NY Attorney's Alleged Escrow Theft 'Stunning,' Experts Say
Legal Profession Team Co-Chair Trisha Rich was quoted in a Law360 article about recent allegations that New York City real estate attorney Mitchell Kossoff stole more than $10 million from clients' escrow accounts. The allegations point to an extreme example of a type of malpractice that is not unheard of, even though it is generally considered among the worst offenses, according to many legal ethics attorneys.
"There aren't many cases of this magnitude," said Ms. Rich. "The biggest theft case I've worked on is $300,000." Most civil law firms maintain escrow accounts in order to hold money that does not belong to them. Real estate firms often use them in property transactions for their clients, and personal injury practices often use them for settlements.
Theft often "tracks with practice areas where lawyers are touching client money and smaller firms that have fewer controls in place," she continued.