Manhasset lawyers misappropriated $1.3M from charity, AG James says

State Attorney General Letitia James has sued two Manhasset attorneys and their law firm, claiming misappropriation of more than $1.3 million from a charitable trust they administered on behalf of a deceased client.

The lawsuit was filed Tuesday in Nassau County Supreme Court against attorneys Paul P. Marchese, Robin S. Maynard and their firm, Marchese & Maynard, LLP.

In a statement Wednesday, James said Marchese had helped Helen Gottlieb set up The Harold and Helen Gottlieb Foundation as well as the charitable trust, worth about $2 million, with Marchese acting as the trustee upon her death.

According to James, following Helen Gottlieb's death in 2008, Marchese, as sole administrator of her trust, directed it pay the law firm $598,931.42. Then, James said, Marchese and Maynard, acting as sole directors of the foundation, paid themselves salaries totaling $758,334.

Under state law, the governance of not-for-profit corporations must be overseen by a board of no fewer than three directors and any compensation must be approved by directors who have no conflicts of interest.

The complaint alleges Marchese "concealed" the transfers by hiding the existence of the trust.

It seeks a court order directing Marchese and Maynard to repay the funds, plus interest and penalties. The suit also seeks to bar Marchese from serving as a fiduciary of an estate or a trust holding a charitable interest for five years, and to bar both Marchese and Maynard from serving as an officer, director or trustee of a charitable organization for five years.

Under state law, fiduciaries of a trust holding charitable interests must register it with the attorney general's Charities Bureau and provide a report of funds transferred out of the trust. James said Marchese never registered the trust and did not provide a report until 2019 — after her office had begun an inquiry, learned of the trust and asked for an accounting.

James also said neither Marchese nor Maynard could provide records showing the client owed them any legal fees.

In a statement, a spokesman for the firm called the legal fees and salaries "entirely typical and appropriate" given the "extensive work and broad range of services provided by the firm and its partners."

The firm, as well as a predecessor, have represented Helen Gottlieb for 24 years, said the spokesman, Timothy Gilles.

As for the missing documentation, Gilles blamed its absence on a fire at the law firm's office in 2020, as well as "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," Gilles said. "We are happy to resume discussions that stalled nearly a year ago with the attorney general’s office to resolve this matter."

In a statement, James said: “Acting in their own interests, these lawyers allegedly failed to grant their client’s dying wish and hurt a charitable cause in the process. 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.”

By John Valenti

john.valenti@newsday.com

John Valenti, a reporter at Newsday since 1981, has been honored nationally by the Associated Press and Society of the Silurians for investigative, enterprise and breaking news reporting, as well as column writing, and is the author of “Swee'pea,” a book about former New York playground basketball star Lloyd Daniels. Valenti is featured in the Emmy Award-winning ESPN 30-for-30 film “Big Shot.”