A top Bronx judge let political cronies reap lucrative fees from dozens of improperly invested inheritances - leaving taxpayers on the hook for $20 million.
The mishandling of the money - overseen by Surrogate Judge Lee Holzman and managed by two aides - let politically wired lawyers and accountants rake in $2.1 million in fees, while heirs of the 37 victimized estates couldn't get their money.
Bronx judge oversaw city's bad investments of inheritance cash
Public administrators manage the assets of residents who die without wills until the court approves a settlement. They are supposed to invest estate money in conservative financial instruments such as treasury bills.
Judge Holzman appointed Rodriguez and Raniolo to the job and was responsible for monitoring all of the estates. He signed off on all fees and was supposed to make sure the cases moved swiftly through the courts.
The problem surfaced in April, when city Controller William Thompson discovered the Bronx public administrator had put millions into auction-rate securities, risky investments that were no longer selling.
Thompson determined the city would have to pay the heirs and wait until it could the sell the now-worthless securities. So far the city has had to pay out $900,000 and hopes to be paid back for everything when the securities become liquid again.
More infuriating for family members is that while they couldn't get their money, lawyers, accountants and the brokerage that managed the investments could.
Topping the insiders list was Michael Lippman, counsel to public administrator Raniolo, who has collected $1.9 million in fees from the 37 estates.