Famous Lawyer Charged With Stealing From Holocaust Victims
[Black Star Exclusive] - The Black Star News has learned that a famous crusading lawyer who made his reputation fighting Swiss banks on behalf of Nazi Holocaust survivors has been charged by New Jersey investigators with stealing money from some of the victims. Out of a total settlement of $500,000 for one victim from Swiss banks, the lawyer gave his client a mere $1,500 officials charge. These investigators recommend disciplinary action that could lead to disbarment.
The explosive charges against the lawyer, Edward Fagan, who also was briefly involved in Reparations for Slavery in the U.S., are contained in a complaint filed Dec. 3, 2004, by the Office of Attorney Ethics, in the State Supreme Court in New Jersey. The body investigates allegations of misconduct filed against lawyers. The lawyer had earlier been cleared of charges of mishandling escrow monies in New York State--now a New York investigator say those charges could be reopened.
Fagan gained international limelight after signing as a client, Mrs. Gizella Weisshaus, an elderly Jewish Holocaust survivor in 1996. She had fruitlessly pursued Swiss banks contending they stole deposits her father made before WWII. Mrs. Weisshaus, now 75, survived Auschwitz where her parents and three sisters and three brothers all perished in 1944. The banks settled her historic law suit --it became a class action -- for more than $1.25 billion in 1998. Yet, by the time of the settlement, Mrs. Weisshaus had parted ways with Fagan. She complained that he allowed interest groups to hijack the lawsuit. Additionally, she contended that these groups, and the several lawyers who became involved, stood to earn millions of dollars while individual survivors were awarded small settlement amounts--she even opted out of the settlement.
Mrs. Weisshaus also filed charges with the New York State Departmental Disciplinary Committee, in Manhattan, alleging that Fagan looted funds from an escrow account of a dead cousin, Jack Oestreicher, that she had entrusted him with. Fagan contended that Mrs. Weisshaus was merely angered over
disagreements they had regarding the Swiss banks' case. NYS Disciplinary Committee dismissed Mrs. Weisshaus's charges. She was angered, particularly when the Committee's chief counsel at the time she filed her charges, later became an attorney for Fagan, who was riding high with publicity from the
Swiss bank's case. Mrs. Weisshaus complained that the Committee was "corrupt" and had protected Fagan.
The Committee's new chief counsel, Thomas J. Cahill in a letter dated Jan. 15, 2003 to Mrs. Weisshaus stated, "A review of our files demonstrates that Hal R. Lieberman, Esq., attorney for Mr. Fagan, did not participate in any way in the resolution of your 1998 complaint, when he was Chief Counsel of the Committee."
A message left for Lieberman, seeking comment, was not returned by press time. Fagan could not be reached for comment. When informed by The Black Star News that New Jersey officials recommend sanctions against Fagan, an investigator at the NYS Departmental Disciplinary Committee said even though Mrs. Weisshaus's case was considered closed it could be re-opened. "If New Jersey does come up with a finding there, and the attorney is sanctioned then we would take the appropriate actions that needs to be taken," the investigator said, adding that New York would also sanction Fagan. "We have
standing reciprocity," he said.
For years, many people have dismissed the NYS Departmental Disciplinary Committee, and the other grievance committee's including in Brooklyn as bogus entities that don't conduct any real investigations. This reputation has become more widespread in light of the several recent media reports documenting judicial corruption in the courts system. (The Black Star will soon publish a series examining the grievance process and allegations of judicial misconduct in New York).
Mrs. Weisshaus has alleged that Fagan also mishandled her other cases, including one in which he steered her to a rabbinical court that was biased against her--she ended up losing residential real property to a former partner whom she alleges used forged documents. "I want to expose the lawyers and judges who covered up for Fagan," she says.
In addition to charges that he looted the Oestreicher estate, New Jersey officials charge that Fagan stole hundreds of thousands of dollars from another celebrated Holocaust survivor, Estelle Sapir. Mrs. Sapir's case against Swiss banks was championed by then Sen. Alfonse D'Amoto who appeared with the frail woman at numerous press conferences.
Fagan's troubles began sometime in 1996, after he had signed up Mrs. Weisshaus as a client in the Swiss case. According to the New Jersey complaint charging Fagan with "complex misconduct," he deposited the $82,583.00 Oestreicher money into a Bank of New York Trust account #630-0812412 on March 1, 1996. (The money was required to remain in deposit until a court determined the validity of a third party lien for alleged treatment and care given to Oestreicher by the Suffolk County Department of Social Services). New Jersey authorities say on March 27, Fagan wrote a check that cleared against the trust account for $40,000, on the same day that his Bank of New York business account was credited $40,000 and he subsequently wrote five checks against his business account. These five checks were covered with the funds from Oestreicher's estate funds and "were unrelated to the Oestreicher client matter," the complaint states. By October 23, 1997, only $100 remained in the account.
New Jersey officials charge that Fagan used bank statements from New Jersey to deceive New York investigators into clearing him in connection with the charges by Mrs. Weisshaus. Fagan opened a Summit Bank trust account for another client with a $35,000 deposit. In 1998, following the Sapir settlement, between June 1 to June 30, he had more than $450,000 in his Summit Bank trust account, according to New Jersey officials. In July, responding to the grievance charges filed by Mrs. Weisshaus in New York, Fagan produced a bank statement from the Summit trust account as proof that the Oestreicher money was safe. By providing a statement from the summit account, Fagan "attempted to deceive the New York disciplinary authorities into believing that he had maintained the integrity of the Oestreicher estate funds, knowing that the only funds in that account at the time were those for the Sapir matter," states the New Jersey complaint.
Following a 1998 court order resolving the Suffolk County claims against the Oeistreicher estate, Fagan paid Suffolk County $46,097.18, lawyers involved in the matter on behalf of Mrs. Weisshaus, $2,669.95, and Mrs. Weisshaus, $33,814.87. (Mrs. Weisshaus still disputes the amount and the validity of the claims by Suffolk County). To make those payments, Fagan raided Mrs. Sapir's money, the New Jersey complaint states. "Without authority, respondent knowingly invaded the Sapir funds when he made the disbursements from the Summit trust account for the benefit of the Oestreicher estate," states the complaint. "At the time respondent made the disbursements on behalf of the Oestreicher estate from his Summit trust account, the balance in the BONY trust account where the estate funds had been originally
deposited was only $25.00."
Sapir had retained Fagan in January 1997 to represent her as one of the plaintiffs in the Swiss banks Holocaust case initiated by Mrs. Weisshaus. In May 1998, Fagan entered into a separate confidential settlement with the Swiss banks on behalf of the ailing Sapir. As part of the settlement, Fagan was to retain $60,000 while the Kohn, Swift & Graft law firm was to receive $40,000, from the $500,000 settlement. Yet, by the time Sapir died, Fagan had disbursed only $1,500 to her through Summit trust check # 1058, according to the complaint. On April 27, 12 days after Sapir's death, Fagan was apparently in a generous mood; he "disbursed $7,300 to Sapir's niece, Jeanette Berstein, for funeral expenses after Sapir's death," the complaint states. Apart from $1,500 and the legal fees to the Kohn law firm "the first distribution of the Sapir funds to someone" other than Fagan himself was the money to cover Sapir's funeral cost, according to New Jersey officials.
Sapir died penniless, people who knew her said. The Black Star News was unable to get comments from Berstein. Fagan continued raiding Sapir's money after she died, according to the authorities. "After Sapir's death, between April 19, 1999 and September 29, 1999, respondent continued to make eighteen (18) disbursements on behalf of Sapir to either cash or his Summit business account totaling $124,750.00."
In all, from the time the Sapir funds was deposited on May 18, 1998, to the date of her death on April 15, 1999, Fagan made 37 payments, by checks payable to cash and wire transfer totaling $302,750 to his Summit business account, the complaint states. "I'm surprised he wasn't charged with grand larceny," said a lawyer familiar with the case, referring to Fagan.
New Jersey authorities charge that Fagan tried to cover his alleged misdeeds regarding the Sapir funds by borrowing $225,000 from a friend, Andrew Decter; he deposited the money into the Summit account and then paid out a total of $190,153.02 to two Sapir heirs; they are, Jo Sapir Broner and Herbert Broner, states the complaint. The Black Star News was unable to reach both Broners. A person who knows Decter said he's ailing and was unable to comment.
Fagan has been a high roller since spearheading the Swiss banks case. He even reached out to some of the lawyers championing Reparations for Slavery in the U.S. More recently, he was in South Africa, signing up clients for lawsuits against major multinationals charged with sustaining Apartheid for decades. He was admitted to the bar in New Jersey in 1980. He once maintained offices in Manhattan, including at the World Trade Center. His current listed office is at 51 JFK Parkway, in Short Hills, New Jersey.
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