f/k/a archives . . . real opinions & real haiku

February 3, 2006

Capoccia gets 15 years for swindling clients

Filed under: lawyer news or ethics,pre-06-2006,Schenectady Synecdoche — David Giacalone @ 6:25 pm

[updated: Feb. 4, 2006] After merely slapping the wrists of two cooperating

co-conspirators, U.S. District Court Judge J. Garvan Murtha sentenced dis-

barred lawyer Andrew J. Capoccia to 188 months imprisonment, for stealing

millions of dollars from thousands of clients, through his “debt reduction”

centers in New York and in Vermont. (WNYT.com, “Attorney gets over 15 years

for cheating clients;” Associated Press, “Capoccia sentenced to 15 years;”

Feb. 3, 2006) Albany Times Union‘sHis debt is 188 months in prison,by

Alan Wechler; Rutland Herald‘s “Fraud mastermind gets 15-plus years in prison,”

by Daniel Barlow, Feb. 4, 2006.]

 

From his bench in Rutland, Vermont, Judge Murtha Murtha called Capoccia’s

crimes “horrendous” because they targeted victims who were trying to avoid

bankruptcy and because he purposely surrounded himself with “weak” asso-

ciates he could control and intimidate to maintain his fraudulent practices.”

 

scales rich poor

 

Judge Murtha stated:

“This is judgment day as far as I’m concerned, Mr.

Capoccia.”

The TU reported that: “Before the sentencing, Vermont attorney [Tom]

Zonay made a passionate appeal to the judge, first asking that Capoccia

be sentenced to only two years in prison, and then asking that he be re-

leased after sentencing to allow him to work on an appeal. ‘He shouldn’t

be detained today,’ Zonay said. ‘There’s just no reason for it.’ Murtha

disagreed.

“He victimized thousands of people. He knew what he was

doing . . . As far as I’m concerned, Mr. Capoccia has no respect

for the law.”

“Murtha ended with an optimistic word for the man who will likely be in his

late 70s when he exits prison. ‘He has many talents,” Murtha said of

Capoccia. ‘Hopefully when he gets out of prison, he will be able to use those

talents’.”

 

Capoccia1999

Andrew J. Capoccia (1999)

Rutland Herald

 

Capoccia was convicted in April 2005 on conspiracy, laundering and fraud

charges. According to the Albany Times Union (“Capoccia sentence,” Feb.

3, 2006):

“Capoccia had asked in a motion filed Wednesday not to be

sent away immediately, in order to work on an appeal. But

Murtha said he didn’t think an appeal would have merit, and

he also indicated he didn’t expect any of the Capoccia con-

victions to be reversed.

 

“Capoccia sold his debt-reduction firm to lawyers in Bennington in

2000. Three years later, the Law Centers closed, leaving thousands

of clients who had paid money to have their debts resolved in even

more debt.”


In addition to jail time, Capoccia will have three years of supervised release


and must make restitution of more than $7.26 million. He also must give 10


percent of all earnings after his release to victims. Three other co-defendants


have been ordered to pay more than $800,000 in restitution.



Prosecutors had asked for a sentence of 360 months in prison, or 30 years.


During Friday’s hearing, Zonay pointed out that others charged in the case had


received little or no jail time. [Ed. note: Howard Sinnott and Thomas Daly, both


disbarred lawyers, were given 3-months and one-month imprisonment, respec-


tively; Jerry Forkes, the former executive director of the Law Centers, and the


first co-defendant to enter into a plea arrangment, was sentenced to two years’


probation and ordered to pay $20,000 restitution.]



jailbird neg



According to the Times Union, Assistant U.S. Attorney Gregory Waples pointed


out that the other defendants had pleaded guilty and testified against Capoccia.



“Their criminality, while substantial, is absolutely dwarfed by what


Mr. Capoccia did,” Waples said. “They seemed truly, genuinely contrite.


Mr. Capoccia, by contrast, is unrepentant.”

Waples, in the Herald story, described Capoccia as a white-collar criminal who

abused the trust of his clients by stealing their “children’s education savings and

mortgage payments.” “They went to Mr. Capoccia for help and only suffered

more,” he said.

 

AAG Waples told the judge Friday that prosecutors are still determining the number

of victims in the case and the total amount stolen. He estimated there to be more

than 5,000 victims found so far and the financial fraud total to be close to $23 million.

Waples said some of the restitution will come from nearly $3 million prosecutors

seized from accounts held by Capoccia’s wife. (Rutland Herald, Feb. 4, 2006)

 

“tinyredcheck” Although this may seem like a wonderful victory for justice, please take a

look at my lengthy treatment of this entire “debt reduction” matter in the

essay “blame bar counsel for letting Capoccia harm clients” (March 8, 2005).

As I lamented (with details) last year:

This lawyer scandal and client catastrophe could have been avoided —

minimized and stopped in its tracks — if bar counsel acted responsibly

and competently when the first barrage of suspicious ads came out in

1997; or when they received detailed complaints from myself, a member

in good standing of the bar [starting in Dec. 1997]; or when they were

flooded with client complaints (which at first were not even accepted, but

were instead referred to the State Attorney General’s office); or when news-

paper and tv reports emerged about angry and injured clients.

 

“doghouseN”

 

Or, or, or . . Instead, toothless and blind watchdogs did nothing, while their

cousin the wolf (with main offices on Wolf Rd. in Colonie, NY) plundered the

flock. There is little chance of reimbursement for the cheated clients and

many may never be able to repair their bad credit.

 

Because the debt reduction behavior was never challenged by the Grievance

Committees [he was disbarred for bringing frivolous lawsuits and ignoring court

orders], Capoccia’s partners were able, at their “Law Centers for Consumer

Protection,” to continue attracting and bilking clients — some say up to 20,000.

My first complaints against Capoccia were made when he was claiming to have

“helped hundreds of clients.”

I’m pleased that Judge Murtha has finally given a serious sentence in this case, but I’m

still angry on behalf of the unnecessarily injured clients and the unnecessary additional

blot on the reputation of lawyers. Effective lawyer discipline — especially the willingness

to investigate clearly excessive contingency fees* — would have saved a lot of people a

lot of misery.

 

* What made this scheme so lucrative for Capoccia was his

fee system. He said that he took “only” 25 or 27% of the

amount of debt reduction achieved for the client. In actuality,

he took the entire fee — usually thousands of dollars — up

front, before doing anything for the client, and calculated it

on the basis of clearly optimistic outcomes (predicting the

ability to reduce debts by 50 to 75%). If that scheme, which

clearly violated ABA Formal Ethics Opinion 93-373 (regarding

“reverse” contingency fees, which are based on savings, rather

than winnings), and ABA Formal Opinions 94-389, had been

declared unethical, there would have been no incentive for

Capoccia to continue providing his “service.”

 

you look too
robber! dewdrops
in the grass




Issa,


translated by David G. Lanoue



scales rich poor neg



more misplaced mercy from judge murtha

Filed under: pre-06-2006 — David Giacalone @ 11:06 am

A month ago, we opined that J. Garvan Murtha, Chief Judge of

the U.S. District Court, Vermont, seems far too lenient to lawyer-

felons.  We gave examples from two recent cases.

 

 scales over

 

Well, he’s done it again, in the Andrew J. Capoccia Debt Reduction

fraud case — giving a one-month sentence to Thomas J. Daly, who

was one of the three main actors in a scheme that has left thousands

of clients with ruined financial histories and over $25 million in futile

claims for misappropriated monies by the Capoccia Law Centers of

Albany, N.Y., and (after Capoccia’s disbarment), its successor Law

Centers of Consumer Protection, in Bennington, Vermont.

 

The Rutland Herald reported yesterday (“Lawyer Admits Guilt in

Fraud,” Feb. 2, 2006):


“A former lawyer for a bankrupt debt-reduction firm in Bennington

is heading for a month in federal prison on fraud and tax evasion

charges.  ‘I am so sorry,’ Thomas J. Daly, 44, of Bennington, told

Judge J. Garvan Murtha on Wednesday in U.S. District Court in

Rutland. ‘I did commit these crimes. I’m sorry for it’.”

 

” ‘You certainly played a role in the victimization of the people who

depended on you to do something for them'” Murtha told Daly . .

 

“The judge then sentenced Daly to one month in prison followed

by three years of supervised release, with three months of that time

to be served on house arrest. In addition, Daly was ordered to pay

$200,000 restitution. 

                                                                                   “emptypocketsS”

 

“In his plea agreement, Daly acknowledged that he accepted nearly

$200,000 in bonuses — in addition to his $200,000 salary — at a

time when clients were demanding refunds of at least $1 million and

creditors of the firm were seeking even more. 

 

“The money for the bonuses came from an escrow account and the

firm’s general accounts. According to federal prosecutors, Daly knew

or should have known that the firm was not capable of supporting those

payments, given that the firm had been embezzling client money to pay

its day-to-day expenses.”

As with the sentencing of his disbarred co-conspirator Howard Sinnott in

December, Daly’s role in this complicated, well-planned rip-off of consumers

who were trying to avoid bankruptcy (and the subsequent hiding of millions of

dollars sought by NYS and the federal government to compensate the victims

and creditors), was blamed on a personal flaw.  Here, Daly’s defense counsel 

told the court “that his client’s life had been ravaged by alcoholism, contributing

greatly to his legal problems.”

 


According to today’s Albany Times Union, Andrew J. Capoccia the disbarred 

mastermind of the debt reduction scheme (explained in a prior post), is expected 

to be sentenced today by Judge Murtha.  (“Capoccia faces sentencing today,”

Feb. 3, 2006).  Although Capoccia, who was convicted after trial last year,

could receive up to 20 years, Judge Murtha’s wrist-slaps to his co-conspirators

suggests we may see more “professional courtesy” mercy.   We’ll keep you

apprised.

 

update (Feb. 3, 2006): See Capoccia gets 15 years for swindling clients .

 



“snowflakeS”  For better judgment, consider the haiku and

senryu of our Honored Guest buddy Ed Markowski:

 

 




             roller coaster

                we have no advice

                    to offer the newlyweds

 

 

 

 

 




          county fair…

             the downcast eyes

               of a blue ribbon steer

 



 

rollercoaster

 

 






 

                  midwinter dusk

                      a fireman turns

                         to face the flames

 


“midwinter dusk” – Mainichi Daily (#680, Feb. 2, 2006)

                                                                                                                                            scales rich poor neg

 

Powered by WordPress