It Appears Attorney John Schwarz Is Violating A Plethora Of NY State Bar Rules
“White collar criminals build a wall of false integrity around them to gain the trust of their victims.” -Sam E. Antar
Since I started MFI-Miami during the infancy of the financial crisis almost 6 years ago, I have either had to deal with or interview hundreds of attorneys who “claim” to be foreclosure defense attorneys across the U.S. All I can say is there is a reason why I only have eight attorneys on my website. There is a plethora of reasons why most of them don’t make the cut for the website and the reasons range from them being incompetent about mortgage lending, having been severely disciplined by their respective bar associations or they are just crazy. When I say crazy I mean psychotic crazy not “drive mortgage servicers crazy until they give a homeowner a modification” crazy like me.
Earlier this year, I started getting disturbing phone calls and emails from homeowners in the Hudson Valley section of New York about Foreclosure Defense Attorney John M. Schwarz hurling laptops across his office, making fun of kids dying of Leukemia and hiring a convicted scam artist to go door to door soliciting business from terrified homeowners. It’s a wonder Schwarz doesn’t have his own reality show on TLC called “Insane Clown Lawyer” because watching Schwarz drive his legal career into the 7th layer of hell, is kind of like watching “Mama June” of “Here Comes Honey Boo-Boo” fame pole dance. We all know its going to end horribly bad but we can’t take our eyes off of it as it plays out.
Schwarz contracted a guy a named Pasquale Grillo aka Pat Grillo who had been convicted of Grand Larceny in the 3rd Degree after taking over $35,000 from homeowners in New York for home improvement projects that he had no intention of doing.
Schwarz contracted Grillo to go door to door hanging door hangers on the homes being sued for foreclosure across the Hudson Valley and solicit their business. Generally this would not be a big deal but as you can see, the door hanger gives the impression its from the homeowner’s lender and the lender came for a personal visit to either speak to homeowner or inspect the property.
Terrified homeowners thinking their lender sent hired goons to their home would frantically call the number on the door hanger only to get Grillo answering the phone (The number on the door hanger is his cell phone number). Grillo would then give the homeowner a Glengarry Glen Ross style hard sell sales pitch promising a mortgage free homes if they hired Schwarz.
Unfortunately, for Schwarz, utilizing Grillo’s sales tactics to enhance his legal practice appears to be a violation of multiple sections of Rule 7.1 of the Rules Of Professional Conduct of the New York State Unified Court System:
(a) A lawyer or law firm shall not use or disseminate or participate in the use or dissemination of any advertisement that:
(1) contains statements or claims that are false, deceptive or misleading
(f) Every advertisement other than those appearing in a radio, television or billboard advertisement, in a directory, newspaper, magazine or other periodical (and any web sites related thereto), or made in person pursuant to Rule 7.3(a)(1), shall be labeled “Attorney Advertising” on the first page, or on the home page in the case of a web site. If the communication is in the form of a self-mailing brochure or postcard, the words “Attorney Advertising” shall appear therein. In the case of electronic mail, the subject line shall contain the notation “ATTORNEY ADVERTISING.”
(h) All advertisements shall include the name, principal law office address and telephone number of the lawyer or law firm whose services are being offered.
Grillo’s hard sell is not the most disturbing part of Grillo and Schwarz’s shenanigans. Grillo is knocking on doors all day and doing whatever it takes to sign up homeowners because Schwarz is allegedly paying Grillo a portion of any retainer fee Grillo collects for Schwarz. If Grillo is get paid by Schwarz it would be a violation of New York State Bar Rule 7.2 which bars referral fees:
(a) A lawyer shall not compensate or give anything of value to a person or organization to recommend or obtain employment by a client, or as a reward for having made a recommendation resulting in employment by a client.
It also appears Schwarz and Grillo are also violating Rule 7.3 by not putting Schwarz’s name, principal law office address and telephone number on their deceptive door hanger:
(h) Any solicitation covered by this section shall include the name, principal law office address and telephone number of the lawyer or law firm whose services are being offered.
While Schwarz and Grillo are focused on driving Schwarz’s legal career over a cliff as if they were doing an all-male cabaret version of Thelma and Louise, many of Schwarz’s foreclosure clients who have signed retainer agreements through Grillo over the past year have yet to actually talk or even meet with Schwarz.
This could be considered a violation of DR 7-101 of the New York Lawyer’s Code of Professional Responsibility:
A(2). Fail to carry out a contract of employment entered into with a client for professional services,
Schwarz’s business connections with Grillo may be the least of Schwarz’s ethics problems. According to the Rockland County Court Clerk, Schwarz has been named in a lawsuit by several former contractors alleging that Schwarz sent them fraudulent 1099 tax forms for large six figure cash payments for work they claim Schwarz never hired them for.
Homeowners in the Hudson Valley also need to be aware that in a desperate gambit to get cash into his pocket and make it appear his firm has a bigger client base than in it actually does so he can sell his practice at a higher price, Schwarz has Grillo going door to door offering Schwarz’s foreclosure defense services for as little as $300.
Homeowners need to be wary of Grillo or Schwarz promising such low fees because as the old saying says, if it sounds too good to be true, it probably is.
Feel free to ask Grillo about his conviction for Grand Larceny when you get one of his door hangers and feel free to ask John Schwarz how much longer he plans on practicing law. If you’re lucky you may see one of Schwarz’s legendary and highly entertaining conniption fits, just make sure you are close to an exit if you meet with him in person.