Sunday, December 9, 2012

Lawyers fund reimburses defrauded clients

Former law clients of Kenneth F. Bernas of East Aurora, David R. Schnell of North Tonawanda and Alan E. Fielitz of Lackawanna have been paid $253,254 this year through the state's Lawyers' Fund for Client Protection, according to fund spokesman Timothy O'Sullivan.

Over the past three years, the fund - funded by registration fees paid by the state's 271,000 lawyers - has reimbursed more than $1.2 million to 33 former Bernas clients, he noted.

Has reimbursed more than $1.2 million to 33 former Bernas clients
Bernas was convicted last year of swindling 53 clients by taking out presettlement loans in their name without their knowledge. He was sentenced to 2 1/3 to seven years in prison and ordered to pay back $1.8 million in the criminal case.

In addition, about a half-million dollars from the sale of a $2 million mansion Bernas built in East Aurora was also used to reimburse clients.

Schnell was sentenced in August for stealing almost $34,000 from a client's estate. He was sentenced to six months in jail and five years on probation, and ordered to repay the money.

Fielitz was sentenced in March 2009 to four months of weekends in jail for stealing about $102,000 from six clients.

The Court of Appeals in Albany created the Lawyers' Fund in 1982 and since then has reimbursed more than $162 million to 7,208 eligible law clients defrauded by 1,020 former attorneys they had trusted, O'Sullivan noted.

"Whereas a handful of lawyers misuse client money, the legal profession in this state has agreed to assume the responsibility to reimburse losses, and no other profession provides such protection to its clients," said Eric A. Seiff, the Manhattan lawyer who is chairman of the fund's board of trustees.

Losses covered by the fund include thefts of estate assets, real estate funds, litigation settlement payments and client funds embezzled for investments.

While the fund cannot compensate for legal malpractice or assist in resolving disputes over legal fees, its newest type of loss reimbursement involves lawyers who took money by falsely promising to provide legal help in loan modification cases.

By Matt Gryta, News Staff Reporter,

Source: The Buffalo News


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