TRENTON –
A Belleville attorney has been disbarred by order of the N.J. Supreme Court.
On May 2, the court accepted a recommendation by the Disciplinary Review Board (DRB) to lift the license to practice law from Frank J. Cozzarelli “for the knowing misappropriation of client and escrow funds.”
Cozzarelli has practiced law from a Joralemon St. law office after graduating cum laude from Seton Hall University Law School in 1977. He received his undergraduate degree from Rutgers University in 1974.
Recently, Cozzarelli appeared before the Belleville Planning Board in a successful site plan application proposing development of a new retail pharmacy on Washington Ave.
Cozzarelli, who was represented before the state’s highest tribunal by Livingston attorney Chris Franzblau, argued that he “presented mental illness evidence that had not received proper consideration by the DRB,” as noted by the court.
He contended that evidence should be “considered in connection with mitigation of penalty as well as for purposes of providing a defense to the charged misconduct,” the court wrote.
Nonetheless, after reviewing the case, the court concluded that, “there is clear and convincing evidence of knowing misappropriation of client funds, that [Cozzarelli’s] … depression did not cause him to suffer a loss of competency, comprehension or will that excused the acts of misappropriation when they occurred, and that he is not entitled to mitigation of our almost-invariable penalty of disbarment for such egregious misconduct based on the depression he undoubtedly suffered in connection with his federal investigation, indictment, plea, and sentence.”
In its review of the case, the court reviewed the background to the events leading up its disciplining the attorney:
Problems began for Cozzarelli with his indictment Sept. 21, 2004, on income tax evasion charges in connection with his role as treasurer of a fraudulent investment fund. The court felt that Cozzarelli was used “as a fall guy” in the scheme to transfer monies to persons designated by an Edward Mallet.
Between Sept. 21 and 26, 2004, the court said that Cozzarelli “formulated a suicide plan and absented himself from family and friends to execute it, traveling in and around New Jersey, stopping in New York City, Atlantic City and Philadelphia” before abandoning that plan, reconnecting with family and an attorney to face his criminal charges.
On Sept. 26, 2004, he was voluntarily admitted to an inpatient psychiatric unit in Valley Hospital and discharged Oct. 4. He pleaded guilty in January 2005 to income tax evasion and was sentenced to four months in jail, followed by four months of house arrest and probation.
In February 2005, Cozzarelli was temporarily suspended as a result of his guilty plea in federal court.
Meanwhile, an auditor for the Office of Attorney Ethics reported finding “a systematic and continuing invasion of client trust funds for [Cozzarelli’s] law office and personal expenditures [which] revealed shortages in his accounts” and “that money from the fiduciary accounts went into the Trust Account and were used to pay other clients.”
At the audit’s conclusion on Dec. 18, 2008, the court noted that Cozzarelli was charged with “misappropriation of $112,728 in client funds for personal purposes, improper transfer of funds from one client’s trust account to the account of another unrelated client and repeated occurrences of borrowing against trust accounts for personal purposes, including for fees he believed he was owed and to replenish other trust accounts.”
At his disciplinary hearing, Cozzarelli argued, “that because he suffered from the debilitating mental illness of severe depression, he should be absolved of improprieties or at the least granted mitigation in terms of the quantum of discipline to be imposed ….”
Medical experts for the defense and the state disagreed on whether Cozzarelli’s mental state interfered with his competency in managing the trust funds at the time of the audit.
The DRB determined that Cozzarelli’s diagnosis of major depression “did not satisfy the requisite standard for legal insanity to obtain relief …. [and] that despite his depression, [Cozzarelli] continued to function personally and professionally and that, during that time, he systematically engaged in … taking one client’s funds to pay obligations owed to another, while ensuring that the funds were replenished when it came time to repay the first client. Consequently, the DRB determined that [Cozzarelli] should be disbarred.”
Despite the attorney’s assertion “that his conduct was an aberration and that he has since reformed,” the court noted that as late as September 2008, he gave the OAE a ledger that “falsely showed that the $50,000 [Cozzarelli] had paid to his lawyer in the federal criminal matter had gone to a beneficiary of the trust instead. Thus, nearly four years after [his] so-called breakdown, three years after his release from incarceration for having committed a felony … [Cozzarelli] was still engaging in dishonest conduct designed to conceal the fact that he deliberately and intentionally took monies that did not belong to him and used them to fund his defense in the federal criminal matter.”
The court found that “the medical proofs did not demonstrate that the condition from which [Cozzarelli] suffered was an exclusive or major cause of his ethical derelictions” nor did his medical report “furnish any basis grounded in any firmly established medical facts for a legal excuse or justification for [his] misappropriations. There has been no demonstration by competent medical proofs that [Cozzarelli] suffered a loss of competency, comprehension or will of a magnitude that could excuse egregious misconduct that was clearly knowing, volitional and purposeful.”
– Ron Leir
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