TRENTON, NJ — On the radio and in seminars, attorney Robert Novy
stressed the importance of having someone you can trust — a family
member, a friend or even an attorney — you can trust to watch over your
affairs if you become unable to do so yourself.
At the same time
as he was giving out that advice, the state attorney general's office
says, Novy was taking advantage of the very people he said needed a
trusted adviser.
Novy, 66, of Brick, was indicted Monday on 10
counts accusing him of stealing $1.9 million from his elderly clients,
several of whom did not have close relatives to guard their interests
and in some cases suffered from dementia, Attorney General Gurbir S.
Grewal.
Novy originally was arrested in October 2016, and authorities alleged he had taken more than $1.2 million, according to the
original report. But in the months since then, more victims have been located, and Grewal's office said the investigation is continuing.
As
an expert in elder law, Novy hosted a bimonthly radio program "Inside
the Law," which focused on topics of concern to senior citizens. He was
arrested on Oct. 18, 2016 and detectives executed a search warrant 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 more than $3.5 million in assets
held by Novy and his firm and appointed a trustee to oversee the firm's
business operations.
"Novy allegedly stole nearly $2 million from vulnerable clients,
preying on seniors who were frail and isolated and who trusted him as
their attorney to guard their life savings," Grewal said. "It is hard to
imagine a more callous personal and professional betrayal."
"We
allege that Novy systematically drained his clients' assets, laundering
funds through various bank accounts and charging unauthorized fees to
enrich himself and his firm," said Director Elie Honig of the Division
of Criminal Justice. "We urge anyone with relevant information about
Novy and his handling of client funds to contact our office."
The
indictment alleges that from 2009 through 2016, Novy stole
approximately $1.9 million from six elderly clients. The investigation
is ongoing, and the Division of Criminal Justice is looking at numerous
additional suspicious financial transactions involving funds of other
clients of Novy.
The investigation revealed that Novy allegedly
stole funds from elderly and deceased clients who often did not have a
close relative to claim their estate or challenge Novy's actions. He
allegedly used the stolen funds for his own benefit, paying 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 allegedly 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.
The indictment alleges that Novy engaged in three different schemes by which he stole funds from the six clients:
1.
In one scheme, Novy is alleged to have simply transferred funds from
his clients' personal bank accounts or from his clients' liquidated
personal assets into his own bank account. Novy allegedly stole $322,342
from four of the six victims through this criminal scheme, authorities
said.
2. In the second scheme, Novy allegedly 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. It is alleged
that Novy stole $929,026 from three of the six victims through this
criminal scheme, authorities said.
3. In the third scheme, Novy
allegedly 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 allegedly excessively billed the clients for
power of attorney fees without any supporting invoices. Novy allegedly
stole $659,457 from three of the six victims through this criminal
scheme, authorities said.
Monday's indictment included two counts
of second-degree theft by unlawful taking; three counts of second-degee
misapplication of entrusted property; one count of second-degree theft
by deception; two counts of first -degree money laundering and two
counts of second-degee money laundering, Grewal's office said.
The
money laundering counts allege that Novy engaged in transactions
involving the stolen funds and the various accounts – primarily his
attorney trust accounts and/or attorney business accounts – through
which he concealed the source of the stolen funds and used them to
promote his criminal activities.
Novy allegedly stole $1.9 million from the following six victims – all residents of Ocean County – and/or their estates:
1. Brick Township woman who died in 2015 at age 88. Alleged theft: approximately $738,457.
2. Manchester Township woman who suffered from dementia and died in 2014 at age 87. Alleged theft: approximately $650,700.
3. Brick Township woman who suffered from Alzheimer's disease and died in 2013 at age 85. Alleged theft: approximately $242,305.
4. Manchester Township woman who currently is 98. Alleged theft: approximately $130,000.
5. Point Pleasant woman who suffered from dementia and died in 2015 at age 87. Alleged theft: approximately $103,843.
6. Waretown woman who died in 2013 at age 85 (and her husband who died in 2011 at age 92). Alleged theft: approximately $45,520.
The
Division of Criminal Justice Financial & Computer Crimes Bureau,
assisted by the New Jersey Division of Taxation Office of Criminal
Investigation is investigating the case, which was referred to the state
by Ocean County Surrogate Jeffrey W. Moran.
Novy also was
investigated by the New Jersey Office of Attorney Ethics, which issued
an ethics complaint against him on Jan. 26, 2016, and assisted the
Division of Criminal Justice, Grewal's office said.
Deputy
Attorneys General Peter Gallagher and William Conlow presented the case
to the state grand jury for the Division of Criminal Justice Financial
& Computer Crimes Bureau, under the supervision of Deputy Bureau
Chief Mark Kurzawa and Deputy Division Director Christine Hoffman. The
case was investigated by Detective Michael Arduini, Detective Michael
Woods, Lt. Anne Hayes, Investigator Jordan Thompson, Investigator Wayne
Cummings and Analyst Terri Drumm. Deputy Attorney General Derek Miller
and Investigator Debra Maiorano are handling the state's forfeiture
action.
Attorney General Grewal thanked the Ocean County
Surrogate, the New Jersey Office of Attorney Ethics and the Division of
Taxation Office of Criminal Investigation for their valuable assistance
in the investigation. Special Agents Mike Mullane and Will Makar
investigated for the Division of Taxation Office of Criminal
Investigation.
First-degree money laundering carries a sentence
of 10 to 20 years in prison, along with a fine of up to $200,000 and an
anti-money laundering profiteering penalty of up to $500,000.
Second-degree charges carry a sentence of five to 10 years in prison and
a fine of up to $150,000. The second-degree money laundering charge
carries an additional anti-money laundering profiteering penalty of up
to $250,000.
The indictment was handed up to Superior Court Judge
Mary C. Jacobson in Mercer County, who assigned the case to Ocean
County, where Novy will be ordered to appear in court at a later date
for arraignment.
Authorities urged anyone with information
about alleged misappropriation of client funds or other suspicious
transactions involving Novy to contact the Division of Criminal
Justice's toll-free tipline 1-866-TIPS-4CJ to report the information
confidentially.
Full Article & Source:
Attorney Who Preached Elder Law Stole $1.9M From Elderly: AG
