New York Law Journal
February 11, 2009
Obtaining regular reports from Steven T. Rondos, the Brooklyn attorney accused of fleecing guardianship accounts of $4 million, was like “pulling teeth,” said one of the court-appointed examiners charged with monitoring Rondos’ performance.
Albert E. Spencer, a Manhattan attorney, inherited two cases from prior court examiners in early 2006. He said that Rondos had not provided the required reports for 2004, 2005 and 2006.
After Rondos’ indictment last month, the Office of Court Administration acknowledged that court examiners who monitored Rondos’ accounts should have detected sooner at least some of the alleged thefts that occurred between 2001 and 2008.
At least 16 examiners had signed off on the accounts that gave rise to the investigation of Rondos.
David Bookstaver, an OCA spokesman, said that five examiners, who monitored accounts from which $2.4 million allegedly was stolen, have resigned in the wake of the investigation of Rondos’ conduct, which began last year. Another has been suspended pending further inquiry.
Court officials are continuing to go through “thick files” to determine to what extent examiners failed to conduct due diligence, Bookstaver said.
Spencer has not been asked to resign. And he said in an interview that he had performed his duties as an examiner conscientiously “without a doubt.”
Rondos is charged with stealing $45,000 during April 10 to June 12, 2008 from one of the accounts Spencer served as examiner.
Spencer said that Rondos engaged in “stringing us along” by requesting repeated delays and offering excuses for tardy filings. On one occasion, Spencer recalled that the guardian claimed that he could not work for a month because he had suffered several broken limbs in an accident.
Spencer said he gave Rondos the benefit of the doubt and at first tried to be patient.
“Usually when we go at this we don’t try to act in a hostile manner because ultimately that results in more delay and we had no indication that Steven Rondos [would] be accused of bad acts,” Spencer said, pointing to Rondos’ position as vice-chair of the guardianship committee of the state bar’s Elder Law section as evidence of his prominence in the field.
“My letters to him began to get more hostile as time continued,” Spencer said, and in July 2008, after two compliance conferences, he said he moved to permanently remove Rondos.
Such a move usually is viewed as a last resort, Spencer said.
“One of the difficult factors in making that call is that there aren’t that many people around who want to take [the guardianship] job,” he said, adding that often times the guardian is a relative of the ward and may not be an attorney.
By the time Spencer moved against Rondos, the guardian already was under investigation.
According to the indictment, Rondos, 44, of Ridgewood, N.J., allegedly stole from 23 living victims including mentally and physically impaired elderly people as well as children, and one estate. Rondos and his firm, Raia & Rondos in Brooklyn, were both named in the indictment.
His wife, Camille Raia, the firm’s other named partner, has not been charged, but she was the named guardian of Andrea Spagnoletti, whose account was fleeced of more than $1 million, according to the prosecutor.
Rondos was extradited from New Jersey and arraigned before Manhattan Supreme Court Justice Michael H. Melkonian last week. He pleaded not guilty and was remanded on $2 million bail. His attorney, David Frankel, has not responded to requests for comment.
Court examiners contacted bristled at the suggestion that their lack of supervision contributed to the alleged thefts.
Brooklyn attorney Paul I. Krohn, who has been suspended from the list of court examiners, said that his suspension “had nothing to do with Rondos as far as I’m concerned,” but declined to comment further.
According to Bookstaver, Manhattan attorney Seymour Ostrow was one of the five people who resigned from the examiner list. Ostrow disputes that.
“I sure as hell never resigned,” although he said that he had agreed not to take new cases after he broke his hip about a year ago.
Ostrow insisted that he had “kept after [Mr. Rondos] … even with a broken hip.”
Ostrow said his reviews of Rondos’ accounting turned up “nothing untoward.” And he said that he had gone above and beyond the call of duty as an examiner.
“My reports are 50 to 100 pages where others turn in five and 10 pages, I analyze the law, I visit homes,” he said, adding that he had even trained himself in accounting in order to do a better job.
Lewis E. Alperin, a Mount Vernon attorney who was the court examiner in one of Rondos’ cases said he felt “lucky” that there had been no theft under his watch, although the district attorney has asked Rondos to forfeit $36,090 in earnings from the account.
Alperin said that reflected commissions taken by Rondos before they were due, an issue the two had argued about.
“One of my issues with him was how he should take commissions — we disagreed strongly on how to compute commissions. What he wanted was double the amount,” Alperin said.
Alperin, who has not been suspended or asked to resign, said that as an examiner, he said, one can only do so much.
“If your intent as a lawyer is to steal then you are going to get away with it for a while,” Alperin said.
He noted that a guardian who is appointed in January 2008 has until May 2009 to file a report and then “you can say ‘Oh, I’m a little behind, I’m just waiting for some bank statements,’ so the examiner gets the report in June or July.”
Court examiners are not court employees and are appointed from a list compiled by each Appellate Division department of lawyers and others who have met specific educational and training requirements. They are compensated annually based on the size of the estate they are monitoring.
In a 2005 report, a state commission on court fiduciaries concluded that court examiners are “key to guardian oversight in New York” but found significant problems with the process, including cursory examinations of financial records, rare face-to-face interviews with guardians and poor lines of communication.
According to the report, the average court examiner in New York handles “well over 100 examinations annually” for relatively low fees. They rely on volume to turn a profit.
The commission issued a number of recommendations, including increasing the annual compensation limit of court examiners to $75,000 and creating the position of a court examiner specialist to help oversee examiners and deal with problematic cases.
Chief Administrative Judge Ann Pfau said that oversight would be further tightened in the wake of the alleged thefts, including immediately implementing an electronic tracking system to warn officials of potential problems with the filing of guardians’ reports and mandatory compliance conferences.
The commission’s chair, Sheila L. Birnbaum, said that the reforms had resulted in “many fewer complaints” about the system but cautioned that a theft-proof system could be unrealistic.
“You can’t stop people from fraud and being crooks,” said Birnbaum, a partner in Skadden, Arps, Slate, Meagher & Flom.