Attorney Who Bilked $3M From Senior Clients Gets 10 Years In Jail

TOMS RIVER, NJ — An Ocean County attorney who hosted a radio show and taught seminars on elder law, often preaching the need to protect those who are vulnerable, has been sentenced to 10 years in prison for stealing more than $3 million from his elderly clients, the state attorney general's office announced Friday.

Robert Novy, 67, of Brick, was sentenced Friday to 10 years in state prison, including three years and four months of parole ineligibility, by Superior Court Judge Michael T. Collins in Ocean County, Attorney General Gurbir S. Grewal said.

Novy pleaded guilty on July 27 to first-degree money laundering, admitting he stole millions of dollars from his law firm's clients. The state's investigation revealed that he stole more than $3 million from at least two dozen victims. Novy laundered the money through various bank accounts, including his attorney trust and business accounts. The victims generally did not have close relatives to guard their interests and in some cases suffered from dementia, Grewal's office said.

Novy additionally must pay restitution to his victims out of two funds totaling $4 million that are being created using assets previously seized from him by the state: one fund of $3 million to provide restitution to client victims, heirs, estates and trusts already identified through the state's investigation, and a second fund of $1 million to provide restitution, with court approval, for others not previously identified who come forward with proof that they were victims of thefts.

Novy surrendered his license to practice law in New Jersey and must pay $500,000 to the state as an anti-money laundering profiteering penalty.

As an expert in elder law, Novy hosted a bi-monthly radio program "Inside the Law," focusing on topics of concern to senior citizens. He was arrested on Oct. 18, 2016. Detectives executed a search warrant at the time at his firm, Novy & Associates, on Ridgeway Avenue in Manchester, seizing billing records and other evidence. The Attorney General's Office obtained court orders freezing over $4 million in assets held by Novy and his firm and appointing a trustee to oversee the firm's business operations.

"Novy preyed upon vulnerable seniors who trusted him as their attorney to guard their interests. Instead, he callously stole their life savings, betraying their trust and the oath he took to uphold the law," Grewal said.

Novy came under investigation following a referral to the Division of Criminal Justice by Ocean County Surrogate Jeffrey W. Moran.

The investigation revealed he stole funds from elderly and deceased clients who often did not have a close relative to claim their estate or challenge Novy's actions and used the money for personal and business expenses.

Novy gained control through wills, powers of attorney, and trust documents, making himself the sole financial decision-maker for the clients. When clients had sizeable assets in the form of an annuity or life insurance policy, Novy directed insurance companies to redeem the policies and send the money directly to him. In some cases, when challenged by trustees or relatives about particular funds that had been withdrawn from client accounts, Novy claimed they were "administrative errors" and repaid the funds.

Novy was indicted April 30, 2018, with the state alleging three different schemes:

1. In one scheme, Novy simply transferred funds from his clients' personal bank accounts or from his clients' liquidated personal assets into his own bank account.

2. In the second scheme, Novy transferred funds from his clients' personal accounts or liquidated assets into IOLTA (Interest on Lawyer Trust Account) sub-accounts that he controlled. The powers of attorney executed by the victims legally required Novy to place their assets into independent trust funds selected by the victims that would manage their assets, so the act of placing the funds into accounts that he controlled constituted a theft by Novy.

3. In the third scheme, Novy transferred client funds from various accounts – including the clients' personal accounts, the clients' IOLTA sub-accounts, or the firm's attorney trust account – into the firm's operating and disbursement accounts. Novy excessively billed the clients for power of attorney fees without any supporting invoices.

Novy was charged with money laundering because he engaged in transactions involving the stolen funds and the various accounts – primarily his attorney trust accounts and/or attorney business accounts – by which he concealed the source of the stolen funds and used them to promote his criminal activities.

The state attorney general's office said people, relatives, heirs, estates or trusts who believe they are victims of Novy and can offer proof of damages should write to Deputy Attorney General Kara R. Webster in the State Office of Victim Witness Advocacy at WebsterK@njdcj.org, or if they do not have email access, can call 609-376-2444.

Full Article & Source:
Attorney Who Bilked $3M From Senior Clients Gets 10 Years In Jail