Bankruptcy Attorney Suspended for Overcharging Clients
A bankruptcy attorney was suspended for taking advantage of his clients by over charging legal fees and embezzling funds.
The biggest bankruptcy attorney in Pennsylvania is now being accused of overcharging hundreds of his clients and misspending thousands of dollars. One victim, Sharon Kaluzny, had to file a Chapter 13 bankruptcy after a tough divorce and caring for sick parents forced her to close down her hair salon in 2006. Ms. Kaluzny paid Mr. Mazzei a $1,000 up front when they met at his Tarentum office in Pennsylvania. The bankruptcy court later did an investigation where Mr. Mazzei failed to fully disclose all of his fees to the court as required by law.
In 2011, when Kaluzny though she was almost done paying off all of her debts she finds out that this was not the case. Kaluzny blames the miscalculation on Mr. Mazzei, which he denied, and then he forces her to do a second bankruptcy where she’d have to pay thousands of dollars more in legal fees that ultimately caused her to have her truck repossessed. The investigation conducted by the bankruptcy court found that the fees paid by Sharon Kaluzny were “in excess of the amounts stated in both cases.”
During the second bankruptcy, Kaluzny was forced to give up a rental property. The tenant however, was still paying Mazzie $900 in rent which was kept in the firms account. According to the investigation carried out by the bankruptcy court, this act is defined as “comingling of funds”. A law professor from the University of Pittsburgh who is an expert on legal ethics stated that one of the most serious offenses for a lawyer is the comingling of funds.
Ms. Kaluzny was not the only victim taken advantage of by Mr. Mazzei. The bankruptcy court’s chief judge cited 260 cases where Mazzei charged “fees totaling over $260,000 yet he failed to perform the services he represented to clients he would perform”. He was also charged with “wrongfully retaining money”, “abusing the system”, and “filing false statements”. The states Supreme Court disciplinary board also did their own separate investigation and found Mazzei mishandled thousands of dollars he received from clients and he embezzled thousands from a credit counseling service in retainer fees.
Mazzei received a 3 year suspension of his law license.
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