When Trust Breaks: Attorney Fraud, Misconduct, and What Clients Can Do

Attorneys occupy a position of trust. You hire one to advocate for your rights, navigate complex law, protect your assets, and secure justice. But what happens when an attorney betrays that trust—engaging in fraud, misappropriating funds, or committing serious professional misconduct?

This article walks through a real-world case of attorney fraud and misconduct, then explains the remedies available to clients in New York State and Florida when a lawyer violates that trust.

Case Study: A Real Example of Serious Attorney Fraud

A well-known example of attorney misconduct involved Edward D. “Ed” Fagan, a former attorney who once handled high-profile international litigation matters. Despite his prominence, courts ultimately determined that he engaged in serious ethical violations, including misappropriating client and escrow funds and failing to properly account for money entrusted to him.

Judicial findings concluded that his conduct involved dishonesty, fraud, and misrepresentation—core violations of an attorney’s fiduciary duties. As a result, Fagan was disbarred in New York and other jurisdictions, permanently ending his legal career.

This case underscores an uncomfortable truth: attorney fraud is not limited to inexperienced or obscure lawyers. Even attorneys with name recognition and past successes can commit serious misconduct that devastates clients financially and legally.

What Constitutes Attorney Fraud and Misconduct

Attorney misconduct goes far beyond poor judgment or losing a case. Serious violations that may give rise to client remedies include misappropriation of client or escrow funds, false statements or deception regarding settlements or case status, breach of fiduciary duty for personal gain, and intentional failure to communicate or account for funds and case developments.

Both New York and Florida treat these actions as severe violations that may trigger professional discipline, civil liability, and in some cases criminal prosecution.

Remedies Available to Clients in New York State

Disciplinary Complaints and Professional Sanctions

In New York, attorney misconduct is regulated by the Appellate Division of the Supreme Court through Attorney Grievance Committees. Clients may file a grievance alleging ethical violations such as dishonesty, misappropriation of funds, or conflicts of interest. Proven misconduct can result in reprimand, suspension, or disbarment.

Civil Claims Under Judiciary Law § 487

New York provides a powerful statutory remedy under Judiciary Law § 487. An attorney who engages in deceit, collusion, or intentional misconduct toward a client or court may be held liable for treble damages. This statute is designed to punish intentional wrongdoing, not mere negligence, and can significantly increase a client’s recovery when fraud is proven.

Legal Malpractice and Fiduciary Claims

Clients may also bring civil lawsuits for legal malpractice, breach of fiduciary duty, fraud, or conversion. These claims can seek reimbursement of stolen funds, consequential damages, and in some cases punitive damages.

Remedies Available to Clients in Florida

Florida Bar Disciplinary Proceedings

In Florida, attorney discipline is governed by the Rules Regulating The Florida Bar and enforced by the Florida Supreme Court. Misappropriation of client funds is considered among the most serious violations and often results in disbarment. Clients can initiate the process by filing a complaint with The Florida Bar.

Civil Lawsuits for Damages

Florida clients may pursue civil claims against attorneys for legal malpractice, breach of fiduciary duty, fraud, or theft. These lawsuits allow clients to recover financial losses caused by intentional misconduct or negligence.

Client Protection Fund

Florida maintains a Client Protection Fund that may reimburse clients who suffer financial losses due to an attorney’s misappropriation of funds. While recovery is not guaranteed and is subject to eligibility requirements and caps, the fund provides an important safety net when attorneys cannot or will not repay stolen funds.

Criminal Consequences for Attorney Fraud

In both New York and Florida, serious attorney misconduct may also constitute criminal behavior. Theft, embezzlement, wire fraud, or falsification of records can lead to prosecution independent of disciplinary or civil proceedings. Criminal cases focus on punishment and deterrence, while civil cases focus on compensating victims.

What Clients Should Do If They Suspect Attorney Fraud

Clients who suspect fraud or misconduct should act quickly. Preserve all documentation, including retainer agreements, billing records, correspondence, and trust account statements. Consulting an independent attorney experienced in legal malpractice or professional liability is critical. Filing a bar complaint, exploring civil remedies, and, where appropriate, reporting criminal conduct can help protect both the client and the public.

Being defrauded by your attorney is a profound breach of trust, but clients are not without recourse. New York and Florida both provide strong disciplinary frameworks and civil remedies designed to hold unethical lawyers accountable and compensate harmed clients.

John Caravella, Esq

John Caravella Esq., is a construction attorney and formerly practicing project architect at The Law Office of John Caravella, P.C., representing architects, engineers, contractors, subcontractors, and owners in all phases of contract preparation, litigation, and arbitration across New York and Florida. He also serves as an arbitrator to the American Arbitration Association Construction Industry Panel. Mr. Caravella can be reached by email: [email protected] or (631) 608-1346.