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He had hoped to be a rabbi, failed at business and ran a struggling legal practice before he stumbled into the Holocaust litigation and a potential gold mine in legal fees

 The New York Times on the Web
reports on the great Holocaust Industry shakedown and the shysters running it for money
New York, September 8, 2000


Lawyer in Holocaust Case Faces Litany of Complaints

September 8, 2000


Ed FaganLess than four years ago, a little-known personal-injury lawyer named Edward D. Fagan stood next to an Auschwitz survivor at a news conference in New York and announced an audacious lawsuit, accusing Swiss banks of stealing money 50 years ago from those who died in the Holocaust.

Today, Mr. Fagan has a new and glamorous career and is likely soon to earn millions of dollars in legal fees. He has since filed lawsuits against banks, insurers and other companies in Austria, Germany and elsewhere, charging that they too profited from Nazi ties or exploited victims. Settlements of actions against Swiss banks and German industry worth over $6.2 billion were recently approved.

Dozens of lawyers got involved in the Holocaust claims. But the 47-year-old Mr. Fagan cast himself a part as a media-savvy street fighter who became the public point man in the cases. This July, he hopscotched in a few days from Berlin to Vienna to Warsaw on behalf of tens of thousands of people whom he and lawyers associated with him represent.

They have also opened a second front, charging Japanese companies in lawsuits with using thousands of Asians and others as forced labor during World War II.

"It's like a posse," the tall, curly-haired and engaging Mr. Fagan said. "There are all these bad guys all over the world, and we have to track them down."

His mission, he said, is to reach back into history and force a reckoning with those who profited from evil. But an investigation by The New York Times and the ABC News program "20/20" has found that Mr. Fagan is facing his own reckoning.

As he recast himself as a "human rights" lawyer, Mr. Fagan left neglected personal-injury clients in his wake, abandoning their claims or not returning their phone calls for years, according to court papers and interviews. One former client recently won a malpractice judgment against Mr. Fagan and ethics officials in New Jersey filed a misconduct complaint against him last month on behalf of another client.

Mr. Fagan, so at ease with using the emotional force of the Holocaust as a weapon, also ignored for months scores of calls and letters from aging Nazi-era survivors anxious about whether their claims had been received, said a paralegal who worked last year for him and his partner at the time. That paralegal, Jane Warshaw, was so distressed by what she saw that she wrote in January to the judge handling the Swiss banks case to complain.

"I never expected to witness what I have seen at this office," she wrote. "What is happening to these poor, old, injured and neglected people is heartbreaking."

For his part, Mr. Fagan conceded he may have failed some clients by taking on too much work. But he insisted that he did his best to represent his personal-injury clients and that he labored ceaselessly in the Holocaust cases without financial guarantees, winning results few would have imagined.

"It was remarkable to be a lawyer and to be able to use your profession to do good," he said. "To change history. To stand up for people's human rights is incredible, and that's what we did."

Mr. Fagan's conduct does not appear to have jeopardized the financial claims of his Holocaust clients. In any settlement, they would be eligible for the same compensation as clients of more attentive lawyers. But several survivors he represented say that his failure to return calls for months, even years, took a wrenching emotional toll. Legal-ethics experts say lawyers are obligated to answer client queries within a reasonable period, even in a huge class-action suit.

Mr. Fagan is a frenetic man who appears inseparable from his cell phone. He had hoped to be a rabbi, failed at business and ran a struggling legal practice before he stumbled into the Holocaust litigation and a potential gold mine in legal fees. In the Swiss banks suit alone, he seeks $4 million, the most for any lawyer in the case.

There is little question that Mr. Fagan played a leading role in promoting the Holocaust claims, cases whose moral charge made them a public cause. He specialized in shaming companies and governments, orchestrating demonstrations and prayer vigils. Some Holocaust survivors and advocates view him as their champion.

"He is a master in public relations," said Hannah Lessing, an official of a state-financed group in Austria for Holocaust victims. "Behind all the facade of yelling and screaming, there is a man who cares for survivors."

But he also made it his business, while other lawyers were painstakingly developing legal claims, to be first at the courthouse, gaining leverage with a hasty filing. A news conference with an aged survivor would follow, drawing in a flood of clients.

Mr. Fagan represents far more Holocaust claimants than most other lawyers, giving him a powerful role in negotiations. The actual number of clients is apparently a matter of some confusion. In one interview, Mr. Fagan put the figure at 82,000, but his own lawyer cited a different one -- 52,000 -- in a March response to a client complaint.

Other lawyers in the Holocaust cases say Mr. Fagan's ambitions vastly outstripped his resources to deal with the huge numbers of clients he took on and added that he was often absent for the legal fight. Burt Neuborne, who had worked with Mr. Fagan before breaking with him, said Mr. Fagan's filing in the Swiss banks case was so inadequate that a judge asked him to rewrite it.

"This was an ordinary man who got swept up in issues that were bigger than he was," said Mr. Neuborne, a law professor at New York University. "He didn't understand and eventually didn't really know how to behave and just got swept away in the current of his own ego and his own ambition."

'Here Are Defendants'

Mr. Fagan has said that two pieces of information led him to the Swiss banks case. The first was a 1996 article in The New York Times about Nazi gold and Swiss banks. The other came from a longtime client, Gizella Weisshaus, an Auschwitz survivor who told him of her family's Swiss account.

He recalled: "I thought, 'Oh, my goodness, I'm a lawyer, here are defendants. I don't know who the plaintiffs are, I don't know who the plaintiffs are going to be, but someone is going to pay.' "

The Swiss banks case would also apparently be the way to satisfy his gnawing hunger for acclaim.

Born in Harlingen, Tex., Mr. Fagan grew up in San Antonio with two brothers and a sister, all from his mother's first marriage. Mr. Fagan's father abandoned the family, said Wayne Fagan, the lawyer's oldest brother. His other brother, Avraham, embraced Orthodox Judaism and Mr. Fagan followed him to Israel.

"I wanted to be a rabbi," he said.

His religious ardor waned, and Mr. Fagan returned to this country and enrolled in Cardozo Law School in New York, a part of Yeshiva University, graduating in 1980.

He spent several years with a large law firm that represented corporate defendants. But in the late 1980's, Mr. Fagan, searching for something with more panache, tried to start an exploration club for the wealthy. Travelers would sail by yacht to exotic locales, accompanied by ocean scientists and environmentalists. In 1991 he set up the Odyssoe Foundation, a nonprofit arm of the business, to support environmental research. But the whole venture fizzled.

In 1994, soon after returning to law, he rented the entire 21st floor of the former Standard Oil building in lower Manhattan, complete with the original, opulent board room. He tried to support his tiny firm, Fagan & Associates, by subletting space to other lawyers and advertising for personal- injury clients in the yellow pages.

He was eager, however, for the spotlight, trying to interest a tabloid in one case. In 1994, he asserted in a fax to the Star magazine that the actor Sylvester Stallone had tried to defraud a client of his who owned three paintings by Mr. Stallone.

"There has never been been an article of this nature with a celebrity (of this stature) involving fraud and his artwork," Mr. Fagan wrote, according to papers in a libel suit that Mr. Stallone filed against him in 1994.

The magazine never published the article, and Mr. Stallone withdrew his libel action.

In another case, Mr. Fagan got on television representing a 6-year-old Queens girl who had been stabbed with a hypodermic needle by a homeless man on the subway.

But at the same time, his finances and his business ties were unraveling, public records show. He began to owe large amounts of federal income taxes, a debt he said he has mostly paid off. In 1996, the yellow pages unit of the former Nynex Corporation filed a $228,000 lawsuit against Odyssoe in a New Jersey court for unpaid services like advertisements for his legal practice.

Mr. Fagan said he ordered the advertisements through the nonprofit organization, rather than his law firm, because it was also the billing address of some phone lines at his firm. He said he believed the matter was resolved, but a spokeswoman for Verizon, the successor to Nynex, said the bill was still outstanding.

Faced with an eviction proceeding for unpaid rent, he was forced in 1997 to leave his lavish offices and rent space from a law firm in the World Trade Center.

The acrimony of his professional life spilled over into his closest relations. In the mid 1990's, Mr. Fagan severed ties with his three siblings, said his brother Wayne, a lawyer in San Antonio.

Wayne Fagan said: "Eddie was a warm, jovial person who was like a pied piper. But something happened and Eddie just changed."

The Cases Left Behind

With Mr. Fagan's claim against the Swiss banks on behalf of Mrs. Weisshaus and others in late 1996, he embraced a new mission. But the claims of some of his personal-injury clients were apparently abandoned or forgotten.

One was Hector Ortiz. In 1992, Mr. Ortiz, a 49-year-old truck driver, smashed into the back of a slow-moving crane, shattering bones and sustaining head injuries.

In 1994, Mr. Fagan filed a $35 million lawsuit on his behalf in federal court in Brooklyn and brought a similar action in State Supreme Court there. He aggressively pursued the federal claim until late 1996, court papers and interviews indicate.

In 1998, however, Judge Sterling Johnson Jr. of Federal District Court dismissed Mr. Ortiz's federal lawsuit. In doing so, he also noted that Mr. Fagan had "failed to prosecute" it for three years and had ignored court orders. Mr. Ortiz's claim in Brooklyn state court has lain dormant for three years.

Mr. Fagan said that he had told Mr. Ortiz about a year ago that his federal claim was dead but that he had not yet informed him that the state case also appeared at an end.

Mr. Ortiz, who has not worked since the accident, disputed that account, saying in a phone interview that he had not seen or spoken with Mr. Fagan for more than two and a half years. "I was waiting in vain," he said. "I didn't know something like this could happen. Right now I'm confused. I don't know what to do."

Another client, Tom s Giron, was struck and severely injured in 1992 by a car reported stolen. Mr. Fagan said that he had made a claim for Mr. Giron to a New York state fund that compensates victims of uninsured motorists but that it had been denied.

Jeffrey Rubinton, the fund's president, though, said in an interview that its records showed that such an action had not been pursued and that the statute of limitations on making one had long expired.

In January, a former client, Offer Salmoni, won a $167,000 malpractice judgment against Mr. Fagan, which the lawyer did not contest. Mr. Fagan had filed a lawsuit on Mr. Salmoni's behalf in 1993 to contest an eviction. Mr. Salmoni charged in a 1998 lawsuit that Mr. Fagan had allowed that claim to be thrown out by repeatedly failing to make court appearances and had let the statute of limitations expire without refiling. Mr. Fagan, who is licensed to practice in New York and New Jersey, said he planned to settle with Mr. Salmoni.

Last month, New Jersey ethics officials, after a preliminary inquiry, filed a misconduct complaint before a grievance committee against Mr. Fagan on behalf of another former client, Diane Gibbons. Ms. Gibbons had complained to the ethics board that Mr. Fagan's failure to file required papers in her personal-injury action led to its dismissal. Mr. Fagan said he could not comment on the matter because it was pending.

Stephen Gillers, a legal-ethics expert at New York University who is not involved in the Holocaust litigation, said lawyers faced sanctions if they ignored existing claims when the prospects of bigger awards beckoned. "Your loyalty to your original client is undiluted," Mr. Gillers said.

Some personal-injury clients, whose names were provided to The Times by Mr. Fagan, said that he fought difficult cases for them, and that they would use him again. But Mr. Fagan acknowledged that he failed to withdraw -- as lawyers are required to -- from suits that he did not pursue.

"I was in over my head a lot of the time," he said. "But now I'm digging out, for me and for them."

Unanswered Calls, New Inquiries

By late 1999, with the Holocaust cases on the way to settlement, Mr. Fagan had established his place on the world stage. When Jane Warshaw, a paralegal, was sent by a temporary-help agency to work that fall for him and his then-partner at the World Trade Center, she was thrilled.

"I thought they were doing God's work," Ms. Warshaw said.

Ms. Warshaw, 57, said that Mr. Fagan's partner at the time, Carey R. D'Avino, asked her to check the office's telephone answering system. On it, she found more than 100 unanswered messages from Holocaust survivors as well as personal-injury clients, including Mr. Ortiz. It sounded like many had been desperately calling for a year or more.

Stacks of unopened letters from Holocaust survivors or their heirs were scattered around or stuffed in a drawer, she said. "They must have gotten their hopes up and then, there again, they were told that they just didn't matter," she said.

Ms. Warshaw said she suggested to Mr. D'Avino that she prepare a newsletter to keep clients updated, an accepted practice in class-action suits. The lawyer said he told her that their clients were already getting periodic newsletters. He described her as "well-meaning" but "out of the loop."

In January, troubled by what she viewed as client neglect, Ms. Warshaw sent a recording of those calls to Judge Edward R. Korman of Federal District Court in Brooklyn, who is overseeing the Swiss banks case. She also provided materials to The Times and ABC News.

The picture emerging from the documents and tapes is chaotic. New York disciplinary officials were investigating complaints by three of Mr. Fagan's clients. Calls from Holocaust claimants were bounced from one answering machine to another.

One caller, Bella Ross, said her parents, concentration camp survivors, were ecstatic when Mr. Fagan took their case in 1998. "They thought, you know, they had this savior," Ms. Ross said in an interview. "I mean, this is the man. You saw him on TV. You heard about him on the radio. You see him in print. He is everywhere. It was like finally they were blessed."

By last year, however, the family was so concerned about Mr. Fagan's lack of response to dozens of messages and faxes that she filed a complaint with New York disciplinary officials. "To date," Ms. Ross wrote in December, "Mr. Fagan has done nothing to update my parents on the status of their case and is literally unreachable."

Hal R. Lieberman, a lawyer representing Mr. Fagan in the matter, told investigators in a March letter responding to Ms. Ross's complaint that Mr. Fagan could not possibly deal with each of his tens of thousands of clients. Both Mr. D'Avino and Mr. Fagan said in interviews that they had met their ethical obligations to their clients; to date, there have been no findings against them.

Other Holocaust lawyers, though, were devoting more extensive resources to client communication. While some used paralegals to handle calls, Mr. Neubourne, the New York University professor, said he set aside four hours a week to deal directly with survivors, including many of Mr. Fagan's clients who called him out of frustration.

"These are people who lived with these memories for so long," Mr. Neubourne said. "The memories were then opened up, somebody told them something was going to happen. And then they just got cut off."

Some clients said Mr. Fagan returned phone calls promptly and others involved in Holocaust-related issues said they also had had far happier experiences with him. They described him as a passionate advocate who took up a fight that traditional Jewish groups had allowed to languish.

"Ed was the only true source of light," said Dr. Thomas Weiss, an ophthalmologist in Miami Beach active in Nazi-era claims against insurers. "He saw himself as picked by Providence to lead this charge."

For his part, Mr. Fagan described Ms. Warshaw as a "disgruntled former employee," though he conceded that some of her concerns ere legitimate.

He said he spent much of his time in recent years traveling and that only a few clients had complained. "The truth of the matter is that some people are going to be unhappy," he said.

Ms. Warshaw's complaint was referred to court officials, and Mr. D'Avino said that an investigator contacted him. Mr. Fagan said an assistant was hired in June to answer calls, resolving the matter.

A court official said the existence of an inquiry would not be confirmed or denied until a judge issued a ruling.

Haggling at the Top

In July, Mr. Fagan arrived in Berlin as part of a victory lap in two of the most significant cases. To settle slave-labor claims against German industry, the government and companies there had approved a $5 billion fund to compensate Nazi-era survivors. Not long after, Judge Korman in Brooklyn approved the $1.25 billion settlement of the Swiss banks case.

Mr. Fagan savored the moment, joining government officials, industry leaders and the heads of Jewish groups at the signing of the German agreement. "I know for a fact that the majority of these cases wouldn't have happened without me," he said. "That's not bravado, it's just a fact."

During the signing, though, Mr. Fagan dickered by cell phone with Stuart E. Eizenstat, the United States deputy treasury secretary, about lawyers' fees and other issues.

Under the German plan, two arbitrators are to decide how to award legal fees. Mr. Fagan argued with Mr. Eizenstat, who led negotiations in the case for the American government, that he understood that the arbitrators had up to $75 million to award, not the $62.5 million to which some other plaintiffs' lawyers had agreed.

After the call, Mr. Fagan telephoned a partner and said, "I got the legal fees up." But his excitement was premature; documents show that the lower figure was used.

Mr. Eizenstat said Mr. Fagan, after failing to get higher fees, then asked for a letter testifying about his efforts in the German case because he feared that lawyers critical of his conduct would seek to reduce his payout. Mr. Eizenstat said he agreed to write such a letter because he felt Mr. Fagan had played a constructive role.

Mr. Fagan's fears are well-founded. He is seeking $4 million in the Swiss banks case, twice as much as any other lawyer. In class actions, a judge or court-appointed expert determines fees, and lawyers argue that they deserve sizeable fees because they took great risks and helped resolve the case.

But Mr. Neuborne and others said they would argue for a far lower sum for Mr. Fagan in the Swiss banks case, contending that his contribution was minimal.

"His only gift was for publicity," said Martin Mendelsohn, a lawyer in Washington who worked on the Holocaust claims. "But this was a lawsuit. It was not theater."

New Clients to Pursue

Late last year, Mr. Fagan and lawyers associated with him set their sights on Japan. They fanned out to Australia, Hong Kong, South Korea, New Zealand and the Philippines in a bid to sign up thousands of people who claimed they had been used as forced laborers, including former American and Allied prisoners of war.

Gil Hair, director of a group in Miami that represents American civilians interned by the Japanese, said that Mr. Fagan called him in December and characterized himself as the "hero of the Holocaust" cases before he began his sales pitch. Mr. Hair, who already had a lawyer, declined.

In December, Mr. Fagan flew to Tokyo to make client contacts at a conference held by groups representing victims of Japanese wartime aggression, said several people who attended the meeting.

Public demonstrations soon followed. This summer, hundreds of old men and women passed into a park in Seoul, South Korea, under a banner that, roughly translated, read, "For the first time in 55 years we have brought action by human rights lawyers from the United States against the Japanese."

At the rally's end, a Korean folk band playing drums and cymbals led the crowd down a Seoul street as a man chanted through a loudspeaker "The Japanese government should repent and compensate for their atrocities of World War II. Repent. Repent. Repent."

Holocaust typhus corpsesMr. Fagan said he planned to move forward, addressing more World War II wrongs and other human rights causes. But some, like Ms. Warshaw, can only see the trail of broken promises and failed hopes he has already left behind.

"I don't see how you can ignore someone, especially when you've said, 'I'm here to help you, I'm going to help you,' " she said.


Picture supplied this website:
Holocaust typhus victims at Buchenwald

Related story on this website:
: Prominent Holocaust Claims Lawyer Accused of Neglecting Clients

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