co-conspirators, U.S. District Court Judge J. Garvan Murtha sentenced dis-
barred lawyer Andrew J. Capoccia to 188 months imprisonment, for stealing
millions of dollars from thousands of clients, through his “debt reduction”
centers in New York and in Vermont. (WNYT.com, “Attorney gets over 15 years
for cheating clients;” Associated Press, “Capoccia sentenced to 15 years;”
Feb. 3, 2006) Albany Times Union‘s “His debt is 188 months in prison,” by
Alan Wechler; Rutland Herald‘s “Fraud mastermind gets 15-plus years in prison,”
by Daniel Barlow, Feb. 4, 2006.]
From his bench in Rutland, Vermont, Judge Murtha Murtha called Capoccia’s
crimes “horrendous” because they targeted victims who were trying to avoid
bankruptcy and because he purposely surrounded himself with “weak” asso-
ciates he could control and intimidate to maintain his fraudulent practices.”
Judge Murtha stated:
“This is judgment day as far as I’m concerned, Mr.
The TU reported that: “Before the sentencing, Vermont attorney [Tom]
Zonay made a passionate appeal to the judge, first asking that Capoccia
be sentenced to only two years in prison, and then asking that he be re-
leased after sentencing to allow him to work on an appeal. ‘He shouldn’t
be detained today,’ Zonay said. ‘There’s just no reason for it.’ Murtha
“He victimized thousands of people. He knew what he was
doing . . . As far as I’m concerned, Mr. Capoccia has no respect
for the law.”
“Murtha ended with an optimistic word for the man who will likely be in his
late 70s when he exits prison. ‘He has many talents,” Murtha said of
Capoccia. ‘Hopefully when he gets out of prison, he will be able to use those
Andrew J. Capoccia (1999)
Capoccia was convicted in April 2005 on conspiracy, laundering and fraud
charges. According to the Albany Times Union (“Capoccia sentence,” Feb.
“Capoccia had asked in a motion filed Wednesday not to be
sent away immediately, in order to work on an appeal. But
Murtha said he didn’t think an appeal would have merit, and
he also indicated he didn’t expect any of the Capoccia con-
victions to be reversed.
“Capoccia sold his debt-reduction firm to lawyers in Bennington in
2000. Three years later, the Law Centers closed, leaving thousands
of clients who had paid money to have their debts resolved in even
In addition to jail time, Capoccia will have three years of supervised release
and must make restitution of more than $7.26 million. He also must give 10
percent of all earnings after his release to victims. Three other co-defendants
have been ordered to pay more than $800,000 in restitution.
Prosecutors had asked for a sentence of 360 months in prison, or 30 years.
During Friday’s hearing, Zonay pointed out that others charged in the case had
disbarred lawyers, were given 3-months and one-month imprisonment, respec-
tively; Jerry Forkes, the former executive director of the Law Centers, and the
first co-defendant to enter into a plea arrangment, was sentenced to two years'
probation and ordered to pay $20,000 restitution.]
According to the Times Union, Assistant U.S. Attorney Gregory Waples pointed
out that the other defendants had pleaded guilty and testified against Capoccia.
“Their criminality, while substantial, is absolutely dwarfed by what
Mr. Capoccia did,” Waples said. “They seemed truly, genuinely contrite.
Mr. Capoccia, by contrast, is unrepentant.”
Waples, in the Herald story, described Capoccia as a white-collar criminal who
abused the trust of his clients by stealing their “children’s education savings and
mortgage payments.” “They went to Mr. Capoccia for help and only suffered
more,” he said.
AAG Waples told the judge Friday that prosecutors are still determining the number
of victims in the case and the total amount stolen. He estimated there to be more
than 5,000 victims found so far and the financial fraud total to be close to $23 million.
Waples said some of the restitution will come from nearly $3 million prosecutors
seized from accounts held by Capoccia’s wife. (Rutland Herald, Feb. 4, 2006)
“tinyredcheck” Although this may seem like a wonderful victory for justice, please take a
look at my lengthy treatment of this entire “debt reduction” matter in the
essay “blame bar counsel for letting Capoccia harm clients” (March 8, 2005).
As I lamented (with details) last year:
This lawyer scandal and client catastrophe could have been avoided —
minimized and stopped in its tracks — if bar counsel acted responsibly
and competently when the first barrage of suspicious ads came out in
1997; or when they received detailed complaints from myself, a member
in good standing of the bar [starting in Dec. 1997]; or when they were
flooded with client complaints (which at first were not even accepted, but
were instead referred to the State Attorney General’s office); or when news-
paper and tv reports emerged about angry and injured clients.
Or, or, or . . Instead, toothless and blind watchdogs did nothing, while their
cousin the wolf (with main offices on Wolf Rd. in Colonie, NY) plundered the
flock. There is little chance of reimbursement for the cheated clients and
many may never be able to repair their bad credit.
Because the debt reduction behavior was never challenged by the Grievance
Committees [he was disbarred for bringing frivolous lawsuits and ignoring court
orders], Capoccia’s partners were able, at their “Law Centers for Consumer
Protection,” to continue attracting and bilking clients — some say up to 20,000.
My first complaints against Capoccia were made when he was claiming to have
“helped hundreds of clients.”
I’m pleased that Judge Murtha has finally given a serious sentence in this case, but I’m
still angry on behalf of the unnecessarily injured clients and the unnecessary additional
blot on the reputation of lawyers. Effective lawyer discipline — especially the willingness
to investigate clearly excessive contingency fees* — would have saved a lot of people a
lot of misery.
* What made this scheme so lucrative for Capoccia was his
fee system. He said that he took “only” 25 or 27% of the
amount of debt reduction achieved for the client. In actuality,
he took the entire fee — usually thousands of dollars — up
front, before doing anything for the client, and calculated it
on the basis of clearly optimistic outcomes (predicting the
ability to reduce debts by 50 to 75%). If that scheme, which
clearly violated ABA Formal Ethics Opinion 93-373 (regarding
“reverse” contingency fees, which are based on savings, rather
than winnings), and ABA Formal Opinions 94-389, had been
declared unethical, there would have been no incentive for
Capoccia to continue providing his “service.”
you look too
in the grass
translated by David G. Lanoue
February 3, 2006
the U.S. District Court, Vermont, seems far too lenient to lawyer-
felons. We gave examples from two recent cases.
Well, he’s done it again, in the Andrew J. Capoccia Debt Reduction
fraud case — giving a one-month sentence to Thomas J. Daly, who
was one of the three main actors in a scheme that has left thousands
of clients with ruined financial histories and over $25 million in futile
claims for misappropriated monies by the Capoccia Law Centers of
Albany, N.Y., and (after Capoccia’s disbarment), its successor Law
Centers of Consumer Protection, in Bennington, Vermont.
The Rutland Herald reported yesterday (“Lawyer Admits Guilt in
Fraud,” Feb. 2, 2006):
“A former lawyer for a bankrupt debt-reduction firm in Bennington
is heading for a month in federal prison on fraud and tax evasion
charges. ‘I am so sorry,’ Thomas J. Daly, 44, of Bennington, told
Judge J. Garvan Murtha on Wednesday in U.S. District Court in
Rutland. ‘I did commit these crimes. I’m sorry for it’.”
” ‘You certainly played a role in the victimization of the people who
depended on you to do something for them’” Murtha told Daly . .
“The judge then sentenced Daly to one month in prison followed
by three years of supervised release, with three months of that time
to be served on house arrest. In addition, Daly was ordered to pay
“In his plea agreement, Daly acknowledged that he accepted nearly
$200,000 in bonuses — in addition to his $200,000 salary — at a
time when clients were demanding refunds of at least $1 million and
creditors of the firm were seeking even more.
“The money for the bonuses came from an escrow account and the
firm’s general accounts. According to federal prosecutors, Daly knew
or should have known that the firm was not capable of supporting those
payments, given that the firm had been embezzling client money to pay
its day-to-day expenses.”
As with the sentencing of his disbarred co-conspirator Howard Sinnott in
December, Daly’s role in this complicated, well-planned rip-off of consumers
who were trying to avoid bankruptcy (and the subsequent hiding of millions of
dollars sought by NYS and the federal government to compensate the victims
and creditors), was blamed on a personal flaw. Here, Daly’s defense counsel
told the court ”that his client’s life had been ravaged by alcoholism, contributing
greatly to his legal problems.”
According to today’s Albany Times Union, Andrew J. Capoccia the disbarred
mastermind of the debt reduction scheme (explained in a prior post), is expected
to be sentenced today by Judge Murtha. (“Capoccia faces sentencing today,”
Feb. 3, 2006). Although Capoccia, who was convicted after trial last year,
could receive up to 20 years, Judge Murtha’s wrist-slaps to his co-conspirators
suggests we may see more “professional courtesy” mercy. We’ll keep you
update (Feb. 3, 2006): See Capoccia gets 15 years for swindling clients .
“snowflakeS” For better judgment, consider the haiku and
senryu of our Honored Guest buddy Ed Markowski:
we have no advice
to offer the newlyweds
the downcast eyes
of a blue ribbon steer
a fireman turns
to face the flames
“midwinter dusk” – Mainichi Daily (#680, Feb. 2, 2006)