Lawyer charged with stealing millions in assets from more than 20 disabled people

From The NY Times:

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.