NY guardianship attorney charged with stealing from disabled clients

Lawyer Is Accused of Stealing Disabled People’s Assets He Was Assigned to Protect
John Eligon
January 29, 2009
The New York Times
http://www.nytimes.com/2009/01/29/nyregion/29lawyer.html?_r=1&em
Steven Rondos was supposed to help people with mental and physical illnesses care for their money. Instead, prosecutors said Wednesday, in the last seven years he helped himself to their money, stealing $4 million from 23 people who could not help themselves.

Mr. Rondos, 43, who had been appointed as guardian for the people, was indicted in State Supreme Court in Manhattan on charges that he stole their assets and used them for personal expenses, like the mortgage on his home in Ridgewood, N.J., kitchen renovations, landscaping and a home theater. In some instances, prosecutors said, Mr. Rondos continued to steal money from victims’ estates after they had died.

Mr. Rondos stole more than $1 million from a 32-year-old patient with cerebral palsy and spastic quadriplegia, prosecutors said.

In another case, he took a total of more than $400,000 from a person with bipolar depression, before and after the patient died in 2007, prosecutors said.

This was “a pretty vicious guy,” Robert M. Morgenthau, the Manhattan district attorney, said Wednesday at a news conference in his office.

Mr. Rondos has a law firm in Brooklyn with his wife, Camille Raia, Mr. Morgenthau said. Ms. Raia has not been criminally charged and the district attorney’s office is unlikely to charge her, said Daniel J. Castleman, the chief assistant district attorney.

Prosecutors have filed suit against both Ms. Raia and Mr. Rondos for more than $4.7 million, which includes the total amount that prosecutors say was stolen and the value of their law firm, Raia & Rondos. The money will be used to repay the victims or the estates that were assigned to Mr. Rondos, prosecutors said.

Mr. Rondos was arrested Wednesday morning at his home in New Jersey and charged with money laundering, grand larceny and scheme to defraud. He was being held in New Jersey on Wednesday night and was expected to appear before a judge there on Thursday morning.

If he waives extradition, he will be taken to Manhattan for arraignment. If convicted, he could spend up to 25 years in prison.

Mr. Rondos’s lawyer, David Frankel, did not return telephone calls and an e-mail message seeking comment. Calls placed to Mr. Rondos’s home and office were not returned.

Mr. Morgenthau said a “good Samaritan” notified the authorities of Mr. Rondos’s activities, though he would not identify the person. Although the indictment charges Mr. Rondos with defrauding 23 clients, he could have defrauded up to two dozen more, prosecutors said. The assets he controlled in the cases covered in the indictment total between $20 million and $30 million, prosecutors said.

Mr. Rondos has indicated that he faces similar charges in New Jersey. He consented to being disbarred there this month after saying he was under investigation on charges of knowingly misappropriating clients’ funds.

In a sworn statement dated Dec. 10, 2008, included in the disbarment file, Mr. Rondos also acknowledged that “these allegations are true, and if I went to a hearing on these matters, I could not successfully defend myself against those charges.”

In an attached letter dated Dec. 19, 2008, Daniel A. D’Alessandro, a Jersey City lawyer, wrote that Mr. Rondos was being treated for depression and was taking prescribed antidepressants.

Guardians in New York are appointed by judges to manage the affairs of people who cannot handle their own because of physical or mental problems. Judges must also assign examiners to ensure that a guardian is handling the finances appropriately. Guardians must, for instance, present examiners an annual summary to show what, if anything, has been done with an account’s assets.

Mr. Rondos often did not file the summaries, and the examiners often did not report that failure to judges, said David Bookstaver, the spokesman for the New York Office of Court Administration.

“The court examiner failed to do due diligence,” Mr. Bookstaver said, adding that Mr. Rondos’s activities probably would have been caught earlier if the examiners had done their jobs properly.

In response to the Rondos case, Mr. Bookstaver said, the office, which oversees the operations of the entire New York court system, will start keeping a central database to ensure that guardians report to examiners on time. The database will allow court administrators to know when a guardian’s summary is past due, Mr. Bookstaver said, and will automatically generate a meeting with the judge in charge of the case.

In the past, court administrators had no central oversight of guardians and their dealings with examiners, Mr. Bookstaver said.

“While it’s an aberration, this certainly brought about this change today,” Mr. Bookstaver said.

The change will come after years of problems concerning guardianships. In 2004, after a Long Island City lawyer stole $2.1 million from assets he was assigned to protect, a special grand jury in Queens issued a report saying the system for appointing guardians for incapacitated people had “gone horribly wrong” and needed to be overhauled. The report recommended several changes, most of them concerning supervision of examiners.

In Mr. Rondos’s case, it appears that the examiners may have been too friendly with him and turned their heads to the fact he had not been filing his summaries, the authorities said. One examiner was fired and another suspended because of the Rondos case, Mr. Bookstaver said.

The thefts did not result in the loss of vital medical services for any of the victims, prosecutors said. Some of the money could be recovered through insurance and a state fund that reimburses clients up to $300,000 when their funds are misused, the authorities said.

As a guardian, Mr. Rondos was entitled to collect fees of 2 percent to 5 percent of the assets he controlled. Prosecutors said that his appointments came from six or seven judges, and that there did not seem to be a pattern of political patronage in the Rondos case.

Brooklyn Lawyer Charged in $4M Theft
Laura Italiano
January 28, 2009
New York Post
http://www.nypost.com/seven/01282009/news/regionalnews/brooklyn_lawyer_charged_in_4m_theft_152427.htm
Stealing candy from just any old babies allegedly wasn’t good enough for one Brooklyn lawyer.

Big-shot guardianship attorney Steven Rondos was indicted on charges he stole more than $4 million from nearly two dozen incapacitated clients – including babies who were horribly crippled.

Rondos is accused of chiseling away at the loot so he could fancy up his $1.4 million home in Ridgewood, N.J. – landscaping, renovating his kitchen, and even installing his own home theater.

The scheme was so nefarious, it made Manhattan’s gentlemanly district attorney, Robert Morgenthau swear – twice.

“The son-of-a-bitch was a pretty vicious guy,” the patrician octogenarian seethed in announcing Rondos’ indictment on money laundering and grand larceny charges that could put him away for up to 25 years.

“A lot of people should have paid attention to what this p*** was doing,” the DA said of the apparent failure of the state’s system of monitoring guardianship accounts.

Rondos, 44, was the court-appointed guardian for 23 injured clients who’d received big payouts in medical malpractice lawsuits, clients who included cerebral palsy sufferers, frail seniors, and children injured at birth.

He should have been safeguarding their total $30 million in payouts, prosecutors said. After all, the money was supposed to provide for them and their medical needs for life.

In some instances, Rondos continued to steal money even after the victims had died, prosecutors said. Three times, when confronted with his thefts, Rondos paid back that victim by stealing from yet another victim, prosecutors said.

“It was really despicable stuff that this guy did,” Morgenthau said.

To pull the scheme off, Rondos merely funneled money from the accounts into his law firm’s operating account, and wrote checks to himself from there. Rondos is a past president of the Bay Ridge Lawyers’ Association in New Jersey, and has served on the New York State Bar Association as vice president of its guardianship committee.

By state law, all guardianship books are supposed to be reviewed by court appointed examiners, and these were, Morgenthau said. But the examiners are lawyers, not accountants, and somehow missed the allegedly siphoned millions.

“The system of monitoring these guardianships has got to be reformed,” the DA said. “The shocking thing to me is these examiners – none of them ever spotted it.”

Rondos was arrested at his home yesterday morning, and was being held in Bergen County pending extradition to New York, authorities.

Lawyer couple eyed in guardian scams
Nancy Katz, Barbara Ross and Dave Goldiner
August 4, 2008
NYDailyNews.com
http://www.nydailynews.com/news/ny_crime/2008/08/04/2008-08-04_lawyer_couple_eyed_in_guardian_scams-2.html
Prosecutors are investigating a politically connected Brooklyn lawyer and his wife for allegedly siphoning off “potentially millions” of dollars from unwitting clients, including crippled kids, sources said.

Steven Rondos, 43, and his lawyer wife, Camille Raia, 47, are suspected of stealing the money from so-called guardianship accounts set up for victims of medical malpractice and personal injury cases.

A source close to the case said many of the victims are children who suffered serious injuries in car crashes or other accidents.

The couple manages accounts worth up to $50 million.

Rondos and Raia have an office in Bay Ridge and own a $1.4 million home in leafy Ridgewood, N.J.

They have not been charged, and the Manhattan district attorney’s office refused to comment on the alleged scam, which sources said may have gone on for years.

Judges in several boroughs and counties have started removing Rondos and Raia from their positions of authority over the accounts.

“[Officials] are in the process of petitioning to remove Rondos,” said David Bookstaver, a spokesman for the city Office of Court Administration.

Rondos and Raia did not return calls for comment.

The alleged scam started unfolding when officials at brokerage firm Smith Barney, which manages several of the accounts, noticed unusual withdrawals.

They notified prosecutors, who launched an investigation.

Judges often appoint a guardian to manage the financial affairs of a victim who is unable to do so because they are elderly, crippled or a minor.

The guardianship positions are plum jobs and are highly lucrative, even if handled appropriately.