Attorney General James Recovers $510,000 for Charity from Long Island Lawyers Accused of Misusing Charitable Assets for Personal Benefit

 

Paul Marchese and Robin Maynard Made Improper Payments to Themselves from Deceased Client’s Funds Intended for Charity

New York Attorney General Letitia James today announced a settlement with Paul Marchese and Robin Maynard, two Long Island lawyers who allegedly illegally paid themselves more than $1.3 million from a deceased client’s trust and charitable foundation. Following the death of their client, Helen Gottlieb, Mr. Marchese and Ms. Maynard were in control of funds that Ms. Gottlieb had left for charity. Mr. Marchese unilaterally paid his law firm nearly $600,000 in fees without reporting the financial transactions to the Office of the Attorney General (OAG), as required by law. Additionally, he and Ms. Maynard improperly paid themselves salaries from the foundation in excess of $750,000. As part of the settlement, Mr. Marchese and Ms. Maynard will have to pay $510,000 in restitution and may not serve as officers or directors of a not-for-profit corporation or any other charitable organization for three years unless authorized by OAG to do so.

“New Yorkers who generously donate to charity upon their death deserve to have their wishes honored,” said Attorney General James. “Mr. Marchese and Ms. Maynard abused their positions and misused funds entrusted to them, depriving others of significant charitable donations intended to help the most vulnerable. My office will ensure that these funds will be used as intended and continue to enforce the laws that protect charitable organizations.”

Mr. Marchese established a charitable foundation and a trust for Ms. Gottlieb. The trust held $2 million in assets to fund her foundation upon her death. After Ms. Gottlieb died in 2008, Mr. Marchese directed the trust to pay his law firm, Marchese & Maynard LLP, fees totaling $598,931.42. Mr. Marchese and Ms. Maynard were unable to provide attorney time sheets, invoices, or receipts to prove that they provided legal services worth nearly $600,000 or that Ms. Gottlieb knew of or agreed to pay Marchese & Maynard LLP that amount.

Over the next decade, Mr. Marchese and Ms. Maynard also paid themselves salaries totaling $758,334 as directors of Ms. Gottlieb’s charitable foundation, in violation of New York law. These salaries were substantially greater than the amount the foundation disbursed in charitable grants.

In the settlement, Mr. Marchese and Ms. Maynard admitted to failing to register the trust after Ms. Gottlieb’s death, failing to retain timely records of the trust’s expenditures, and operating Ms. Gottlieb’s foundation without a legally constituted board of directors. As a result, they set their own compensation without review by nonconflicted directors. They also failed to adopt and adhere to a conflict of interest policy.

As part of the settlement reached with OAG, the foundation will be dissolved and all of its remaining assets, which together with the restitution funds exceed $1 million, will be disbursed to other charitable organizations under the supervision of OAG.