Manhattan Surrogate Court The Shame of NY

Senator Robert Kennedy testifying in 1966 before an Albany state legislative committee called the New York Surrogate Court "A political toll booth exacting tribute from widows and orphans."

Once informally known as "the widows and orphans court," the Surrogate's Court is supposed to protect estates and the heirs of people who die without a proper will. Instead according to press reports it functions as an ATM machine that distributes millions of dollars a year to connected predatory lawyers in fees.

“A rogues' gallery of chiselers and crooks has flocked to the courts over the years, running up bills and draining money that rightfully belongs to the heirs and descendants of the dead.” -NY Daily News, August 14, 2008

What is most shocking about the reported corruption of the modern Manhattan Surrogate Court is not that it has eluded reform for over 100 years or that despite the amount of corruption uncovered nobody has even been sent to jail for any of the wrong doing, it is that everyone has turned their backs and allowed this orgy of stealing from the dead to occur from generation to generation, with elected officials, good government groups and the media watching in silence.

Update

"The Surrogate Court has a checkered reputation. In Manhattan, three candidates are pledging to fix it. Their plans are quite different. But there's a common theme: change.
A New York Times editorial deftly described the Surrogate race in Manhattan: “[The] Democratic primary for Manhattan Surrogate underscores the case for reform … capable candidates — all promising reform of the court's patronage appointments — vied for the job, which involves dispensing millions of dollars in fees to lawyers acting as executors, guardians and estate trustees.”Unfortunately, that editorial was published 18 years ago (click here to read it), and this year’s Surrogate race is a rerun: an expensive slugfest in which every candidate promises to radically change the court. But real reforms are few. Indeed, former Surrogate Eve Preminger admitted in a recent interview that many lawyers who worked closely with that court never expected her to follow through with her 1990 campaign promises. “Nobody believed I was serious, everybody thought it was a publicity trip,” she said, maintaining a gloomy outlook on quick Surrogate Court fixes." - Judicial Reports, August, August 27, 2008

Investigations, Reports on Mismanagement, Newspapers Editorials and the Court is the Energizer Rabbit… Keeps Going, and Going and Going

There is very little follow-up, institutional memory beyond the fact that the court has problems.

“Federal investigators are pressing a separate investigation into operations of the Surrogate’s Court, including the public administrators’ office. . . United States Attorney in Manhattan, Otto Obermaier, called a continuing investigation that identified the Surrogate’s Court as a “racketeering enterprise” used by the defendant.” –NY Times, July 24, 1992

“In 1972, Mr. Vincent Catalfo was suspended from practicing law for three years after appropriating a client’s money without permission. Last year, the State Appellate Division overturned a $150,000 fee awarded to him by Surrogate Marie Lambert after he applied for $212,800 in legal services as the court-appointed representative of a 17 year old heir, Ryk Schoonheim. The court found that Mr. Catalfo had never drafted a single legal document, except the request for his own fee.” – NY Times, August 14, 1991

The central fact in that the Surrogate Court supervises the disposition of nearly $1 billion in property each year. The judges command a rich flow of patronage because of their power to appoint guardians and administrators. Fees in this court have sometimes been shockingly high, and appointments have tended to go to cliques of lawyers who stood well with the surrogate. In short, this court is in need of a thoroughgoing reform. In fact, we favor its abolition.” –NY Times, June 24, 1966

Senator Kennedy Serious Try to Reform Surrogate Court

In the 1960s’ Senator Robert Kennedy came closest to stopping the looting of New York’s dead. Kennedy went to Albany to gain public support to reform the court. He was attacked by the legislatures and by Manhattan Surrogate Judge Samuel Di Falco.

“The testimony of Senator Kennedy and Justice Silverman had been based “solely on hearsay, not on facts. . . The committee heard from Kennedy in silence and asked no questions, but after the Senator left, members of the committee, and some Surrogates called as witnesses, denounced him for repeating “hearsay” statements impugning the system.” –NY Times Nov. 30, 1966

Senator Kennedy ran and elected Judge Samuel Silverman on a reform platform to the Manhattan Surrogate Court, as the junior judge.

The victory of Supreme Court Justice Samuel Silverman in the primary contest for the Democratic nomination is a triumph for better government . . . The most important result of the primary has been to direct public attention to the desirability of putting an end to the political patronage for which the Surrogate’s Courts have been notorious for many years. – NY Times, June 29, 1966

“Justice Samuel Silverman has performed a public service in taking on this disagreeable task. He is the better man and would administer the Surrogate Court – so long as it exists – in the severely impersonal, politically neutral and professionally distinguished manner that it requires.” –NY Times, June 24, 1966

But Kennedy effort to clean up the court was blocked by the Manhattan Surrogate Court’s Chief Judge Samuel Di Falco who stopped all of Surrogate Silverman’s reform attempts and ended shortly after Kennedy’s death in 1968.

The Liberal Party’s Alex Rose in 1972 attempted to continue Kennedy’s efforts against the Surrogate Court’s corruption, but was block by reformers when his candidate against Surrogate De Falico, Criminal Court Judge Amos Basel did not get enough support to get on the ballot to run on the democratic line. Basel running only on the Liberal Party line was endorsed by the New York Times was defeated in the general election.

“In office, Surrogate Di Falco has proved more impartial and responsible than many critics had feared. In his bid for a second fourteen-year term, he carries not only the endorsement of the Democratic, Republican and Conservative parties but also of the Citizen Union. However, we believe that the public interest would be better served by the election of his Liberal opponent, Amos Basel. Judge Basel has given distinguished service on the Criminal Court and has always demonstrated political independence and judicial disinterestedness. –NY Times, October 29, 1970


Ex Surrogate Samuel Di Falco Indicted in Criminal Contempt
“Samuel Di Falco, the former Manhattan Surrogate has been indicted for criminal contempt for allegedly telling a grand jury he could not remember having spoken to a law assistant about arranging favorable rulings for clients of his son’s law firm.” –NY Times, February 6, 1978

Court Insiders Impenetrable

A group of insider has resisted reforms for generations despite attempts from some elected officials, editorials newspaper boards and good government groups to reform the Surrogate Court. The last attempt to clean up the court came from Senator Kennedy over 40 years ago. Elected officials for the last generation have avoided court reform to avoid clashing with the powerful legal firms connected to the court. Their constituents who suffer from court’s high fees drawn from their estates are not as important.

“It means taking on a whole culture, which is entirely resistant to change. That is the fundamental difference between me and Renee Roth – real reformers cannot go along,” said Karen Burstein who was challenging Judge Renne Roth re-election to the Surrogate Court. “But the surrogate said she tried internally to overhaul procedures a decade ago, only to have a senior judge block her efforts. I didn’t do anything wrong here,” said Roth. “I was the good guy. I inherited a mess, and when I could do something about it, I cleaned it up.” –NY Times, September 7, 1996

A quarter a century ago Mayor La Guardia complained that the Surrogate Court kept Tammany alive during his City Hall regime. Ten years ago the distinguished Tweed Commission recommended their abolition and transfer of their functions to the State Supreme Court. –NY Times, June 29, 1966

“Manhattan – Surrogate’s Court - This sensitive office has been a center of patronage that favors politically connected lawyers and is a burden on the estates of decedents and their families. The Surrogate’s Court urgently requires reform through state legislation.” –NY Times Editorial, September 11, 1976

“The Citizens Union last week endorsed Senator Robert Kennedy’s proposal to abolish special-guardian appointments in surrogate courts and create salaried public guardians.” – NY Times, December 4, 1966

“Mayor Lindsay endorsed yesterday the proposal to merge the Surrogate Court into the State Supreme Court.” – New York Times, May 6, 1967

Media Lacks Passion on Court Change

We know through the relentless drum beat of publication of hundreds of stories, that former governor Eliot Spitzer wore knee high black socks when he had sex with admitted whores. But when it comes to informing the public about a court where the powerful and greedy steal and deeply hurt thousands of New Yorkers and their families in their most troubling times, the press covers only the breaking court scandals without doing any investigation into the causes or to connect the dots and build public support for change. The public is left with nothing but the hope that if they vote for this or that endorsed candidate for Surrogate promising change, the stealing from the dead will stop in Surrogate Court. An analysis of the past clearly shows that hope is not enough.

The Manhattan Surrogate Court Controlled By A "Group" of Three Insiders for nearly 50 Years

Despite over a generation of Surrogate candidates and newspaper editorials calling for and promising reform three men have run the Manhattan Surrogate Court’s counsel office for almost 50 years and they all belong to the same "core" law firm. The last two counsels are law partners. One of the three, John Reddy, is trying to become the Surrogate Judge this year to continue their fifty year run well into the future.

The Family Business
1. Joseph T. Arenson
2. Phillip Beckerman
3. John Reddy

The Family Cuts Out the Middle Man or Woman

“John Reddy, who has worked in the Surrogate's Court for 29 years, was the protégé of a lawyer who got mixed up in a court scandal.” -Daily News, August 14, 2008

Public Administrator counsels John Reddy, Phillip Beckerman both belonged to Counsel Joseph Arenson's law firm. In addition Reddy and Beckerman are partners in their own law firm.

Karen S. Burstein, a former State Senator and Family Court judge challenged Renee Roth for Surrogate in 1996. Burstein contends that a circle of friends and political allies have benefited disproportionately.

“Ms. Burstein says that when the Manhattan Public Administrator, Bruno Cappellini, resigned under pressure in 1988, Surrogate Roth let his successor, Ethel Griffin, hire to the lucrative position of counsel to the public administrator a law partner of the previous counsel, who had also resigned under pressure.” – NY Times, September 7, 1996

Bruno Cappellini the Public Administrator and his counsel Joseph Arenson left the Manhattan Surrogate Court after a report about his management style were published by AG Robert Abrams and Controller Ned Regan in 1987. Beckman, a member of Arenson law firm, was Arenson replacement as counsel. Beckman was replaced by his law partner John Reddy shortly after a story came out accusing Beckman with having an illegal bank account that the office opened up for the dead, the PA used to distribute funds to other lawyers. Beckman said his name was forged on papers and check of the said account. Arenson also had the same kind of bank account that the office opened for the deceased to distribute fees to lawyers for their work on the estates.

Update

Mr. Reddy has received $691,447 for work his firm has received on 28 cases involving the Public Administrator's Office, according to information provided by the OCA. The court system first started tracking those payments in May 2006. - NY Law Journal, August 21, 2008

Report # 1: Delays, lax Record-Keeping and Inflated Legal Fees

“In 1987, Comptroller Edward V. Regan and Attorney General Robert Abrams -- determined that record-keeping was in disarray, property was warehoused chaotically and outside lawyers were awarded windfall fees for minimal legal work. The report also said that there were serious delays in completing cases and that money from estates was deposited improperly into accounts used to pay for some of the public administrator's office expenses.” –NY Times September, 7 1996

John Reddy got his first job from resigned counsel Joseph T. Arenson. Reddy and Bekerman are law partners, and were members of Arenson law firm, Reddy started working for Arenson in the Surrogate Court PA counsel office from 29 years ago. Today Reddy has Arenson’s old job as counsel to the PA.

John Reddy Protégé Arenson

"John Reddy is a partner in the law firm of Bekerman and Reddy, LLP. Mr. Reddy has been associated with the Counsel to the Public Administrator of New York County since 1979, and has served as counsel since 1996. Mr. Reddy has found Memories of Professor Joseph Arenson who helped him begin his career in trusts and estates. Joe Anerson gave me a job while I was still in Law School," Mr. Reddy recalled. "Eventually I became a partner in his firm and now I have his old job as Counsel to the Public Administrator." – NY Law School Report Alumni Connection 2007

Mr. Arenson, whose ten-lawyer firm has served the Public Administrator’s office for 35 years. . . Mr. Arenson firm received a total of 1.7 Million in 1985 (Controller's Report said) – NY Times, November 28, 1987

Joseph Arenson was involved in an additional scandal five years later with his replacement counsel Phillip Beckerman a member of his law firm and partners with Surrogate candidate John Reddy

Fake Bank Accounts of the Dead Similar to the City Council Fake Non Profits Exposed by A Former Employees Lawsuit

Joseph Arenson and Phillip Beckerman, both law partner of surrogate candidate John Reddy and his predecessors as the Public Administrators counsel had illegal bank accounts in their name that distributed estate funds to other lawyers. That information came out as a result of a lawsuit by former counsel employee Connolly. No one was charged, however PA counsel Beckerman resigned and was replaced by his partner John Reddy.

“The official in charge of administering court-supervised estates in Manhattan has opened bank accounts normally reserved for the assets of dead people in the names of three lawyers working in her office, a practice that bank officials and law enforcement authorities describe as highly unusual, if not improper. Two of the lawyers say the accounts were opened without their knowledge and one has charged that his name was repeatedly forged on transactions. The official said the accounts were intended to hold money claimed by the lawyers, who are paid on a commission basis, for their work on estate cases. But records show that she disbursed money from the accounts to other lawyers doing estate work.” –NY Times, July 25, 1992

Update

Among the contributions (to Reddy campaign for Surrogate Judge) were donations of $20,000 each from Philip Bekerman and his wife, Roberta Bekerman. Mr. Bekerman, whose name remains on Mr. Reddy's law firm, Bekerman & Reddy, retired in 1992 due to illness - NY Law Journal, August 21, 2008.

Planned Delays and Mismanagement to Increase Legal Fees

During former State Senator and family court judge Karen S. Burstein's 1996 challenge to Surrogate Renee Roth reelection, Burstein said delays in the cases was a strategy used in the Surrogate office to allow a circle of friends and political allies to have benefited disproportionately.

"Ms. Burstein says, for example, that the surrogate defended the administrator's office and the Surrogate's Court before a State Assembly committee in 1988." - NY Times, September 7, 1996

“In candidates' forums and in interviews, Ms. Burstein has sought to tie Surrogate Roth to the mismanagement documented in the state reports. She has suggested that Surrogate Roth often resisted change. Ms. Burstein says, for example, that the surrogate defended the administrator's office and the Surrogate's Court before a State Assembly committee in 1988. Ms. Burstein also says that when the Manhattan Public Administrator, Bruno Cappellini, resigned under pressure in 1988, Surrogate Roth let his successor, Ethel J. Griffin, hire to the lucrative position of counsel to the public administrator a law partner of the previous counsel, who had also resigned under pressure.” – NY Times, September 7, 1996

Update

Hopeful 1

"Reddy said his 13 years as counsel to the public administrator of New York County has prepared him for the bench. Fewer than three years after being hired, Reddy had closed over 2,000 cases full of vague language or instructions that had been open for at least four years, he said. He is hopeful that he will be able to close Surrogate cases, some of which have been open even longer." – City Hall News, August 11, 2008

Hopeful 2

"With some wariness we endorse Justice Feinberg on the basis of his good record, and trust he will stay true to his reform pledges.” – NY Times Editorial, September 6, 1996

"In a harshly worded opinion, the Court of Appeals yesterday ended Brooklyn Surrogate Michael H. Feinberg's judicial career. It held that his awarding of millions of dollars in attorney's fees to a friend without demanding the affidavits required by law constituted removable misconduct." - New York Law Journal, June 30, 2005

2nd Follow-Up Report Found Surrogate Court Problems Worsened

The 2nd repot from the Attorney General and State Comptroller found the problems outline done four years after the first one have largely remained unabated and in some cases have worsened.

“The draft version of the latest report by the State Attorney General and State Comptroller concluded that few changes suggested by the last investigation had been adopted. It also said that, as before, the deficiencies in Manhattan were the bulk of the big estates were concentrated, were particularly alarming.” – NY Times, July 24, 1992

U.S. Attorney Calls Surrogate Court “Racketeering Enterprise”

“The latest critical report comes as Federal investigators are pressing a separate investigation into operations of the Surrogate’s Court, including the public administrators’ office. Yesterday, a politically connected Manhattan lawyer, Melvyn Altman, was indicted on Federal racketeering, mail fraud and money-laundering charges in what the United States Attorney in Manhattan, Otto Obermaier, called a continuing investigation that identified the Surrogate’s Court as a “racketeering enterprise” used by the defendant.” – NY Times, July 24, 1992

No Press Follow Up on Outstanding Issues

We are continuing our investigation to find a follow-up to the Attorney Generals and State Comptroller 2nd report in 1992 and what were the results of the U.S. Attorneys call for an investigation. Where have you gone institutional memory? Or at least Google.

Reddy Delays Payment, Chess Master’s Heir Loses His Inheritance

“Citibank Cheats Grandmaster Benko out of $70,000, Ruth V. Cardoso, the South American Woman's Chess Champion, was the constant companion of Grandmaster Pal Benko

Benko accordingly applied to the New York Surrogates Court for letters of administration. However, the court has an unusual rule that when a person dies without relatives, any person claiming under a will must prove to the satisfaction of the court that there are no living relatives. However, since it is impossible to prove a negative, the applicant must detail the steps that have been taken to locate any possible relatives of the deceased person. Although Ruth Cardoso had been born in Brazil and was a citizen of Brazil, she had been trapped in Nazi Germany during World War II and grew up there. All of her relatives had died in the war except for her mother who had died two years before Ruth died.

Following confirmation from the German government that she had no living relatives and the publication of the legal notices, the New York Public Administrators Office demanded that the witnesses to the will be produced to testify that Ruth Cardoso was of sound mind and body when she made out her will. However, the attorney assigned the task by the New York Public Administrator was John Reddy, who then delayed seven months and only issued his report after the Benko Family complained to the court that he was not doing his job. As a result of these delays by John Reddy, it took seven months until July 2004, before he issued his report. Benko then went to Citibank at 120 Broadway to collect the $70,000 that Ruth Cardoso had left to him, only to be told that Citibank did not have the money any more. They refused to reveal what had happened to the money.

-SURROGATES COURT: STATE OF NEW YORK COUNTY OF NEW YORK In the Matter of the Estate of Ruth V. Cardoso, Deceased FILE NO. 2546/2002 MOTION FOR REHEARING, http://groups.google.com.vn/group/soc.culture.usa/msg/7966f07bfb1a5355

Surrogate Judge Lambert: There is gambling in Rick’s Place

Although she does not want to prejudge Mr. Cappellini and Mr. Arenson, Surrogate Lambert said, she has long been concerned about the “Tremendous delay in distribution of money to heirs or depositing it and in the closing of estates.” When she became Manhattan’s supervising surrogate two years ago, Judge Lamberrt said, she “pressured them very hard to get their cases up to date.” – NY Times Nov 28 1987