How insiders snatch millions from estates in the scandal-scarred Surrogate Courts

How insiders snatch millions from estates in the scandal-scarred Surrogate Courts

By BRAD HAMILTON and MICHAEL GARTLAND



Last Updated: 10:59 AM, July 29, 2012



Posted: 1:25 AM, July 29, 2012




If you’re a lawyer in New York, there’s no sweeter deal than getting assigned to an estate case in Surrogate’s Court.



The work is often routine — selling assets, paying bills, contacting heirs — but the pay can reach into the millions.



Landing such a gig requires currying favor with one of the city’s seven surrogate judges, who handle wills and estates. They have the power to appoint lawyers and approve their sometimes jaw-dropping invoices.



The jobs often go to the judges’ friends, associates or campaign contributors, court authorities admit. Looting of the estates can sometimes result.



The most recent example involves Bronx Judge Lee Holzman, who last week faced removal from the surrogate bench after he signed off on legal work that was never done.



The bills, according to the Bronx District Attorney’s Office, totaled $300,000 and went to the judge’s associate, lawyer Michael Lippman, a Democratic Party crony who ran Holzman’s campaign financing, raising $125,000, a court watchdog claims.



Lippman then got into money trouble himself, racking up $1 million in gambling debts and allegedly faking bills to cover his losses.



Prosecutors say they uncovered the cooked books and charged him with fraud.



Another alleged thief preyed on a lucrative and largely unsupervised part of the system — cases in which there is no will.



Such cases go to public administrators, who work with Surrogate’s Court judges in handling their finances.



In May, Richard Paul, the bookkeeper for the Brooklyn public administrator, was indicted for stealing $2.6 million from these estates, allegedly manipulating the check-writing process to get at the cash.



Judges who allow fraudulent pay-outs are “a disgrace to the legal profession and to the state of New York,” said Monroe Freedman, a Hofstra University professor and leading expert on legal ethics. “They should be removed from the bench and disbarred.”



Freedman said an entrenched system of favor-trading, with hints of bribery, has persisted for decades.



“They’re stealing from the client, which is one of the worst things you can do,” he said. “I can’t think of much worse. The judges are not only condoning it, but they’re helping lawyers do it.”



Even when there is no illegality, huge sums vanish.



A decade after Wall Street investment banker Ted Ammon was beaten to death in his East Hampton home, a group of politically connected lawyers pummeled his estate with $10 million in fees, records show.



That amounts to 20 percent of his $50 million fortune, well above the 6 percent rate that court administrators deem acceptable.







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