Manhattan District Attorney Cyrus R. Vance, Jr., today announced the indictment of personal injury lawyer STEPHEN R. KRAWITZ, 62, for stealing more than $600,000 from settlements obtained for the benefit of more than a dozen of his firm’s clients. The defendant is charged in an indictment in New York State Supreme Court with two counts of Scheme to Defraud in the First Degree, four counts of Grand Larceny in the Second Degree, and 15 counts of Grand Larceny in the Third Degree.
“While these alleged crimes were taking place, one of Stephen Krawitz’s clients died of cancer without ever receiving the full settlement money rightfully owed to him,” said District Attorney Vance. “The defendant in this case is accused of stealing from multiple victims who were seriously injured, including a 96-year-old great-grandmother who broke her shoulder after being hit by a car, and a 20-year-old Russian foreign exchange student hospitalized for three months and forced to undergo brain surgery following a car accident. Neglecting to conduct oneself in a manner befitting an officer of the court undermines the entire legal profession.”
According to the indictment and documents filed in court, KRAWITZ owned STEPHEN R. KRAWITZ, LLC, a personal-injury law practice at 271 Madison Avenue in Manhattan. Between November 3, 2008, and March 12, 2014, the defendant received and deposited settlement checks on behalf of 18 clients totaling approximately $935,000. KRAWITZ is accused of withholding all settlement money from 16 of those clients, and the two remaining clients received far less money than they were owed. In November 2012 and again in March 2014, KRAWITZ’s Interest on Lawyer Accounts (“IOLA”) were severely depleted, while large outstanding amounts were stilled owed to his clients. As a result, KRAWITZ is charged with stealing approximately $627,000 from those 18 clients.
To further the fraud, KRAWITZ allegedly lied to multiple clients about the receipt of settlement funds, and also underreported the size of the settlement agreements. For example, on November 3, 2008, KRAWITZ is accused of depositing a check in the amount of $100,000 for the benefit of victim Robert Rough into his IOLA. In 2008 Rough was involved in a car accident and suffered nerve damage, which led to a loss of mobility in his hands. As a result of these injuries, Rough was unable to keep his business. For more than three years, KRAWITZ allegedly never informed his client that a settlement was reached, despite multiple inquiries from the client and his family. In October 2012, KRAWITZ acknowledged that a settlement was achieved, but allegedly underreported the size of it by $35,000. Mr. Rough died of cancer in the spring of 2014 at 74 years of age without ever having received any portion of his settlement funds.
In addition to the 18 clients, KRAWITZ is alleged to have withheld settlement funds and underpaid several other clients as part of the scheme.
Assistant District Attorney Jaime Hickey-Mendoza is handling the prosecution of the case, under the supervision of Assistant District Attorney Archana Rao, Deputy Chief of the Special Prosecutions Bureau; Assistant District Attorney Michael Sachs, Chief of the Special Prosecutions Bureau; and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Paralegal Laura Gronauer and Forensic Investigator Michelle Burgos are also assisting with the case.
1The charges contained in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. All factual recitations are derived from documents filed in court and statements made on the record in court.
STEPHEN R. KRAWITZ, D.O.B. 5/8/1952
• Scheme to Defraud in the First Degree, a class E felony, 2 counts
• Grand Larceny in the Second Degree, a class C felony, 4 counts
• Grand Larceny in the Third Degree, a class D felony, 15 counts