State chief justice says case most egregious he has seen

Last updated: October 30. 2013 11:47PM - 4531 Views
By - rdupuis@civitasmedia.com

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HARRISBURG — Forty-seven claimants who allegedly were cheated by Wilkes-Barre attorney Anthony J. Lupas will receive $3.25 million from a fund established by the state Supreme Court, Chief Justice Ronald D. Castille announced Wednesday.

“The Lupas matter is one of the most egregious cases of attorney theft of clients’ escrow funds that I have seen in the 20 years that I have been on the Supreme Court,” Castille said.

Lupas stands accused of bilking investors out of more than $6 million over an 18-year period.

But federal criminal proceedings against Lupas, 78, are on hold until U.S. District Judge Robert Mariani rules on whether he is competent to stand trial.

Lupas’ attorneys have argued that their client suffers from an advanced stage of Alzheimer’s disease, has a failing memory and suffers from hallucinations and delusions. Prosecutors countered Lupas is faking the symptoms.

Castille said Lupas advised clients he would establish trusts on their behalf and act as the trustee with the promise they could either receive interest distributions from the principal or add the interest to the principal to grow their trusts.

‘Sting of Lupas

There is no evidence to support that any trusts were ever created, the judge said.

“Unfortunately, it appears that the client security fund will not be able to recoup the funds from attorney Lupas himself. Fortunately, the security fund, which is funded through Pennsylvania’s attorney registration fees, has sufficient reserves to cover claims up to $100,000 per claimant,” Castille added. “Most of Lupas’ clients will receive coverage of the loss of their principal, but others will still feel the sting of Lupas’ criminal conduct.”

The payments will come from the Pennsylvania Lawyers Fund for Client Security, which was created by the state Supreme Court in 1982 to reimburse clients who have suffered losses as a result of misappropriations of funds by Pennsylvania attorneys.

Through August, the fund had approved 34 awards against Lupas totaling $2,235,626. A majority of these awards have already been paid. At the board’s September meeting, it concluded an additional 13 claims against Lupas worth $1,014,757 were compensable.

Status of lawsuits

Attorney Ernie Preate, who represents more than 10 of the claimants, said his clients “generally were pleased with the settlement.” He said that while civil suits were filed against Lupas, they can’t proceed because “apparently, he’s unable to defend himself.”

Preate said he didn’t think any of his clients would want to speak with a reporter about the distributions from the lawyers fund, saying “They want to put this behind them.”

Attempts to reach some claimants, such as Frank Pisano and John Pisano, whom Preate described as “longtime friends” of Lupas and who “really felt betrayed” by him, were unsuccessful Wednesday.

Preate noted the lawyers representing the alleged victims in the case are not allowed to receive any contingency fees and are only eligible to receive payment to cover their costs. “But I’m pleased to do it,” he said.

Attempts to reach Lupas’ attorneys were unsuccessful.

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