Public administrator (PA) is a Surrogate
Court-appointed fiduciary, and the Surrogate Court Judge has the
statutory mandate to oversee and manage the office of the PA. PA
manages the estates of Brooklyn residents who die without a will. In
that capacity PA has a fiduciary duty to conduct investigations to
identify assets, collect assets, make and pay for funeral arrangements.
The 3 Audits Show Continued Incompetence, Corruption and the Inability to Fix the Problems
Comptroller Thompson 2009
Daily news, July 6, 2009: [Comptroller] Thompson's
auditors found a 'culture of mismanagement and laziness' in Brooklyn's
public administrator office. Things were such a mess that Thompson
urged all Brooklyn residents to 'make out a will as soon as possible' -
avoiding the risk of being bilked by the office.
Comptroller Liu 2013
PA failed to carry out its duties and failed to
comply with statutory rules and regulations by failing to implement
internal controls for critical estate administration functions which
resulted in rampant theft inside the office and indictment of a PA
bookkeeper for stealing more than $2.6 million from decedents estates
between 2008 and 2011. Lopez-Torres not only failed to supervise the PA
but also her appointed lawyers. According to the Daily News, badly
needed funds were held up for a severely disabled girl for 9 months.
Follow-up Audit Comptroller Stringer 2015
This follow-up audit assessed the implementation
status of the prior audit's 18 recommendations and determined that the
conditions disclosed in the prior audit have largely remained
unchanged. Audit identified additional findings, including PA has not
been keeping track of estate monies deposited in its bank accounts and
is unable to credit those funds back to the states to which they belong,
Margarita
Lopez Torres takes office January 2006
Surrogate
Court oversight role of Public Administrator Office.
A public administrator is a court appointed fiduciary
and the Surrogate court is vested with oversight of public administrators. NY Jud. Adv Op 14-100, citing In re Estate of
von Knapitsch, 296 AD2d 144 (1st Dept 2002). Pursuant to 22 NYCRR
100.3(c)(1) a judge must diligently discharge the judge’s administrative
responsibilities and maintain professional competence in judicial
administration.
Public administrators are appointed by and may be
removed by the Surrogate Court. Each
month, a public administrator must file with the surrogate a statement of such
of his or her accounts as have been closed or finally settled in a specified
format. SCPA 1109, 1208(2). Every six months, a public administrator must
also make a filing with the surrogate regarding certain estate accounts that
have not been fully distributed or settled.
SCPA 1109, 1208(2).
Pursuant to 22 NYCRR 207.63, each Surrogate is
mandated to request from the public administrator a year end annual report
which, with the participation of the counsel to the public administrator,
addresses the following areas: office
procedures and record keeping; case management of estates; cash management of
estate accounts and financial assets; property management; sale of real and
personal property; selection and compensation of outside vendors; and
statistical summaries of number of estates under administration, gross value of
estates under administration, statutory commissions earned by the public
administrator or counsel to the public administrator, legal fees earned by each
counsel for the public administrator and expenditures by the public
administrator on vendors, lessors and other service providers other than
counsel. Each Surrogate shall transmit
to the Chief Administrator of the Courts the annual report of the public
administrator of the courts the annual report of the public administrator and
counsel to the public administrator, together with whatever written commentary
the surrogate deems appropriate and necessary in view of his or her oversight role in connection with the operations
and performance of the office of the public administrator and counsel to the
public administrator.
I.
Audit Report, City of New York Office of the
Comptroller Bureau of Management Audit, William C. Thompson, Jr.,
Comptroller. Audit Report on the Estate
Management Practices of the Kings County Public Administrator. June 30, 2009.
“Management had
no written procedures or supervisory review system and CompuTrust, its
centralized computer record-keeping system, was neither secure not its data
reliable. Management does not maintain a
reliable record log of all estates and supporting documentation under its
administration, and therefore, does not know the total number of estates it is
responsible for.”
The audit found that KCPA failed to: “1.
Report its activities to oversight organizations as required; 2. Adequately review its financial transactions,
3. Track inventory it held for estates.
In addition, there were procurement deficiencies, including undocumented
vendor selections, missing contracts and 1099s, and inadequate documentation of
the December 5, 2007 KCPA real estate auction.”
Issues 18 Audit Recommendations. “In their response, KCPA officials agreed
with 15 of the 18 recommendations and did not address three
recommendations.” Comptroller Thompson Audit 2009
(Abe
Riesman, The Sun, June 20, 2008) Gerard A. Cabrera was
appointed jointly by Lopez Torres and Frank Seddio in May 2006. Seddio resigned in May 2007 said in interview
that he and Surrogate Lopez Torres selected Mr. Cabrera based upon the
recommendations of a non-partisan screening panel they had established. Their resignation preceded arrest of
accountant Arthur Orikher for theft.
Althur Orikher, employed
at the KCPAO, just 3 months after hire to perform accounting duties, started
depositing counterfeit checks worth $9,969 into his personal account. On April 30, stole $3,300 from a deceased client’s
safe-deposit box.
June
13, 2008 Gerard Cabrera and Natasha Godby resigned.
Barbara
Ross, Audit reveals shady shenanigans in
Brooklyn courts, Daily News, July 6,
2009 After Cabrera’s departure, Comptroller
Thompson’s audit revealed massive mismanagement of the PA office including
theft of real estate worth millions. “Things
were such a mess that Thompson urged all Brooklyn residents to make out a will
as soon as possible-avoiding the risk of being bilked by the office.” Barbara Ross, Audit reveals shady shenanigans in Brooklyn courts, Daily News,
July 6, 2009. “Brooklyn public
administrator, [newly appointed] Bruce Stein, said the problems cited in the
audit took place before he took over last summer. Stein replaced Gerard Cabrera, who left
office along with a deputy, Natasha Godby.
Stein said he is trying to adopt most of the auditors’ recommendations.”
“Brooklyn’s scandal-plagued court system gets
a new black eye in a scathing audit that found the borough’s public
administrator’s office riddled with ‘mismanagement and laziness.’” “The city controller’s office uncovered
shoddy recordkeeping, suspicious real estate deals and auctions run by a
shadowy company, [Premiere Asset Real Estate], that vanished when auditors
started asking questions.”
(Russ
Buettner, City Bookkeeper Charged with Stealing $2.6 million from estates, New
York Times, May 4, 2012).
“A bookkeeper in the
office of the Brooklyn public administrator stole more than $2.6 million from
the estates of people who died without wills over a period of three years,
prosecutors charged on Friday. The
bookkeeper, Richard Paul, wrote forged checks from seven estates, diverting
money that was supposed to be deposited in the city treasury to himself and
three co-conspirators, who were also charged.
This investigation exposed an audacious and calculated scheme to steal
money from the dead, Rose Gill Hearn, the commissioner of the DOI said in a
statement. In 2009, an audit of the
Brooklyn public administrator’s office by William C. Thompson Jr., who was the
city comptroller, found mismanagement so pervasive that Mr. Thompson urged
people to rush to create wills. The
current Brooklyn public administrator, Bruce Stein, took office after the
issues raised in the Thompson audit occurred.”
II.
Financial Audit, City of New York Office of
the Comptroller Bureau of Management Audit, John C. Liu, Comptroller. Audit Report on the Financial and Operating
Practices of the Kings County Public Administrator’s Office. June 28, 2013.
“KCPA failed to
properly carry out its fiduciary responsibilities because it did not act in the
best interests of estates, carry out its duties prudently, and comply with
statutory rules and regulations.
Specifically, KCPA did not implement internal controls for critical
estate administration functions including asset identification, collection,
safeguarding, and distribution; estate accounting including the recording,
documenting, and reporting of income and expenses transactions; bank account
administration; and estate management, monitoring and tracking.
Additionally, KCPA failed to submit to the Surrogate’s
Court, State Attorney General, State and City Comptroller’s Offices, and the
Mayor the required financial and operational reports that would allow them to
effectively assess, monitor, and hold KCPA accountable for its
performance.
On other matters, KCPA’s failure to establish proper
internal controls to monitor and safeguard estate assets may have provided the
opportunity for certain mishandling of estate activities and the recently
reported misappropriation of funds.
During the course of our audit, we became aware of an issue involving
the indictment of a KCPA bookkeeper for stealing more than $2.6 million from
decedents’ estates between August 2008 and November 2011.”
Made 18 recommendations.
“KCPA did not address the report’s findings and
recommendations or disagreed with the report’s findings, stating that the audit
did not take into account information and documentation presented to the
auditors. However, as acknowledged by
KCPA in its response, we conducted a lengthy review of KCPA processes, estate
files, and other relevant KCPA and independently obtained documentation. Throughout the audit fieldwork and reporting
process, we repeatedly requested, reviewed and considered all relevant
documentation provided to us. However,
the KCPA Public Administrator was generally non-responsive to our requests for
documentation.” Comptroller Liu Audit
(Yoav Gonen, Estates Official resigns after
office mishandles 2.2 M in assets, New York Post, September 18, 2014)
“The official who
oversees estates of people who die without wills in Brooklyn—and whose office
was cited for sloppy work by the city comptroller last year—has resigned, the
Post has learned. Kings County Public
Administrator Bruce Stein stepped down
earlier this month, in part because of questions about his ability to perform
the job, a source said. Stein’s office
was slammed by former Comptroller John Liu in 2013 for mishandling more than
$2.2 million in assets, including misplacing a fur coat and allowing $50,000 in
cash to sit unclaimed in a safe deposit box for five years. The money was claimed only after auditors
pointed it out. The auditors found
shoddy work in more than half of the 50 cases that were examined. Stein was appointed to the role in January
2009, and was earning more than $123,000.
Public Administrators are appointed by the Surrogate’s Court.” Comptroller Liu Audit
Brooklyn Public Administrator cited for job performance failure (Brooklyn Eagle, 2013)
III.
Management Audit, City of New York Office of
the Comptroller Scott M. Stringer, Comptroller.
Follow-up Audit Report on the Financial and Operating Practices of the
Kings County Public Administrator’s Office.
June 30, 2015.
“In this follow-up audit, we assessed the
implementation status of our prior audit’s 18 recommendations. Two of the recommendations were implemented,
one was partically implemented, and 14 were not implemented. We could not determine the implementation statutes
of the recommendation that formal and informal estate legal counsel fees be
paid in accordance with new Guidelines, effective May 1, 2012 because there was
not sufficient documentation in the files.
Of the conditions disclosed in the prior audit, this audit found that
many have remained unchanged. Among
other things, we found little evidence that staff consistently performed
sufficient database searches for possible estate assets; disbursements did not
have all the required supporting documentation; inventory records of estate
assets were inaccurate; bank reconciliations were not always performed;
outstanding checks were not voided; mandatory financial and operational reports
were not always submitted to appropriate oversight bodies timely, if at all;
and W-9 forms were not obtained from vendors to determine their legal entity
type and tax status.”
PA response:
“PA generally agreed
with 20 of the 22 recommendations made in this follow-up report. PA’s response did not specifically address
the recommendations that it establish procedures for competitive vendor
selection and that it conduct an investigation into an account for which over
$45,000 could not be traced.” Stringer Follow Up Audit
Ellen Moynihan, Daily News, March 15, 2019,
Ex-Brooklyn Public Administrator Employee Jailed for Swindling $78,000 from
dead, must pay it back.
“A former Kings County public administrator employee was sentenced on
Friday to 60 days in jail and five years probation and ordered to pay back more
than $78,000 he swindled from 8 estates he was supposed to manage. From July 2017 through April 2018 Fitzroy
Thompson lived high off the dead, using their checking accounts and credit
cards for a cruise ship vacation, airline tickets, ATM withdrawals, payments on two cars, and
other lavish purchases. Mr Thompson
abused his authority as a representative of the PA Office by stealing tens of
thousands of dollars from the estates of several deceased persons and lining
his own pockets, NY City DOI Commissioner Margaret Garnett Said.”
Heidi Evans, Greg Smith, Corky Siemaszko,
Lawyer who held up badly needed settlement money finally turns in report on
guardian of severely disabled Brooklyn girl.
New York Daily News, June 8, 2015.
“Brooklyn Surrogate Court appointed lawyer Maureen Fonti got moving only
after the Daily News reported that the funds to help 18-year-old Micalia
Wilkinson were tied up in red tape.
Fonti called the guardian and great-aunt of the girl just once and never
even visited her Crown Heights home to see how she was taking care of her
niece. Fonti, who was supposed to be
vetting her client and the home she has provided for Micalia, didn’t return her
calls for months. “
