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Post date: March 10 2016

A.G. Schneiderman Announces Felony Convictions Of Attorney And Caregiver For Stealing Hundreds Of Thousands Of Dollars From Estates Of Wealthy Brother And Sister

Estate Planning Attorney Stephen M. Newman Pleads Guilty To Grand Larceny, Caregiver Joan Morgante Pleads Guilty To Attempted Grand Larceny, For Diverting Over $900K From Trust Accounts Between 2008 And 2011

Newman Forfeits $800,000 And Surrenders Licenses To Practice Law In New York And Florida

NEW YORK – Attorney General Eric T. Schneiderman announced today the felony convictions of estate planning attorney Stephen M. Newman and caregiver Joan M. Morgante, for stealing over $900,000 from the estates of wealthy brother and sister June and Worth Farrington.  Newman, 71, of Palm Beach Gardens, FL, pleaded guilty today in New York County Supreme Court to Grand Larceny in the Second Degree, a Class C felony.  Morgante, 76, of Cheektowaga, NY, pleaded guilty today in Erie County Supreme Court to Attempted Grand Larceny in the Second Degree, a Class D felony.   As part of his plea, Newman agreed to forfeit $800,000 and to surrender his licenses to practice law in New York and Florida.    

“We have an important obligation to protect the elderly and those who are most vulnerable in our society,” said Attorney General Eric Schneiderman. “When individuals abuse the trust of elderly New Yorkers, they will face prosecution and they will be held accountable.”

Today's convictions are the result of a long-term investigation conducted by the Attorney General’s Criminal Enforcement and Financial Crimes Bureau (“CEFC”).    June and Worth Farrington were siblings, unmarried and with no children, and were lifetime residents of the Town of Orchard Park, in Buffalo, New York.  In 2008, the Farringtons had combined assets of over $20 million.  June Farrington died in 2008 at the age of 84; her brother Worth Farrington died in 2014 at the age of 87.

CEFC’s criminal investigation began in 2013, after a prior investigation by Buffalo Regional Office Assistant Attorney General Bill Maldovan resulted in a decision by the Erie County Surrogate’s Court to remove Newman as executor and trustee for the Farringtons.  Over the course of the criminal investigation, CEFC reviewed thousands of pages of court records, bank records and medical records related to June Farrington and Worth Farrington.  

According to felony complaints filed in Erie and New York Counties, the Attorney General’s investigation revealed that in 2007, Newman was retained by June and Worth Farrington as an estate planning attorney.  In 1999, Newman had previously prepared separate Living Trusts for Jun! e and Worth Farrington.  The original 1999 Living Trusts provided that the sole trustee of each trust was Bank of America and gave June and Worth Farrington a life interest in the assets in the trust, with the trust assets to be given outright to designated charities, including the Salvation Army, City Mission, Nature Conservancy, and Women and Children’s Hospital Foundation, amongst others, upon their deaths. 

In October 2006, Newman introduced Joan Morgante to Bank of America and recommended her to be the caretaker for June and Worth Farrington.  According to an affidavit signed by Morgante and filed in Surrogate’s Court, Morgante is a high school drop-out and self-described geriatric “companion,” with no health care certifications or training, and Morgante met Newman while caring for another client of Newman’s in or around 2006. 

Thereafter, between 2007 and 2009, Newman made a series of restatements to June and Worth Farrington’s Living Trusts. Through these restatements, Newman changed the outright gifts to charities into annuities and made himself the sole trustee June and Worth Farrington’s trust accounts. 

After being appointed sole trustee, between November 2008 and November 2011, Newman diverted over $900,000 in monies from the Farringtons’ trust accounts to himself.   Additionally, Newman diverted over $400,000 to Morgante, including the purchase of a $325,000 townhouse.  

In November 2011, the Erie County Surrogate’s Court removed Newman as executor for the estates of June and Worth Farrington, and also removed him as trustee for their various trusts.   As a result of a negotiated settlement in May 2012, the Surrogate’s Court invalidated all but June Farrington’s original will and Living Trust, and ordered payment to the charities who were the original beneficiaries of June and Worth’s trusts and estates of approximately $1.6 million, approximately $400,000 of which was paid by Newman.

Last month, defendant Newman admitted to an Attorney General investigator that while acting as attorney for June and Worth Farrington, he stole over $100,000, and that he transferred the stolen monies to an investment account in New York City in an effort to conceal and disguise his theft. 

Today, Newman entered a guilty plea before the Hon. Michael J. Obus in New York County Supreme Court to one count of Grand Larceny in the Second Degree, a Class C felony.  As part of his plea, Newman agreed to forfeit $800,000. Newman will also surrender his licenses to practice law in New York and Florida.  He is scheduled to be sentenced to four years probation on May 12, 2016.

 

Morgante also pleaded guilty today, before the Hon. John L. Michalski in Erie County Supreme Court, to one count of Attempted Grand Larceny in the Second Degree, a Class D felony.  Morgante is scheduled to be sentenced to five years probation on June 15, 2016.

  The Attorney General thanked the New York State Police, Special Investigations Unit, under the command of Major Scott P. Coburn, and the New York State Department of Taxation and Finance, Criminal Investigations Division, for their assistance in this matter.  

 

This case is being prosecuted by Assistant Attorney General Diane LaVallee of the Criminal Enforcement and Financial Crimes Bureau.  The Criminal Enforcement and Financial Crimes Bureau is led by Bureau Chief Gary T. Fishman and Deputy Bureau Chief Stephanie Swenton.  The Division of Criminal Justice is led by Executive Deputy Attorney General Kelly Donovan.

The Attorney General's investigation was conducted by Senior Investigator Sandra Migaj and Investigator Kenneth Peters, led by Supervising Investigator Richard Doyle and Deputy Bureau Chief Antoine Karam.   The Investigations Bureau is led by Chief Dominick Zarrella.  

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