DA Vance: Former Attorney Sentenced to 4-to-12 Years in State Prison for Stealing Nearly $2 Million from More Than 50 Personal Injury Clients


September 29, 2015

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the sentencing of personal injury attorney STEPHEN R. KRAWITZ, 63, to 4-to-12 years in state prison for stealing more than $1.9 million from settlements obtained for the benefit of at least 57 of his firm’s clients. On July 29, 2015, KRAWITZ pleaded guilty in New York State Supreme Court to Grand Larceny in the Second Degree and Scheme to Defraud in the First Degree.

“The tragedy in this case is that many of Stephen Krawitz’s personal injury clients were unnecessarily forced to suffer further as a result of their own attorney stealing from them,” said District Attorney Vance. “Since the defendant was indicted in December, the investigation by my Office’s Financial Frauds Bureau uncovered nearly 40 other clients who have been victimized by this attorney. Taking advantage of their vulnerability, he pocketed nearly $2 million in misbegotten funds, including from one client who died of cancer without ever receiving the settlement money rightfully owed to him.”

“The theft of law client money is not only a crime but a violation of the trust placed in lawyers. On behalf of the 297,000 members of New York’s legal profession, the Lawyers’ Fund strives to restore that trust by reimbursing the financial harm caused by this one former member of our profession,” said Timothy O’Sullivan, Executive Director & Counsel for the New York State Lawyers’ Fund for Client Protection. “The Fund’s Trustees wish to express their gratitude to District Attorney Vance and to Assistant District Attorney Jaime Hickey-Mendoza for the successful prosecution of Mr. Krawitz and for the extraordinary support to the Lawyers’ Fund which has enabled our Fund to provide prompt reimbursement to Mr. Krawitz’s victims.”

According to his guilty plea and documents filed in court, KRAWITZ owned Stephen R. Krawitz, LLC, a personal-injury law practice at 271 Madison Avenue in Manhattan. KRAWITZ handled many personal injury and medical malpractice cases, which often resulted in a settlement owed to his client. Between November 2008 and March 2014, KRAWITZ stole approximately $1,913,155 from more than 50 clients by depositing their settlement checks into his Interest on Lawyer Accounts (“IOLA”) and using the money for his own personal benefit. During the course of the fraud, the defendant withheld all settlement money from a majority of the more than 50 clients, and others received far less than what they were owed. When questioned by his clients, KRAWITZ lied about the receipt of the settlement funds, and also underreported the size of the settlement agreements. Additionally, KRAWITZ settled multiple cases in Florida, New Jersey, and Connecticut without a license to practice in those states.

District Attorney Vance offers the following recommendations for avoiding fraud and misconduct when hiring an attorney:

•    Ask the following questions:

  • What are your credentials?
  • In what state are you licensed? For how long have you been licensed?
  • How many years of experience do you have in the field?

•    Obtain a written contract detailing the fees and services to be provided.

•    Do not sign blank documents or paperwork that has not been explained to you.

•    Inquire regularly about the status of your case.

•    Ask for copies of all paperwork filed on your behalf.

•    Make sure to get a receipt of any funds paid.

•    Confirm whether your attorney is licensed and in good standing by contacting the New York State Unified Court System, Attorney Registration Unit at 212-428-2800, or go to the following website:  http://iapps.courts.state.ny.us/attorney/AttorneySearch

•    If you have an active New York State or local court case, you may be able to independently confirm the status of your case by using “eCourts” at https://iapps.courts.state.ny.us/webcivil/ecourtsMain

•    If you suspect that you have been a victim of a theft by your attorney, please contact the Manhattan District Attorney’s Office’s Financial Frauds Hotline at 212-335-8900.

There are some additional resources available to victims of thefts by attorneys. To file a complaint against an attorney who is registered in Manhattan:

•    Contact the Departmental Disciplinary Committee for the First Department at 212-401-0800, or visit their website: http://www.nycourts.gov/courts/ad1/committees&programs/DDC/index.shtml 

•    In some instances, the New York Lawyers’ Fund for Client Protection may be able to provide reimbursement to law clients who have lost money or property as a result of a lawyer’s dishonest conduct in the practice of law, and who cannot get reimbursement from the lawyer who caused the loss, or from insurance or other sources. To file an application, contact the Fund at 1-800-442-FUND or visit their website: www.nylawfund.org

Assistant District Attorney Jaime Hickey-Mendoza handled the prosecution of the case, under the supervision of Assistant District Attorney Archana Rao, Deputy Chief of the Financial Frauds Bureau; Assistant District Attorney Michael Sachs, Chief of the Financial Frauds Bureau; and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Former Paralegal Laura Gronauer, Forensic Investigator Michelle Burgos, and Investigative Analyst Ellen Choi assisted with the case.

District Attorney Vance thanked the New York Lawyers’ Fund for Client Protection for its assistance reimbursing the victims in this case and attorney Rubin Ferziger, who was appointed as the receiver of all client files after the defendant’s disbarment.

Defendant Information:

STEPHEN R. KRAWITZ, D.O.B. 5/8/1952
Westport, CT

Convicted:
•    Grand Larceny in the Second Degree, a class C felony, 4 counts
•    Scheme to Defraud in the First Degree, a class E felony, 2 counts

Sentenced:
•    4-to-12 years in state prison
•    Confessions of judgment in the cumulative amount of approximately $1.8 million