Here’s where Mitch Kossoff’s stolen money went
Real estate lawyer used clients’ cash for family business, lavish expenses
Convicted real estate attorney Mitch Kossoff is on the hook to repay more than $14 million he stole from dozens of clients to support his lavish lifestyle, authorities said.
After Kossoff pleaded guilty Monday to several charges of grand larceny and fraud, Manhattan District Attorney Cyrus Vance said the disgraced lawyer will be subject to judgment orders that require him to repay $14.6 million.
It’s unclear, though, how he will come up with the money. A felony conviction in New York triggers automatic disbarment, so even if Kossoff somehow avoids a long prison term — he faces up to 13 and a half years behind bars — getting his law license back could take years if it happens at all. And he is already 68 years old.
The court ordered Kossoff to surrender a condominium he owns in Highlands, New Jersey. Proceeds from its sale would over cover a small portion of what he owes, though.
Kossoff’s criminal defense attorney, Walter Mack, did not immediately respond to a request for comment.
According to the district attorney’s office, Kossoff used his clients’ escrow money to “live a lifestyle that would have otherwise been beyond his means.”
“He lived in a Manhattan rental apartment with monthly rent in excess of $19,000 and spent an average of more than $16,000 per month on credit card bills alone,” prosecutors wrote court documents.
Kossoff also used some of the money to sustain his family’s struggling business, Burton Packaging Company. In a Ponzi-like cycle, he would ask clients under false pretenses to deposit funds into escrow so that he could use the money to repay other accounts he had drawn down, prosecutors said.
Kossoff pleaded guilty Monday to defrauding 35 individuals and companies over a period of three years.
“I defrauded multiple clients of my law firm,” Kossoff said in copping to three charges of grand larceny and one of scheming to defraud. He remains free pending his sentencing, which is scheduled for April 6.
A handful of friends were in court to lend moral support to the disgraced ex-lawyer, who was known for his expertise on rent stabilization. In a bit of gallows humor, he mentioned wanting the Yankees to win another World Series but that he might not be able to see it.
After some clients raised questions about questionable account transfers in March, Kossoff dropped out of sight in April, prompting panicked inquiries by clients about the whereabouts of the millions of dollars they had entrusted to him.
The crime threw Kossoff’s law firm, Kossoff PLLC, into bankruptcy. Kossof and his attorney initially refused to hand over documents to the trustee tasked with unwinding the practice’s accounts.
Kossoff’s attorney argued that since his client was under criminal investigation, turning over the requested documents would violate his Fifth Amendment rights. The bankruptcy judge in November found Kossoff in contempt of court and told him he could avoid jail by handing over the requested paperwork.
Mack said in court on Monday that Kossoff is now cooperating with the bankruptcy proceedings.