NJ Lawyers’ Fund Reimburses Over $700K to Victims of Attorney Misconduct

NJ Client Protection Fund Addresses Misappropriations by Lawyers, Awards Claims in Fourth Quarter 2023

MORRISTOWN, NJ – In a significant move towards upholding the integrity of the legal profession, the New Jersey Lawyers’ Fund for Client Protection has compensated clients victimized by attorney misconduct. Between October and December 2023, the fund, overseen by trustees appointed by the Supreme Court of New Jersey, reimbursed a total of $708,864.40 across 16 claims, addressing misappropriations by 10 New Jersey lawyers.

These awards were necessitated by the theft of escrowed funds in real estate transactions and other civil matters, as well as cases where lawyers failed to deliver promised services despite receiving payment. Notably, two of the largest claims involved $300,000 and $257,21.40, misappropriated from a real estate matter and an estate, respectively.

The New Jersey Lawyers’ Fund for Client Protection, established in 1961 by the New Jersey State Bar Association and expanded in 1969, serves to reinforce trust in the legal community. Currently, 99,541 lawyers are practicing in New Jersey, with only a minuscule fraction ever involved in approved claims. Over its 54-year history, the fund has resolved 4,884 claims against 895 attorneys, amounting to $98,448,785.39, while recovering $26,472,099.43 from liable parties.

Court Rule 1:28 governs the fund's jurisdiction, allowing a maximum claim payout of $400,000 and up to $1.5 million per lawyer, subject to the Supreme Court’s discretion for higher limits. Compensable claims are those filed against New Jersey bar members acting as attorneys or fiduciaries during the incident. The fund does not cover legal malpractice, negligence, or fee disputes.

Claim forms and further assistance are available online, via mail, or by calling the fund's hotline. The fund operates without a filing fee, and claimants receiving help from practicing attorneys do so free of charge. The fund remains open to inquiries about its mission and operations.

The report concludes with a detailed fourth-quarter list of compensated claims, including the status of each respondent attorney under the Supreme Court disciplinary system. This transparency and accountability reflect the fund's commitment to protecting clients and maintaining the ethical standards of the legal profession in New Jersey.

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John Charles Allen (New Brunswick): Suspended on 2/23/2023, with claims amounting to $22,775.00 for dishonest retention of unearned retainer (4 claims).

Santo V. Artusa, Jr. (Jersey City): Suspended on 8/21/2023, with a claim of $7,700.00 for dishonest retention of unearned retainer.

Robert E. Barth, Jr. (Audobon, Deceased): Claims totaling $14,475.00 for dishonest retention of unearned retainer (4 claims).

Gerard Del Tufo (Matawan, Deceased): A claim of $500.00 for dishonest retention of unearned retainer.

Martin S. Fishman (Franklin Lakes): Suspended on 6/30/2023, with a claim of $90,000.00 for misappropriation of deposit money/real estate.

David J. Khawam (Audobon): Disbarred by consent on 3/2/2021, with claims totaling $266,914.40 for dishonest retention of unearned retainer (3 claims) and misappropriation of estate monies.

Bruce W. Lerner (Jersey City): Disbarred by consent on 7/20/2021, with claims totaling $300,000.00 for misappropriation of escrow money/real estate and deposit money/real estate.

James R. Lisa (Jersey City): Disbarred on 10/2/2023, with a claim of $1,000.00 for dishonest retention of unearned retainer.

Matthew D. Rasmussen (Freehold): Disbarred on 6/7/2023, with a claim of $1,500.00 for dishonest retention of unearned retainer.

David T. Schlendorf (Toms River): Disbarred by consent on 12/29/2022, with a claim of $4,000.00 for dishonest retention of unearned retainer.

Total Claims and Payments: $708,864.40 across 16 claims.