Clients reimbursed $7.6M for lawyers’ wrongdoing in NY

New York state’s organization tasked with helping legal clients victimized by unscrupulous lawyers paid out 96 awards last year, totaling $7.6 million.

In 2025, 293 claims were filed with the Lawyers’ Fund for Client Protection, according to the organization’s annual 2025 report.

That is a 17 percent decrease compared to 2024, when the fund received 355 claims.

The 293 claims in 2025 alleged $70.4 million is losses, a 28% increase from the $54.7 million in alleged losses the previous year.

There were 93 pending claims at the end of 2025, the same number as at the end of 2024. The 93 pending claims allege a total loss of $53.1 million.

The Lawyers’ Fund is a special trust created by the New York State Legislature and administered by a seven-member board of trustees appointed by the judges of the state Court of Appeals.

The fund, which is financed by lawyers in New York state, reimburses clients who suffer financial losses caused by the dishonest conduct of their attorneys.

The fund does not have jurisdiction over claims alleging neglect or malpractice, or in disputes over legal fees.

The principal source of revenue for the fund is a $30 per year contribution from the attorney registration fee paid by more than 360,000 lawyers in New York state. The fund does not receive any taxpayer money.

The fund also receives revenue from attorney restitution payments, judicial sanctions, and donations.

The fund recently announced that the coverage provided has increased from $400,000 per client loss to $450,000, the maximum award since 2015.

Since the fund was created in 1982, trustees have approved 9,588 awards totaling $277.4 million.

Since 1982, nearly 41% of all money reimbursed by the fund ($112 million) has involved realty escrow losses.

In 2025, real property escrow thefts were responsible for the largest amount of reimbursement by the fund. Of the $7.6 million awarded in 2025, $5.6 million (72.9%) reimbursed realty losses, according to the report.

In 2025, the 96 awards were attributable to dishonest conduct by 21 now suspended, disbarred, or now deceased lawyers. Of those 21 former lawyers, 11 were the subject of awards in previous years.

“Apparent causes of misconduct are often alcohol or drug abuse and gambling. Other causes are economic pressures, mental illness and marital, professional and medical problems,” according to the annual report.

In addition to the theft of real estate escrow funds, examples of client losses covered by the fund include estate or trust assets, litigation settlement proceeds, money embezzled from law clients in investment transactions, and unearned legal fees accepted by a lawyer who falsely promised to provide legal services.

In 2025, New York City lawyer Salvatore E. Strazzulo was responsible for 16 awards totaling about $4 million, the largest payout for a single lawyer.

Strazzulo, nicknamed “the Nightlife Lawyer” because he often represented celebrities who got in trouble with the law while out on the town, was disbarred in July 2024, and took his own life about a month later.

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