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Firm suspends lawyer in school district scandal
Headline News |
2008/02/19 11:14
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A part-time private attorney who was listed as a full-time employee by five school districts - enabling him to earn health benefits and a nearly $62,000-a-year state-funded pension, while his law firm was paid millions of dollars in fees - has been suspended by his current law firm, one of its partners said yesterday.
Steven Schlesinger, a partner in the Garden City law firm of Jaspan, Schlesinger, Hoffman, said yesterday that his firm had suspended Lawrence Reich and asked for his resignation. Reich had been serving as of counsel, or as a consultant, to the law firm since Jan. 1.
Newsday reported Friday that five school districts falsely reported to the state that Reich, 67, was a full-time employee in each district at the same time. The districts were Baldwin, Bellmore-Merrick High School, Copiague, East Meadow and Harborfields.
"Based on the publicity, it's not any good to have him at the firm," Schlesinger said. "I don't need P.R. liabilities."
He added, however, "I don't think any laws were violated."
Schlesinger said the firm has not heard from Reich since the disclosures. "We're trying to locate him."
Reich, who lives in Centerport, did not return a call for comment yesterday. In an earlier interview, he defended his arrangement with the five districts as "common practice."
At the same time that the districts claimed Reich as an employee, they paid his then-law firm, Ingerman Smith of Hauppauge, more than $2.5 million in fees, according to district records. Under Internal Revenue Service rules, a person cannot be treated as both an employee and independent contractor for the same work.
After the Newsday story appeared, agents with the Federal Bureau of Investigation served all five districts with subpoenas for financial records.
In addition, the New York State comptroller has sent letters to four of the five districts, notifying them that they would be audited. Reich left the payroll of East Meadow on Nov. 30, 2001, according to records.
Reich retired with an annual pension of $61,459 in September 2006. But he continued working for some of the districts, according to letters he sent asking them to "reconfigure" his pay as a retainer, rather than as a salary.
Last July, state auditors uncovered the problem in an audit of the Harborfields school district. Reich said he then contacted the state about his pension eligibility and was assured it was common practice.
The state took no action, and the issue was not included in the final audit of Harborfields.
Nonetheless, Reich notified the districts that he was retiring for good in October.
In December, Ingerman Smith notified the districts that Reich was leaving the firm. |
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Five districts falsely reported lawyer's job status
Headline News |
2008/02/17 11:00
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A federal grand jury in Central Islip has opened an investigation into possible fraudulent financial double-dipping at five Long Island school districts, according to several sources.
Agents with the Federal Bureau of Investigation served subpoenas for the financial records of the districts late Friday, according to the sources.
The subpoenas were served a day after Newsday reported that an attorney for the five districts, Lawrence W. Reich, received a public pension of $61,000 a year and health benefits for life after the districts reported to New York State that he was a full-time employee of each district.
Newsday reported that Reich, who said he had done nothing wrong, worked for the districts only part time, while also working for a law firm that was also billing the districts.
The subpoenas, from the office of the U.S. Attorney for the Eastern District, ordered the school districts - Baldwin, Bellmore-Merrick High School, Copiague, East Meadow and Harborfields - to provide all their records involving financial dealings with Reich, and his former law firm, Ingerman Smith Llp. The sources said attorneys at the firm were also part of the focus of the probe.
Ingerman Smith, formerly of Northport but now located in Hauppauge, has represented nearly 50 Long Island school districts and currently represents approximately 40.
Robert Nardoza, a spokesman for Benton Campbell, the U.S. Attorney for the Eastern District, declined to comment.
Michael Conte, a spokesman for Harborfields, confirmed late Friday that his district had received a subpoena.
Officials for Baldwin, Bellmore-Merrick High School, Copiague and East Meadow did not immediately return phone calls. Reich and a representative for Ingerman Smith also could not immediately be reached.
John Milgrom, a spokesman for New York Attorney General Andrew Cuomo, said Friday his office was reviewing the matter.
"While we've reached no conclusions, we take seriously and will fully investigate any claim involving a breach of the public trust or misuse of public funds," Milgrom said.
A Newsday review of records showed that Reich submitted no time sheets, never worked full time and that school officials knew he was working only part time. He was able to obtain state-funded family health coverage through the Baldwin school district and received pension credits from all five districts.
Reich retired from the districts with an annual pension of $61,459 in September 2006. But he continued working for some of the districts, according to letters he sent asking them to pay him a retainer, rather than a salary.
After Newsday inquired about Reich's arrangement on Thursday, the New York State comptroller sent letters to four of the five districts notifying them that they would be audited to determine whether they were properly classifying people who provide professional services as employees or contractors.
"We want to make sure that only individuals who are entitled to receive a state pension get a state pension," said Emily DeSantis, a spokeswoman for the comptroller.
Last July, state auditors uncovered the problem in an audit of the Harborfields school district but apparently took no action. Although the final audit did not mention the issue, Reich notified the districts last October that he would no longer work for them.
In December, Ingerman Smith wrote a letter to one of the districts saying Reich had left the law firm. |
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‘Hottest Female Associate’ Contest Leaves Skadden Unamused
Headline News |
2008/02/13 11:32
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Who’s the hottest young female lawyer at Skadden, Arps, Slate, Meagher & Flom? Last week that question sent the New York firm into a bit of a tizzy. On Feb. 4, Skadden Insider, a blog written by two anonymous firm employees and dedicated, unofficially, to all things Skadden, announced the winner of its weeklong poll to decide the firm’s "Hottest Female Associate." The American Lawyer notes that the contest was hardly Skadden Gone Wild - most of the photos of the eight contestants were relatively innocuous head shots. The winner, a blond litigator, drew 400 votes from Skadden cognoscenti. The firm, however, was not amused. On Feb. 7, Henry Baer, the firm’s employment adviser, sent an e-mail to all Skadden lawyers in the United States, chastising the blog. "Numerous attorneys at the firm have expressed their concern and, in some cases, embarrassment at such contests," wrote Mr. Baer, who said the competition was "inappropriate" and inconsistent with Skadden’s "values and standards of behavior." The bloggers responded in a post titled "Not So Hot": "Damn, we feel like we were called to the Vice Principal’s office today and had our knuckles wrapped." "The contest, although sophomoric, was done all in good fun," the writers continued. " We’re sorry if anyone was embarassed by it. We wish you had just chuckled, rolled your eyes or merely clicked away." However, the lawyerly bloggers didn’t seem entirely abashed by the firm’s stern response. "We’re not quite sure what Skadden’s "values" are (or, for that matter, the Firm’s "standards of behavior")," they said, adding that they had suspended nominations for the Hottest Male Associate.
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Feds: Terror trial prosecutor shouldn't collect legal fees
Headline News |
2008/02/12 13:11
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A former prosecutor lied about achievements on his resume and shouldn't collect legal fees for defending himself against charges from a botched terrorism trial, federal authorities say. A jury in October acquitted Richard Convertino of accusations that he presented false evidence and concealed evidence when he prosecuted North African immigrants in 2003. The government dismissed an obstruction of justice charge a month later. Convertino asked a Detroit judge last month to order the government to pay his defense costs.
Convertino told The Detroit News and the Detroit Free Press for stories Tuesday that the government continues to try to discredit him, despite his acquittal. He said many of the allegations are false or so old that they are difficult to confirm or deny. The Justice Department's accusations include that Convertino falsely claimed a high school class presidency as well as college and law school honors. The allegedly padded resumes were used to get positions within the Justice Department and were submitted to the White House in 2001 when he was seeking a judgeship, according to the filing. "I will fight them until hell freezes over and then on the ice," said Convertino, who is planning a malicious prosecution lawsuit. "This is our government that is conducting themselves in this manner, and it's disgusting that they're able to do that." The Justice Department argued the allegations are relevant in deciding whether the government should pay Convertino's defense costs because it's important to know the information prosecutors acted on. |
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Law firm installs mock courtroom, TV gear
Headline News |
2008/02/11 16:20
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It's a high-tech mock courtroom where jurors with hand-held "perception analyzers" can twist a dial to rate a lawyer's performance - the same kind of testing the television industry uses to evaluate new entertainment shows. Lawyers can show evidence to jurors via video projection equipment, and in a nearby room they can watch to see what jurors like and dislike by watching real-time results of the panel's reactions. Built of cherry wood and designed from blueprints of courtrooms in the Matheson and West Jordan courthouses - the new $250,000 courtroom is not in any courthouse, but at the personal-injury law firm of Siegfried & Jensen. "Jurors expect to see cases presented the way it is on television," said law partner Mitchell Jensen. "Instead of describing an accident, it is replayed for them." At least one 3rd District Court judge is trying the technology. A LCD projector, screen and switchbox donated by LawMedia Center, which is building Siegfried & Jensen's system, were recently installed in Judge Paul Maughan's courtroom. Maughan believes the equipment will allow for speedier and more efficient trials, while generating less paperwork, state courts spokeswoman Nancy Volmer said. Prosecutors used the system earlier this month to display crime scene photos and other information during closing arguments in Floyd Eugene Maestas' capital murder trial. "Nothing in Utah approaches this right now," said James McConkie, of Parker and McConkie, who recently partnered with Siegfried & Jensen. "It allows us to make a more powerful presentation in court." "We can do a complete dry run of a trial," added law partner Ned Siegfried. While jurors deliberate their verdict, attorneys can electronically eavesdrop to learn how they reached their decision. In an alcove at the rear of the mock courtroom, the firm has built what amounts to a small television production studio. The equipment can be used to remotely depose a witness in another state, allow others to watch video depositions from elsewhere and to video-conference with other attorneys.
Lawyer Bradley Parker said the high-tech video depositions are more effective than paper depositions. The equipment can be used to incorporate video, photos, documents and diagrams into the deposition record. "You can blow it up, highlight it and draw on it, just like they do during the Super Bowl," he said. Another example: "If we catch a witness in a lie and sweat starts to form on his forehead, we can zoom in for a close-up," Parker said. McConkie said the video equipment helped quickly settle the case of a woman who claimed her back was injured. The woman was being deposed when she was shown covert video of herself lifting a heavy set of barbells at a garage sale. The television production equipment was also used in the case of a 5-year-old boy crippled at birth because of a lack of oxygen. "We put together a settlement CD showing the baby walking and eating and running, sitting, putting on a shirt, and [the caregivers] settled before litigation began," McConkie said. "They could see what kind of client it was and how it would affect the jury," McConkie said. Jensen said video helps humanize dead and injured clients. "It's hard to tell a story that's so personal without showing them," Jensen said. "It makes it personal. It's no longer a statement about an injury, it's a personal injury."
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Law firms follow money in credit mess
Headline News |
2008/02/10 22:44
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First came the $211 billion in write-downs of subprime debt, now comes the legal bonanza. In the past four months, nearly 20 law firms have set up subprime practices comprising more than 500 attorneys, many of them in New York. Not since the savings and loan crisis two decades ago have so many law firms moved so fast to create a whole new discipline. “It's a sea change,“ says Marvin Pickholz, the partner in charge of Duane Morris' month-old, 15-lawyer subprime practice group. “These problems are going to expand to such a dimension that it will consume vast amounts of lawyers' time.“ Among the first was powerhouse Greenberg Traurig, which has 1,750 lawyers. It began building what is now a 48-member group in August. Mintz Levin Cohn Ferris Glovsky and Popeo launched its 25-lawyer practice in December; Pepper Hamilton followed in February with its 70-member credit crisis response team. Many other firms, including Bryan Cave, are mulling plans for their own subprime groups. At Bingham McCutchen, 65 partners make up a subprime practice that didn't exist two months ago. Such top firms often bill in the range of $600 to $800 an hour. Amy Kyle says she is already drawing additional lawyers from the 1,000-attorney firm and is open to hiring more legal talent. “We'd be opportunistic,“ Ms. Kyle says. At this point, firms seem to be running ahead of actual demand. “A client told me that he got seven cold-calls last week from law firms offering their services in this area,“ says John Grossbart, partner at Sonnenschein Nath & Rosenthal and co-head of its 40-lawyer credit markets and subprime lending task force. So far, much of the work has involved the investment houses that packaged and sold subprime debt. Law firms are being hired to sue or defend such companies as Citigroup, J.P. Morgan Chase, Merrill Lynch and Bear Stearns. The work will by necessity be spread to many firms, as the lawyers who advised banks in the creation of these instruments will face conflicts of interest and most likely be barred from participating. Mr. Grossbart reports a rise in fraud actions as insurers and other institutional investors absorb huge losses from holdings in supposedly top-rated subprime debt. One of his clients, an insurance company, has been the target of six subprime-related lawsuits in as many months. “Frankly, that's a lot,“ Mr. Grossbart says. A growing number of investigations launched by federal, state and local authorities have generated further demand. In recent weeks, the U.S. Attorney for the Southern District of New York has launched criminal probes of Bear Stearns and UBS; the Securities and Exchange Commission has begun formal inquiries into Merrill Lynch, UBS, Morgan Stanley and others; and the New York attorney general has subpoenaed Bear Stearns, Deutsche Bank, Morgan Stanley, Lehman Brothers and Merrill Lynch.
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