Tuesday, August 3, 2021

Attorney Joseph George Costello Resigns After Practicing Law For 60 Years


Brooklyn Lawyer Who Practiced Nearly 62 Years Disbarred After Appeals Panel Accepts Resignation; Lawyer Said He Couldn't Defend Against Escrow Account Allegations

Law.com., Jason Grant, August 2, 2021

An Appellate Division, Second Department panel wrote that the professional misconduct investigation arose from a client’s complaint, and that allegations included veteran lawyer Joseph George Costello’s alleged failure to safeguard funds as a fiduciary held on behalf of an estate, including an approximate shortfall of at least $170,000 that happened in the account.

A state appeals court has accepted the resignation of a Brooklyn-based attorney who practiced law for more than 60 years, after he admitted that he can’t defend against allegations he failed to safeguard funds held in an escrow account on behalf of an estate and that he disbursed at least one check from the account after he’d already been suspended for a year because of professional misconduct in the matter.

The lawyer, Joseph George Costello, was admitted to the New York state bar in 1959 and, according to an earlier 2019 disciplinary decision, practiced law in more recent years with his son at the Brooklyn firm of Costello & Costello. Legal website listings say his practice included business law, real estate law, landlord and tenant law and surrogate’s court practice, among other specialties. One site, Lawyers.com, listed him as also having worked in private practice serving Howell, New Jersey.

In an opinion from a per curiam panel of the Appellate Division, Second Department that accepted the resignation of the elder Costello, and disbarred him immediately, the justices wrote that Costello had acknowledged he was under investigation by the state attorney grievance committee for the Second, Eleventh, and Thirteenth Judicial Districts, covering Brooklyn, Queens and Staten Island.

The panel further explained that the investigation arose from a client’s complaint, and that there were allegations of attorney neglect and Costello’s failure to safeguard funds he’d held on behalf of an estate, including an approximate shortfall of at least $170,000 that happened in the account.

Moreover, the allegations said Costello disbursed at least one check from the account in his capacity as an attorney after he’d been suspended from practicing law for one year by the Second Department in 2019 for what appear to have been related allegations, according to the justices disbarment opinion issued July 28 and the 2019 suspension opinion.

In a June 2019 opinion from a Second Department, the Costello & Costello firm was retained in 2011 to represent a party in a real estate closing. After the closing, wrote the panel, $680,388 was deposited into the escrow account on behalf of that client. The Costello firm  later issued the client three escrow checks for $250,000, $200,000 and $1,638.70.  Two of the checks cleared when presented to a bank by the client, but when the $200,000 check was presented months later in June 2012 for payment, the escrow account balance was $106,878.23.

The elder Costello explained in testimony, wrote the 2019 Second Department panel, that after the firm issued the $200,000 check, the firm was under the mistaken belief the check had cleared, and that he had used funds in the account to pay the firm’s bills. Because of overdraft protection, the $200,000 check did clear but the 2019 Second Department panel of justices, in deciding to suspend Costello’s law license for one year, wrote in part that “although the respondent [elder Costello] restored those funds to the escrow account once his son alerted the respondent to the shortage, notably, he has not explained, nor made any serious effort to determine, the cause for the substantial shortage.”

In the disbarment opinion issued last week, that Second Department panel wrote that Costello has provided proof that he paid back a $170,000 shortfall in the estate account. Still, the panel also said Costello acknowledges that his resignation is “submitted subject to any future application by the Grievance Committee for an order directing he make restitution or reimburse the Lawyers’ Fund for Client Protection.”

Mark Longo, a partner at Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone in Brooklyn was listed in the July 28 opinion as representing Costello in the professional discipline matter. Longo didn’t return a call Monday seeking comment.

An effort to reach the elder Costello for comment was not successful.

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