Attorney Accused of Misappropriating Funds
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The Office of Attorney Ethics in New Jersey alleges that the lawyer who led the charge in the Holocaust class-action lawsuits against Swiss banks, Edward Fagan, misappropriated hundreds of thousands of dollars belonging to clients he represented in those cases.
The investigative arm of the New Jersey Supreme Court filed an eight page complaint against Mr. Fagan last month that charges he knowingly misappropriated funds associated with two Holocaust survivors. One of those survivors was one of the few plaintiffs to receive a special settlement check from the Swiss banks.
Mr. Fagan, who could not be reached for comment despite repeated attempts in the past week, has 20 days to respond to the complaint before it goes before a disciplinary review board. Though he is not charged with any criminal offense, the New Jersey Supreme Court has the power of to disbar him.
The complaint, suggesting that Mr. Fagan faced financial problems, alleges that he transferred funds without authority among several accounts to pay off various debts.
According to the complaint, Auschwitz survivor Gizella Weisshaus, lead plaintiff in the lawsuits Mr. Fagan filed against Swiss banks, retained him as the attorney for the estate of her deceased cousin Jack Oestreicher.
“He used my money. He used me,” Ms. Weisshaus, who is 75 and lives in Brooklyn, told The New York Sun.
In 1996, Oestreicher estate assets worth $82,583 were deposited by the estate’s original attorney to a trust account at Bank of New York controlled by Mr. Fagan. Between March 1996 and Oc tober 1997, Mr. Fagan, without permission from Ms. Weisshaus, removed all but $100 from the account, the complaint alleges. “He knew he lacked the authority to do so,” the complaint states.
New Jersey officials say in August 1998 Mr. Fagan restored the amount he took out by removing money from a different account, which held proceeds of a $500,000 Holocaust settlement check to Estelle Sapir, another of Mr. Fagan’s clients. Mr. Fagan transferred the money without the woman’s permission, according to the complaint.
Sapir had removed herself from the class-action lawsuit and received a special settlement check of $500,000 from the Swiss banks in May 1998. Mr. Fagan was legally entitled to $60,000 in legal fees from that settlement, the complaint states.
From May 1998 to April 15, 1999, the date of Sapir’s death, Mr. Fagan allegedly transferred without authority $302,750 from the settlement account to a business account, and he allegedly removed another $124,750 after her death.
Mr. Fagan was able to pay Sapir’s heirs almost $200,000 by borrowing money from Andrew Decter of New Jersey, a former insurance broker.
Former associates of Mr. Fagan’s said they have not talked to him for months and do not know how to reach him. He has an address in Morris Plains, N.J., according to the Office of Attorney Ethics.
In 1996, Mr. Fagan, a personal-injury lawyer, gained national attention when he announced that he was filing a class action lawsuit against Swiss banks, which he accused of stealing money from Holocaust victims.
Burt Neuborne, a professor of law at New York University and lead settlement counsel in the Swiss banks case, said Mr. Fagan’s involvement in the case ended when the $1.25 billion settlement was reached in January 1999. He said Mr. Fagan’s fees for the Holocaust litigation totaled $700,000. Speaking of the charges against Mr. Fagan, Mr. Neuborne said: “If they are true, that’s just horrible.”
If Mr. Fagan answers the complaint – which was initially reported by the Black Star News – then the New Jersey Supreme Court will appoint a special master to conduct investigative hearings.