Wednesday, August 22, 2018

Thinking Above The Bad Apples: Elder Law Attorneys Who Have Stolen from Clients

I'm giving a big sigh as I begin to type this particular blog post.  I hate the topic of thieving lawyers, and especially those who hold themselves out as elder law professionals.  But, I also can't ignore the topic.  I keep a notebook of news articles and bar association disciplinary cases on elder abuse involving lawyers and although certainly the bad apples are a tiny fraction of the profession, my notebook is growing. 

The latest news comes from New Jersey, where a high profile lawyer -- who hosted a radio show and taught seminars on elder law -- pleaded guilty in late July in state court to stealing "millions" from clients.  Robert Novy, 66, faces sentencing on September 28, and the AG recommends 10 years in state prison.  

In some ways Novy's history mirrors other cases I've followed more closely in Pennsylvania, as it began with him placing client funds into his firm's trust accounts, accounts which are usually meant to be a temporary spot for use in future client-directed transactions.  At some point he then proceeded to transfer the funds to his own operating accounts, in direct violation of statutory and ethical rules.  Also, counterintuitively, his "mature" age and experience are something I've seen with other attorney fraud cases in Pennsylvania.  Were they always bad apples or did they just stay too long in the bin?  The histories often seem to begin with the lawyer's "promise" to invest the funds for clients, relying on long-years of practice as a sign of reliability, even though, generally speaking, lawyers probably aren't the best source of investment advice. In fact, the Pennsylvania Supreme Court adopted new rules in 2014 that placed restrictions on attorneys' involvement in "investment products." 

In another way, Novy's history is unusual.  I've found that most of the big ticket thefts by attorneys from older clients involve sole practitioners.  They seem like lone wolves, operating without traditional checks and balances.  Novy, who called his firm Robert C. Novy & Associates, had other attorneys in the firm. Sadly, it seems that Novy may not have been operating solo in his fiduciary crimes, as an "associate" attorney who had also been practicing law for many years was charged with similar crimes involving client funds.  I could not find the outcome of those charges, or whether the charges are still pending. 

In these New Jersey cases, the charges date back to 2015 and 2016. I suspect delays in bringing the cases to trial or plea may be tied to efforts to "permit" the lawyers some opportunity to repay the defrauded clients by liquidating their personal assets; ultimately, however, going forward with the criminal charges (rather than "mere" disciplinary sanctions) suggests the reimbursement opportunity was unavailing.  

https://lawprofessors.typepad.com/elder_law/2018/08/thinking-above-the-bad-apples-elder-law-attorneys-who-have-stolen-from-clients.html

Crimes, Elder Abuse/Guardianship/Conservatorship, Ethical Issues, Legal Practice/Practice Management, State Cases, State Statutes/Regulations | Permalink

Comments

Post a comment