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New York Attorney General Letitia James announced on Wednesday, April 27 that she has filed a civil complaint against lawyers Paul P. Marchese and Robin S. Maynard, both of Manhasset, for allegedly paying themselves with funds meant for a charitable foundation.
According to the complaint, the client established a trust for her assets, and when she died, those assets were supposed to be transferred to a foundation she created to support education, cultural activities, and to provide food and shelter for people in need.
The lawsuit alleges that after she died, Marchese — as the sole administrator of her trust — directed the trust to pay their law firm nearly $600,000 in fees, and both he and Maynard — acting as the sole directors of the foundation — directed the charity to pay them more than $750,000 in salaries.
James’ lawsuit seeks a court order to force the pair to repay the funds, along with interests and penalties.
It is alleged that Marchese helped the client set up the foundation and trust worth $2 million, the remainder of which was to go to the foundation upon her death.
James said that Marchese was to act as a trustee upon her death and tasked him with transferring the cash to the foundation.
Following her death in 2008, it is alleged that Marchese directed the trust to pay the law firm $598,931.42 and neither lawyer could provide records showing the client owed any legal fees.
It is further alleged that Marchese and Maynard paid themselves salaries totaling $758,334 while unlawfully hiding the existence of the trust from officials.
According to James, “the governance of not-for-profit corporations must be overseen by a board with no fewer than three directors under New York law, and any compensation of directors must be approved by directors who have no conflicts of interest.”
The lawsuit seeks to have Marchese and Maynard repay the funds they received from their client’s estate and foundation, plus interest and financial penalties.
James also said that she is seeking to bar Marchese from serving as a fiduciary of an estate or a trust holding a charitable interest for a period of five years, and to ban both he and Maynard from serving as an officer, director, or trustee of a charitable organization for five years.
“Acting in their own interests, these lawyers allegedly failed to grant their client’s dying wish and hurt a charitable cause in the process,” James said in a statement. “New Yorkers must have trust in the individuals tasked with overseeing their affairs when they are no longer able to do so themselves. My office will continue to uphold the laws designed to protect the interests of our charitable organizations and hold accountable those who attempt to shirk their duties in order to line their pockets.”
Timothy Gilles, a spokesperson for the defendants, said "the legal fees and salaries paid during that time have been entirely typical and appropriate for the extensive work and broad range of services provided by the firm and its partners.
"The missing documentation is a result of a fire in the law firm’s office on Aug. 14, 2020, as well as the loss of documents due to incomplete records transfer during multiple transitions — from handwritten paper time sheets, to a primitive floppy-disk computer system, and ultimately to a more sophisticated law office technology package.
"As the Attorney General’s office is aware, most of these issues are already before the Surrogate’s Court in Nassau County in an action we filed last year. We are happy to resume discussions that stalled nearly a year ago with the Attorney General’s office to resolve this matter.
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