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There was something rotten in the state of Denmark. In this case, though, Denmark was Philadelphia-based Astor Weiss & Kaplan. Playing the part of Hamlet’s adviser Marcellus — the character who uttered that immortal line — was the firm’s managing partner, David Mandel. And what he thought was rotten was the behavior of his predecessor as managing partner, G. David Rosenblum. It was April 19, 2000, and Mandel had discovered that a check from a Rosenblum client did not appear in the firm’s billing system. That initial discovery led to Astor Weiss apparently unearthing evidence of Rosenblum diverting hundreds of thousands of dollars in fees into his own pockets. Mandel sent an angry e-mail message about a particular disputed fee to his former colleague, who had left the firm less than three months before to become an in-house counsel for ATM Services Ltd. of Tarrytown, N.Y. The following is one of several e-mail messages between Rosenblum and members of the firm obtained by The Legal Intelligencer: “To say I’m a little perplexed and disappointed would be an understatement,” Mandel wrote. “[Astor Weiss employee] Phil [Crane] says that you are claiming 75 percent of the fee. I believe, and I have not seen anything to change my belief, that this fee belongs to the firm. The check stub references a bill of 1-27-00. This clearly was a bill rendered prior to that time, although, strangely enough, we cannot locate a bill or time on our system. Why is that? “I would like, and after all these years, I think I’m entitled to an explanation. Are there others like this where time is not in our system? If my anger and disappointment is apparent, it should be. I never would have dreamed that you would have abused our partnership and friendship in that manner, yet I can draw no other conclusion. It’s almost as bad as us both agreeing to draw the same yet you somehow drawing $15,000 more. I know I am naive but now I feel stupid and victimized. Something is rotten in Denmark!” While Mandel was certainly angry, it is unclear whether he and his fellow Astor Weiss partners reported Rosenblum to the Pennsylvania Disciplinary Board. Attorneys specializing in legal ethics who were presented with the scenario believe that a firm’s failure to report a lawyer’s fraudulent diversion of fees is technically a violation of the Pennsylvania Rules of Professional Conduct. Though it is uncertain whether the disciplinary board was informed, Astor Weiss has allowed Rosenblum to make restitution by granting the firm an equity interest in his house and by having him transfer the proceeds of his various retirement funds to the firm. These repayments appear to represent more than $1 million. When reached in connection with this story, Mandel declined comment, saying it was against Astor Weiss policy to discuss former partners or the internal matters of the firm. Rosenblum himself issued a brief response via fax to an interview request. “I must put you on notice of that fact that [ The Legal Intelligencer's] information is both false and highly scandalous,” Rosenblum said. “However, my business arrangements with my former firm are personal, and I do not care to discuss them with you.” Paul Astor, now 73 and still a partner, started Astor Weiss in 1954 along with colleague Alvin Weiss. The 20-attorney firm’s strongest practice areas are family law and real estate, with a smaller presence in tax, bankruptcy, litigation, and trusts and estates. It boasts former partners such as Pennsylvania Supreme Court Justice Sandra Schultz Newman, U.S. District Judge Berle Schiller and state Sen. Vincent Fumo. Before resigning to take the in-house position in February 2000, Rosenblum had been with the firm for about 25 years, served as managing partner for more than 10 years and had risen to name partner status — the firm was called Astor Weiss Kaplan at the time of his departure. His practice focused on transactional matters, and his clients had become more technology-related during the dot-com boom of the 1990s. Although the details are unclear, it appears that Rosenblum issued bills to clients without putting them into the firm’s billing system and had clients write certain checks out to him rather than to the firm. In an e-mail from Rosenblum on Dec. 6, 1999, when he was still with Astor Weiss, to officials at ATM Services — which was then just a client — he instructed an ATM employee to make a fee check payable to “G. David Rosenblum, Esquire and send to me c/o Astor Weiss Kaplan & Rosenblum.” There is no evidence, though, that Rosenblum overbilled clients or that there were complaints about his legal work. After his departure in February 2000, at least one unaccounted-for check arrived at Astor Weiss. Rosenblum’s former partners caught wind of his activities and asked him to pay restitution, according to sources familiar with the situation. In another e-mail written May 15, 2000, less than a month after the April 19 correspondence, Mandel is still balancing the impact on the firm, his anger toward his trusted friend and colleague, and his desire to put the matter behind the firm. “I have not responded to your offers of apology because I am not sure how to,” Mandel wrote. “There are too many conflicting emotions to resolve this quickly. This is all too much to comprehend or believe. While I am angry about the consequences that your actions have had on the firm over the past eight years, I truly have no desire to see your life … ruined … . Hopefully, you will find a way to make restitution and while things will never be the same, we can all move forward.” According to other e-mail correspondence, Rosenblum spent the summer of 2000 figuring out how to pay restitution to the firm. On June 23, Rosenblum heard from solo practitioner Harvey Sernovitz, who wanted to set up a meeting so the two could talk about reimbursing the firm. When contacted for this story, Sernovitz, a former Astor Weiss attorney, would not confirm whether or not he represented the firm in the matter. But it’s clear through the e-mail correspondence that he was involved with the restitution process. “When we meet I want to begin the repayment process,” Sernovitz wrote. “I will be requesting that you sign appropriate documents to transfer the proceeds of your 401(k) and profit sharing plan to the firm … . These proceeds will not be adequate to fully repay the firm, so we need to discuss reaching the equity in your home.” As Sernovitz indicated, a substantial part of the payback came on Aug. 5, 2000, when Astor Weiss acquired an equity interest in and assumed two separate mortgages on Rosenblum’s Villanova home. According to records obtained from the Delaware County Recorder of Deeds, the two mortgages were in the amount of $630,000 and $150,000. Crane told Rosenblum in an Aug. 22, 2000, e-mail that the work up of Rosenblum’s pension rollover was valued at $235,525.56. And in a Sept. 11, 2000, correspondence, Crane acknowledged that the firm had received a distribution valued at $377,561.84 from Rosenblum’s IRA fund. There is a question as to whether the firm has an obligation to reimburse former Astor Weiss partners whose tenure overlapped Rosenblum’s. Ethics experts said they could not answer that question without reviewing the firm’s partnership agreement. Several former partners said they were not aware of the Rosenblum situation, and the luminaries who were once Astor Weiss partners did not have much to say about it. Newman, who was a name partner before leaving Astor Weiss in 1994, said she did not think it would be appropriate for a Pennsylvania Supreme Court justice to comment on such a matter. Schiller, who also left in 1994, said he would not be entitled to any money because of the nature of agreements he signed upon his departure. Fumo, who was with the firm from 1990 to 1993, said any potential shortchanging of partner profits would not directly affect him since he was not an equity partner at Astor Weiss. ETHICS ISSUES The larger issue, according to ethics attorneys, pertains to the firm’s obligation to report Rosenblum’s apparent misconduct to the disciplinary board. According to the Rules of Professional Conduct, Rosenblum’s actions could violate Rule 8.4 (b) and (c). Rule 8.4 (b) states that it is professional misconduct for a lawyer to “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.” Subsection (c) states that it is misconduct for a lawyer to “engage in conduct involving dishonesty, fraud, deceit or misrepresentation.” The guidelines for reporting professional misconduct are discussed in Rule 8.3 (a), which states: “A lawyer having knowledge that another lawyer has committed a violation of the Rules of Professional Conduct that raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects, shall inform the appropriate professional authority.” The appropriate authority in this instance would be the Pennsylvania Disciplinary Board. Paul Burgoyne, deputy chief disciplinary counsel, said he could not comment as to whether Astor Weiss officials had reported Rosenblum’s actions. He did say that while there have been several cases of misconduct reported, the board has “never had a serious violation of [Rule 8.3, reporting professional misconduct] reported.” Fox Rothschild O’Brien & Frankel partner and legal ethics expert Scott Vernick said that does not surprise him because, as a practical matter, it may be hard for the disciplinary board to determine who has failed to report an incident. He said the board is probably busy dealing with primary misconduct offenses and does not have the resources to dedicate to failure-to-report violations. University of Pennsylvania law professor and national legal ethics expert Geoffrey Hazard said while Rule 8.3 obliges a firm to report professional misconduct, it doesn’t say when a firm has to do so. “I assume they will say that they intended to report him once they were paid back and also so he could get rehabilitated, which would factor as a mitigating circumstance when it came time for sanctions,” said Hazard, who was told the general facts of the situation by The Legal Intelligencer but not given the identity of those involved. “When you’re trying to get [a large sum of money] back, whether it’s a law firm or not, you make sure you have restitution before reporting the person to the DA. If they didn’t report him, it’s technically not proper compliance with [Rule] 8.3. But the disciplinary authority could recognize that [the firm's partners are] in a bind and cut them some slack, or it might want to make an example of them. It depends who the authority is. There’s a lot of discretion there.” By June 7, 2000, Mandel’s anger at Rosenblum appears to have been overridden by an interest to guide the firm past his former partner’s betrayal and focus on the future. In an e-mail he sent that day, he commended Rosenblum for the “courage” it took to call Astor, surmising that it was “possibly the hardest thing that you ever did.” “I hope we all can agree on how you can right this wrong and move forward,” Mandel wrote. “There is still much life to live and I am sure that there will be a light at the end of the tunnel for you.” It remains to be seen whether that light at the end of the tunnel will carry with it a heavy price for both Rosenblum and Astor Weiss.

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