settled lawsuits on behalf of clients, sometimes for $1 million or more, and then simply kept much of the money for himself.
When his clients complained that they had not received the proceeds of their settlements, Mr. Schlesinger responded with a litany of excuses. “We are short-staffed,” he said in an email to one client, Kenneth Lawler, a British man who was owed more than $900,000 from the settlement of a medical malpractice lawsuit stemming from the death of his son in a New Jersey hospital. “Our phones and computer systems were down,” Mr. Schlesinger wrote in another email to Mr. Lawler. “Sorry for the delay,” he said in a third email, adding strangely, “Waiting for our golf game.”
Mr. Lawler, 63, said that now, four years after the settlement was reached, he had not yet received a penny. “It’s a betrayal,” he said.
That day in Federal District Court in Manhattan two weeks ago, Mr. Schlesinger admitted to the judge, William H. Pauley III, that he had improperly withheld money from settlements since 2008 and had used it for his personal benefit.
When the judge asked how much money he had taken, he replied, “Approximately $5 million.”
Several former clients watched silently in the courtroom as Mr. Schlesinger pleaded guilty to the fraud charge, which carries a maximum prison sentence of 20 years.
Mr. Schlesinger has never explained what happened to his clients’ money, and his lawyer, Murray Richman, declined to let him be interviewed. Mr. Richman said Mr. Schlesinger had decided to plead guilty because he wanted to see his former clients repaid. “He’s making every effort toward restitution,” Mr. Richman said. “He’s selling everything he’s got.”
One asset he has agreed to forfeit is an eight-bedroom house on five and a half acres in Quogue, on Long Island, which is listed for sale at $11.5 million and is advertised as having a pool and a hot tub overlooking the ocean.
Mr. Schlesinger is also no longer practicing law. Last year, after a lawyer disciplinary committee moved for his immediate suspension, he agreed to surrender his law license and was disbarred. But his case has put a harsh spotlight on the process of discipline for lawyers in New York, which is conducted in total secrecy until a public sanction, like a suspension or disbarment, is imposed.
In Mr. Schlesinger’s case, that process took a full year, during which he continued to represent clients, even filing at least one medical malpractice suit.
It could not be learned when the disciplinary authorities began receiving complaints against Mr. Schlesinger. Several months before the committee opened its investigation in September 2014, for example, it received — but did not pursue — a complaint from a Queens resident. New York court officials, citing confidentiality laws governing investigations into misconduct by lawyers, declined to say when the committee had received its first complaint against Mr. Schlesinger, how many complaints were filed or what they alleged.
David Bookstaver, communications director for the state court system, said, “It would require legislative action to change the law as it pertains to secrecy or transparency in attorney disciplinary proceedings.”
Many questions remain about Mr. Schlesinger’s fall, but there is little doubt about the ripple effect beyond his clients. His longtime law firm, Julien & Schlesinger, closed, and a small collection of partners and associates, including at least one of his sons, had to find work elsewhere.
Mr. Schlesinger earned his law degree from Fordham University in 1964 and joined a small law firm, where he eventually became a partner with a prominent personal injury lawyer, Alfred Julien. Their firm continued to bear both of their names after Mr. Julien’s death in 1989. Lawyers who had worked at the firm either declined to be interviewed for this article or did not respond to messages seeking comment.
Joseph L. Forstadt, a retired partner at the law firm Stroock & Stroock & Lavan who is a longtime friend of Mr. Schlesinger’s, said that he had occasionally referred personal injury cases to him and that Mr. Schlesinger had “a great reputation” for being able to win favorable settlements for clients. “Stuart was known as the guy who could sit down with insurance companies and get the best deal possible,” Mr. Forstadt said.
Mr. Schlesinger also taught as an adjunct professor at New York Law School, and for a time he wrote a column for The New York Law Journal.
When Mr. Schlesinger was arrested in December, he was released on a $1 million bond, which was secured by the Quogue property. His wife, Linda Schlesinger, a real estate agent, and a first cousin, Stephen Lefkowitz, a Manhattan real estate lawyer, signed the bond as guarantors.
“I got a call from his wife saying he was in this difficult situation and would I help,” Mr. Lefkowitz recalled. “And of course I did.”
Mr. Lefkowitz, 78, said that although he had known Mr. Schlesinger since childhood and their families were close, he knew little about his cousin’s legal practice and had been surprised at the news of his arrest.
The lawyer disciplinary committee, one of a number of such panels run by the state court system, has said that Mr. Schlesinger’s misconduct “came to the committee’s attention” through complaints from two clients that arrived on Sept. 2, 2014, according to a confidential legal motion later filed by the committee seeking his immediate suspension. (The motion was released last year after he was disbarred.) The two clients complained that Mr. Schlesinger owed them a total of $66,000 in settlement money, and an investigation “ensued immediately,” the motion said.
But the committee had in fact received an earlier complaint, involving a larger unpaid settlement, which it decided not to pursue. In June 2014, Albin F. Luczak of Queens complained to the committee that Mr. Schlesinger had not paid him his share of a $1.5 million dental malpractice settlement.
Mr. Luczak said in an interview that he had been the victim of medical negligence during a root canal that had required him to undergo several surgical procedures, including the removal of muscle in his neck. Mr. Schlesinger sued on his behalf and settled the case in fall 2013.
Under a retainer agreement, Mr. Luczak was owed about $1.1 million after Mr. Schlesinger took his legal fee.
But despite repeated requests, Mr. Luczak said, Mr. Schlesinger did not send him his share. Mr. Luczak recalled that when he and his wife visited Mr. Schlesinger’s office, the lawyer said: “Please trust me, please trust me. I’m treating you like family members.”
In March 2014, Mr. Luczak retained a new lawyer, Dustin Bowman of Kew Gardens, Queens. After trying unsuccessfully to resolve the problem through phone calls and emails, Mr. Bowman sued Mr. Schlesinger on Mr. Luczak’s behalf and helped him file a formal complaint with the disciplinary committee.
“I am writing to complain about a very serious matter,” Mr. Luczak wrote to the committee on June 13, 2014. He attached copies of the retainer agreement and his lawsuit against Mr. Schlesinger.
Two months later, Mr. Luczak received a letter from Jorge Dopico, the committee’s chief counsel, informing him that because of Mr. Luczak’s pending lawsuit, the committee would “defer further investigation at this time.”
According to the committee’s website, it does not investigate lawyers in cases in which a lawsuit is pending on a similar issue.
Mr. Bowman said he was shocked that the committee did not pursue the matter, given the amount of money Mr. Luczak was owed and what Mr. Bowman saw as an easily provable allegation.
On Aug. 22, 2014, Mr. Bowman wrote directly to the committee, saying that Mr. Luczak was complaining of “very serious ethical violations” concerning the mishandling of client money and was “imploring you to keep the docket open and inquire into this matter.”
Mr. Bowman said he heard nothing from the committee for nine months. Then in May 2015, he received a call from a committee lawyer. Mr. Bowman said he expressed surprise to the lawyer that the committee had not followed up on Mr. Luczak’s complaint and that it had taken so long to respond to his own letter.
According to Mr. Bowman, the lawyer did not offer a satisfactory explanation, except to suggest that the committee was understaffed and had a large backlog.
Mr. Luczak said that he and his wife had concluded at the time that what Mr. Schlesinger had done to them, he had also quite likely done to others. In early 2015, Mr. Luczak said, he contacted the Federal Bureau of Investigation, and within a week, a special agent, James H. Hilliard Jr., came to his home to interview him and to collect copies of his papers. Within a day, Mr. Luczak said, the F.B.I. called him to say it would open an investigation — apparently the inquiry that led to Mr. Schlesinger’s arrest.
Mr. Luczak, 56, said recently that he had yet to receive any part of his settlement, more than two years after it was completed. “Nothing — zero,” he said.
In November 2014, two months after the disciplinary committee began its investigation, Hal R. Lieberman, a lawyer representing Mr. Schlesinger in the misconduct inquiry, wrote to the committee and asked that his client not be penalized.
Mr. Lieberman described Mr. Schlesinger as a “distinguished” lawyer who had practiced “without a blemish for 49 years,” adding that, but for his “extraordinary efforts, there would be no settlement funds to begin with.”
On March 10, 2015, Mr. Schlesinger gave a deposition to the committee in which he expressed remorse for his actions. “I 100 percent acknowledge what I did,” he said. “I did wrong.”
But less than two weeks after making that statement, Mr. Schlesinger filed a new lawsuit, a medical malpractice case, on behalf of Zdzislaw Oleszkiewicz of Queens, to whom he already owed $33,000 from the settlement of an earlier claim.
“I never imagined I could be so taken advantage of,” Mr. Oleszkiewicz said through an interpreter.
In May 2015, the committee filed its motion seeking Mr. Schlesinger’s immediate suspension, citing evidence and his admissions that he had misappropriated settlement money from at least 16 clients.
Victims of Mr. Schlesinger’s scheme said they were uncertain as to whether they would ever recover their lost money, through Mr. Schlesinger’s restitution or other means. Cheryl Parisi, a Staten Island resident who said she was still owed about $60,000 from a medical malpractice settlement, recalled that one of Mr. Schlesinger’s checks had bounced.
Mr. Lawler, who is still owed his share of the 2012 settlement from the lawsuit stemming from the death of his 32-year-old son, Scott, said Mr. Schlesinger’s actions had left him aghast.
Scott Lawler, who had worked as a software developer at Barclays Bank in Manhattan, died after abdominal surgery at a New Jersey hospital, the lawsuit said.
Mr. Schlesinger’s former clients may seek compensation from a special client protection fund that reimburses people whose lawyers have stolen their money, but the awards are capped at $400,000 per client, meaning that people like Mr. Luczak and Mr. Lawler would not fully cover their losses. Others have followed Mr. Luczak’s path and have sued Mr. Schlesinger. Dolores Nordone of South Salem, N.Y., is owed more than $300,000 from her share of an $850,000 car-crash settlement reached six years ago, according to her lawsuit.
Ms. Nordone, 73, a former accountant, said that the accident had resulted in incessant lower back pain, requiring three surgeries, and that she could no longer work. “Words can’t really explain how I feel,” she said. “You put your trust in someone who you believe is going to help you, and it’s unbelievable.”
Her lawyer, Arnold N. Kriss, who went to the courtroom to see Mr. Schlesinger plead guilty this month, said, “I felt embarrassed as a lawyer to sit there.”
When his $5 million Ponzi scheme collapsed, a N.Y. lawyer tried to kill himself. He survived — but so did his confession.
The Washington Post
Michael E. Miller
May 23, 2016
Charles Bennett leaves the federal courthouse in Manhattan on May 19, 2016 after being sentenced to five years in prison for running a more than $5 million Ponzi scheme. © REUTERS/Nate Raymond Charles Bennett leaves the federal courthouse in Manhattan on May 19, 2016 after being sentenced to five years in prison for running a more than $5 million Ponzi scheme.
Charles Bennett stood on a Manhattan pier and stared at the cold, dark water below.
Once a successful lawyer at a powerful firm, he was now a wreck. His once promising career had been consumed by addiction. Meetings with clients had given way to bottles of liquor and 8-balls of cocaine, his lawyer would later admit in a court document. When his attempt at starting his own practice failed, he burned through his savings, then began duping friends and family members into investing in a Ponzi scheme. He even stole from his own mother.
By Nov. 3, 2014, Bennett’s fraud was quickly unraveling. That morning, an investor again demanded his $100,000 back.
“Sorry but let’s talk after I have confirmed the wire … which shall be done this afternoon as promised,” Bennett replied in an email.
But Bennett was bluffing. There would be no wire transfer. He had already spent the money on drugs, fine dining, vacations and his girlfriend, authorities would later determine. And instead of going to the bank, Bennett took some sleeping pills, washed them down with vodka and went to the pier.
Then he jumped.
As he sank into the Hudson River, Bennett left behind more than 30 victims and a web of deceit worth more than $5 million.
He also left behind a suicide note saying he could no longer bear “the pure emotional weight of the guilt I feel.”
His heart stopped. He was dead: another financial fraudster fleeing justice in this world for forgiveness in the next.
But then he came back.
New York Police divers pulled Bennett from the river and performed CPR, restarting his heart, pumping air into his water-logged lungs and rushing him to the hospital.
When investigators searched his West Side hotel room, however, they found his 16-page suicide note, titled “A Sad Ending to My Life.”
Instead of a sad ending to life, the note would mark the painful beginning of a new one for Bennett. Armed with his confession to running “a huge Ponzi scheme envelopping [sic] my family and closest friends,” prosecutors charged him with fraud. In Oct. 2015 he pleaded guilty.
“I am deeply, deeply ashamed by my conduct,” he said at the time, according to Reuters.
On Thursday, Bennett’s life and near death came full circle. He appeared in court looking more like his old self, dressed in a dark suit and sporting a tie. Over the past 18 months, he had moved into his mother’s basement in the St. Paul, Minn., gotten sober and tried to atone for his crimes by teaching English to immigrants. Family members he had bilked said they forgave him.
“The moment I first saw him in the hospital … when he became conscious I saw the agony of his suffering visible on his face and when I looked into his eyes, I saw his deep remorse, shame and sorrow, a remorse so deep, he took his life believing that even his own mother wouldn’t love him,” his mother wrote in a letter to the judge.
But other victims had not forgiven Bennett. They called him a “narcissist” and a “manipulator” whose plunge into the Hudson wasn’t a suicide attempt but a ploy for sympathy.
Which way would the judge see it? Would Bennett be forgiven, or sent to prison?
Several fifths of liquor and an 8-ball of coke
To his friends and family back in Minnesota, Charlie Bennett was the Midwestern boy who made it good in Manhattan. That’s why many of them didn’t think twice about handing him their money.
Bennett’s childhood in St. Paul wasn’t bucolic, however. His father was an alcoholic and his mother suffered from bipolar disorder, according to a letter his lawyer sent to the judge ahead of sentencing. His parents got divorced when he was young, leaving a teenage Bennett to bounce between homes and schools.
But Bennett was smart. He earned a BA and MA from the University of Florida, then a law degree from Boston University, working part-time to pay for all three, according to the letter. After law school, he snagged a job in New York City as an associate at Skadden, Arps, Slate, Meagher & Flom, one of the biggest law firms in the world. He rubbed shoulders with other up-and-coming attorneys, including Silda Wall — at the time, the wife of Attorney General and future governor Eliot Spitzer.
When he tired of New York, he moved to Paris to work for another top firm, then it was back to Manhattan to join Proskauer Rose, another huge law practice.
“His family and friends back home watched with awe and pride at Charlie’s life trajectory — from a small town Midwestern boy to a successful New York City lawyer,” his public defender, Julia L. Gatto, wrote. “So much of his personal worth and value was derived from his family and friends’ image of him as a success.”
“Charlie was driven, rising above the fray, always pushing himself, making it on his own, successful but never taking an easy path because he wanted to learn more, experience more,” his younger sister, Kelly B. Joyce, wrote in her own letter to the judge.
In 2000, Bennett quit Proskauer Rose to start his own practice. It was supposed to the peak of an already soaring career.
Instead, it was the beginning of his downfall.
For years, Bennett had propped himself up with alcohol and cocaine, according to his lawyer.
“Things were not exactly as they appeared,” Gatto wrote. “In New York, Charlie was lonely and depressed. His family had a history of mental health issues and it appears that Charlie carried this legacy. He was also addicted to cocaine — a sometimes daily habit for him — and he was an alcoholic who regularly engaged in binge drinking.
“During binge episodes, Charlie typically consumed several fifths of liquor and, at least, an ‘8-ball’,” or 3.5 grams of cocaine, Gatto said. “As he watched people around him couple off and start families, Charlie was emotionally unable to form that kind of connection. Charlie was suffering from severe and undiagnosed clinical depression. Nevertheless, he always presented as together and happy.”
With his drug use accelerating and his law firm imploding, Bennett burned through his savings. But he was too proud to ask for a loan.
“In a cloud of cocaine-use, alcohol dependency, and significant mental health issues, Charlie proposed an ‘investment opportunity’ to a handful of friends and family,” Gatto wrote.
According to prosecutors, Bennett pretended to have personal connections to important people involved in European real-estate mortgage-backed securities deals with extraordinarily high yields. Eliot Spitzer was one of his investors, he claimed.
To his friends and family members back in the Midwest, it looked like the golden boy had found the goose that laid the golden egg. Many signed up, including his mother, brother, two sisters, and an aunt. He emailed them frequently with updates on their fake earnings.
“Blimey you are getting close to $1mil!” he wrote to one close friend who eventually lost $600,000 in the scheme, according to the complaint.
He also coaxed his investors to give ever increasing amounts.
“Yo, huge game changer 10 day deal,” he wrote to another investor, identified in the complaint as Victim 3. “It’s going to be a gangbuster I am sure (25%+ return is our model…).”
According to investigators, Bennett spent that ill-gotten money on vacations and expensive hotels.
According to his lawyer, however, “at no point did Charlie grow rich off the scheme.” Instead, she says, he spent the money on his spiraling drug addiction.
Whether or not he ever intended on paying back his creditors is up for debate.
“In his diminished mental state, Charlie genuinely believed he would figure out a way to pay back the money with interest,” Gatto wrote in her letter to the judge. “Since boyhood, Charlie had used his brains and skill with positive results. He went to good schools, earned top grades, and excelled at prestigious jobs. With blind and irrational ego, he assumed he would figure it out here too.”
The end of the pier
Bennett never did figure out how to make his investors whole again. And on the morning of Nov. 3, 2014, his house of cards came tumbling down around him. Victim 3 was demanding his money back. Other investors were also antsy. From his hotel room on the West Side, Bennett stalled for time, emailing Victim 3 that he would wire the money that afternoon.
Instead, he penned his suicide note.
“A Sad Ending to My Life,” began the 16-page handwritten note.
“I have systematically over the course of five years or so perpetrated a huge Ponzi scheme envelopping [sic] my family and closest friends,” he wrote. “I managed to completely squander the hard earned money that my family and dear friends managed to set aside over the course of their working lives.”
Saying that he was weighed down by guilt, Bennett came clean before jumping into the Hudson. “To be clear about this: the whole… investment scheme that so many thought was real was in fact a complete… fiction of my crazed imagination… It was all an illusion… The bulk of the funds were used in classic Ponzi scheme fashion to pay off other supposed ‘investors’ and my absurd lifestyle. All the while pretending I was making everyone wealthy with absurd returns on their money…
“It was a Ponzi scheme pure and simple.”
After “drugging” himself with vodka and sleeping pills, Bennett then walked to the pier and jumped in.
His family members and attorney claim Bennett’s suicide attempt was about accepting responsibility for his scheme.
“Suicide was not an escape from his crime, it was to protect us and because he was convinced that we would really want him gone,” his sister, Kelly Joyce, wrote later.
To his critics, however, Bennett’s plunge was every bit as calculated as the Ponzi scheme he had pulled off for half a decade.
Bennett happened to dive in the river right near the NYPD’s SCUBA team, the New York Post pointed out.
“He’s such a manipulator,” John Hanson, one of Bennett’s victims, told the newspaper. “His goal was to get attention and hope everyone feels sorry for him.”
“I think he’s a narcissist who’s trying to beat the system,” said Brendt Mullan, another victim.
“There was no cloud of cocaine,” a third victim, Mark Loader, told the Post, of the Ponzi scheme. “It was calculated. It was premeditated. He was sober.”
If Bennett’s plunge into the Hudson was a fake suicide, then it came dangerously close to working. According to his attorney, his heart stopped working while in the water. Once at the hospital, his lung collapsed and he went into “respiratory arrest.” For several weeks he was in and out of intensive care with pneumonia and fluid in his lungs. Psychiatrists diagnosed him with severe depression.
As he was recovering, federal prosecutors charged him with operating a $5 million fraud and froze what little assets he had left.
When Bennett bonded out of jail, he was allowed to move to his mother’s house back in St. Paul. The prodigal son had returned, and now he was broke, living in the basement and taking care of his aunt’s dog. He volunteered at a community center, teaching English as a second language. He attended court-mandated drug counseling, where he admitted to being an alcoholic. He even decided to reach out to a woman with whom he believed he had fathered a child years before. Above all, he apologized to the family and friends he had betrayed.
“As I have told him myself, I forgive him,” wrote Toni Lasorella Murphy, one of his sisters and also a victim. “I sense that he feels little reason to believe that I truly forgive him — his remorse is heavy on his heart and I think it prevents him from accepting my forgiveness.”
“Taking his life was not about escaping his responsibility,” his mother wrote, “for all I have seen him do since that moment of consciousness [in the hospital] is take responsibility.”
With his suicide note functioning as a full confession, Bennett had little option but to plead guilty in October.
That left only sentencing. Bennett faced a broad range of possible sentences, from the maximum of 20 years in prison to the prosecutors’ recommendation of five years to the one year asked for by his attorney.
His fate was in the hands of the Honorable Laura Taylor Swain, federal judge for the Southern District of New York.
A judge’s decision
On Thursday, Bennett appeared in court appearing every bit the lawyer he once was. He wept as family members asked Swain not to send Bennett to prison, arguing that he was sorry and could better pay back his victims if free and working.
But other victims told Swain that prison time was only right for swindling them out of their savings.
“The scar is too deep, but prison time will help with the healing,” Hope Mullan told the court, according to Reuters. Brendt Mullan, her relative, said he was evicted after losing his money to Bennett’s Ponzi scheme.
“Fifteen to 20 years in jail would be optimal for my sense of justice,” he said, according to the Post.
Bennett did not argue with his detractors.
“Why did I do this? I don’t know. I’m a criminal. I’m a thief, I’m a liar,” he told the courtroom, according to the Post.
Perhaps, it was part of his ploy to gain sympathy. Or perhaps it was genuine self-loathing over what he had done to his friends, his family, even his own mother.
“I didn’t run anywhere except off a pier,” Bennett added, according to the Associated Press. “I just thought that’s what you do when you steal from your own mother.”
“I just can’t say enough how sorry I am,” he concluded. “I deserve to be punished.”
Swain agreed. On May 19, she sentenced Bennett to five years in prison.