Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, March 13, 1992 TAG: 9203130308
SECTION: VIRGINIA PAGE: B3 EDITION: STATE
SOURCE: Associated Press
DATELINE: NEWPORT NEWS LENGTH: Medium
Other state bars also are unprepared to cover huge losses, said David Brent, the American Bar Association's adviser on such funds nationwide.
Brent said fewer than 10 lawyers nationally have triggered claims that collectively exceeded $1 million.
Hundreds of people, meanwhile, are expected to seek anywhere from $10 million to $20 million that Murray allegedly swindled before he committed suicide Feb. 7.
Some of them have turned to the Virginia State Bar's Clients' Protection Fund. But fund officials say Murray's creditors may not get all they are seeking.
The protection fund holds only about $580,000, and just 10 percent of that - about $58,000 - can be applied toward losses generated by one lawyer's misconduct.
"The protection fund was never designed to handle a loss of that magnitude," said Stephen Pickard, an Alexandria lawyer and chairman of the board that oversees the fund. "I don't think anybody ever thought a lawyer could cause that kind of a loss."
Some lawyers familiar with the Murray case believe the losses may reach a national record. That mark is held by Steven Romer, a New York City lawyer serving 22-plus years in prison.
Romer was arrested in January 1991 in what then was heralded as the largest theft of clients' money by any lawyer in U.S. history: $15.5 million. He allegedly took money entrusted to him by about 40 clients.
By Wednesday, the Virginia fund had received 30 claims tied to Murray "and they're coming in the mail every day," said Assistant Executive Director Susan Busch.
Murray, 60, killed himself one day after the FBI searched his law offices for evidence that he was mismanaging trust accounts and running an illegal investment scheme.
Allegations have surfaced since then in civil lawsuits that Murray also defrauded clients in real estate transactions and that he failed to pay people who lent him money based upon promises they would receive interest rates of up to 24 percent.
An accountant appointed by Newport News Circuit Court to take control of Murray's holdings testified this week that he has sent out more than 400 claim forms to people who say Murray owed them money. He said he has found only $500 so far but is seeking control of other assets.
The debts left by Murray appear on the surface to be what the bar intended to cover when it established its protection fund.
Bar officials say Murray wore many hats - investment adviser, real estate developer and lawyer, among others - and the protection fund covers only dishonest conduct that arises from an attorney-client relationship.
Busch said the board already has assigned three members to start investigating the claims and hopes to make some decisions by early May.
by CNB