The Real Deal New York

RE attorney Claude Castro suspended

Attorney allegedly mishandled client funds
By Kathryn Brenzel | December 26, 2017 08:00AM

Real estate attorney Claude Castro was suspended after allegedly misappropriating money from clients who were feuding with their landlord.

A state Appellate Court committee suspended Castro on Oct. 31, finding that he repeatedly dipped into an account that he was supposed to be holding in escrow for his clients. From August 2010 to July 2012, the client’s account went from having $58,150 to $562.27, according to Documents Filed With The Court.

Castro could not be reached for comment.

His clients, Steven and Jodee Martin, filed a complaint against Castro in November 2014. They had hired Castro in 2010 to represent them in a dispute with their landlord, Milstein Properties. The Martins stopped paying rent due to a bug infestation in their building at 201 East 87th Street, according to their complaint. They instead diverted their rent money to Castro, to be held in escrow while the dispute with the landlord played out.

But when the Martins repeatedly asked for the funds to be released, Castro allegedly failed to abide. Castro has argued that he disbursed $34,890 to Milstein at the instruction of the court. But according to the appellate committee, Castro misappropriated much of the rest.

Castro, who was admitted to the bar in 1976, represented broker Georgia Malone in a lawsuit against Extell Development in 2012. Malone argued that Extell owed her a larger commission on the sale of a group of buildings in Westbourne. Extell was ordered to pay Malone $1.5 million in 2014.

In March 2015, attorney Luigi Rosabianca, was suspended based on similar allegations of mishandling client’s money. He was disbarred four months later.