Holocaust survivor Gizella Weisshaus, 77, had alleged that Fagan stole money from the escrow account of her dead cousin Jack Oestreicher.
[News: Exclusive]
Following a complaint for misappropriating money from escrow accounts, a Special Ethics Master in New Jersey has recommended the disbarment of Edward Fagan, the attorney who became famous when he filed the Swiss banks case on behalf of Holocaust survivors in 1996.
The Black Star exclusively reported the investigation of Fagan on January 25, 2005.
After the Swiss banks case was settled for $1.25 billion in 1998, Fagan gained global notoriety. He even discussed representing African American organizations working on legal action against the US government for Slavery reparations and groups in South Africa seeking action against foreign banks that helped sustain apartheid regimes.
In recent years, Fagan’s reputation has gone into a freefall. For years the first client he represented on the Swiss banks case, Holocaust survivor Gizella Weisshaus, 78, had alleged that Fagan stole money from the escrow account of her dead cousin Jack Oestreicher.
Fagan was later accused of misappropriating some of the $500,000 settlement money he had secured from the Swiss banks on behalf of another one of his elderly clients, Estelle Sapir, another elderly Holocaust survivor. He continued spending the money from an account he controlled even after Sapir died, it was alleged.
Fagan was accused of misappropriating a total of $122, 582; from the Oestreicher account and from Sapir. He was also accused of improperly disbursing $303,582 from Sapir, by the New Jersey Office of Attorney Ethics.
Fagan “knowingly misappropriated $40,000” from Oestreicher’s New York Estate, on March 27, 1996 and “misappropriated $82,582 of the Sapir Settlement funds that he maintained in his New Jersey Summit Bank account on August 19, 1998,” read the complaint from the New Jersey Office of Attorney Ethics.
In the 2005 article, The Black Star reported that it was only after his client Sapir had died that out of the $500,00 he secured on her behalf that Fagan sent some money to her family to cover funeral cost—$7,300.
In his defense in the New Jersey ethics case Fagan argued that he had oral agreement to “borrow” the funds, separately, from his clients, Weisshaus and Sapir. Hearings on the matter were conducted between November 15, 2005 and April 19, 2007.
In his January 24, 2008 recommendation Special Ethics Master, Arthur Minuskin, concluded that Fagan had “lied by claiming he had unlimited authority to use the $82,582 given to him” by Gizella Weisshaus from the Oestreicher estate and that Fagan “lied by claiming he had unlimited authority to use the Sapir settlement funds; he also improperly disbursed $305, 582 of those funds.”
Weisshaus said she welcomed the news. “He should have been disbarred before he started the Swiss case because he stole my cousin’s escrow account before hand and I didn’t know,” she said, in an interview with The Black Star.
The recommendation will be forwarded to a Disciplinary Review Board which will then send its decision to State Supreme Court in New Jersey for final ruling. The process could be concluded by the end of the year, says John McGill, III, Deputy Ethics Counsel Office of Attorney Ethics.
[More To Come]
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