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Ethics Charges Leveled at Lawyer Who Fostered Holocaust Settlement

 


A New Jersey lawyer who won worldwide acclaim for helping Holocaust victims and survivors secure a $1.25 billion settlement from Swiss banks is now facing ethics charges that he misappropriated funds from two of those clients -- infractions punishable by disbarment if proved.

In a complaint filed Jan. 5, the state Supreme Court's Office of Attorney Ethics alleges that Edward Fagan made unauthorized disbursements from one client's $500,000 settlement and from an $82,583 trust account for which another client was executor.

The OAE alleges that Fagan took $427,500 in the first case, a settlement established for client Estelle Sapir, wrongfully transferring the money to his own account. In the second case, he is alleged to have transferred $40,000 from an account overseen by client Gizella Weisshaus to his own account and to have used the funds to cover expenses.

Fagan denies the charges. "They are wrong about the allegations and all that will be shown in the course of my defense," says Fagan, who previously had offices in Livingston, N.J., and New York but now operates only out of New York.

Fagan's lawyer, Hackensack, N.J., solo Kim Ringler, says the clients have since been made whole and that Fagan has been cooperating with the OAE.

But OAE Deputy Ethics Counsel John McGill III says that reimbursement of clients is irrelevant for purposes of imposing discipline.

Fagan says he plans to continue his practice and "to dedicate my services to victims' rights cases as I have been doing all along." He says that he presently has more than 50 cases filed in New York's Southern District Court alone. They include suits on behalf of the Association of Holocaust Victims for the Restitution of Artwork and Masterpieces. In those cases, Fagan is suing two Austrian banks, the Austrian government, the Federation of Russia, Federation of Hungary and the U.S. government, seeking the return of art works allegedly sold without permission of their Jewish owners.

Meanwhile, creditors are lined up against him in other matters. A records search by Superior Information Services in Trenton, N.J., a division of Charles Jones Inc., shows 28 outstanding court awards and liens of more than $4 million against him and his firm, Fagan & Associates. Outstanding judgments against Fagan include three from clients who alleged that he neglected their cases while he focused on the Holocaust matter.

He adds that though he earned a total of $3.8 million in fees for the Holocaust settlement, he has not won a major court award or settlement since.