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Stealing Home?

Sold to the only bidder: Elsie Perry's Crown Heights residence
photo: Keith Bedford

For years, Brooklyn Supreme Court Judge Leonard Scholnick handled virtually every case in the borough involving elderly and incompetent wards who had no one else but the judicial system to look out for them.

A steady stream of sad cases poured past his bench. It was up to Scholnick, a veteran jurist of 28 years, to dole out guardianship appointments to lawyers, approve of how they handled the financial affairs of their wards, and generally oversee the well-being of those who could not fend for themselves.

Few outside Scholnick's courtroom ever paid close attention to what went on inside.

Now a chief clerk in the Brooklyn guardianship court, a 32-year veteran, is stepping forward to question a real estate deal involving Scholnick's longtime court clerk. Under the hush-hush arrangement, Scholnick's clerk nabbed an elderly ward's Crown Heights brownstone for well below market value—with the blessing of the judge, who retired this year.

The sale—which was also approved by the Office of Court Administration—further calls into question the clubby atmosphere rampant in the Brooklyn judiciary, where Supreme Court Judge Victor Barron stands accused of demanding a $115,000 bribe to sign off on an auto-accident settlement involving a brain-damaged infant.

The Scholnick case centers on 85-year-old Elsie Perry, a retired AT&T secretary who was suffering from early dementia. Her guardian, a lawyer who later served as head of the Brooklyn Bar Association, applied in August 1997 to Judge Scholnick for permission to sell Perry's two-family home, arguing that cash from the sale was needed to keep Perry from becoming destitute. Perry, though, collected $731 a month from Social Security and another $400 from her AT&T pension. She was lucid enough to "vehemently" object to the sale at first, court documents show. And she later appeared on her own behalf in court.

"It is her position that she worked hard to maintain her house over the years and it is hers," Lynn Terrelonge, Perry's guardian, dutifully told Scholnick. "However . . . we have no money to attend to the expenses of this house."

Without ever advertising the property, as required by law, Scholnick signed orders OK'ing the sale of Perry's home to his courtroom clerk, Roderick Randall, who worked for Scholnick for 10 years and is still employed by the court system in Brooklyn.

Facing no competition, Randall snatched up the brownstone—an 11-room home with two baths—for $120,000, some $5000 less than the market value set by an independent appraiser. Under the terms of the sale, Randall was required to let Perry stay in her home as a tenant, charging her $700 a month in rent. She remained there until her death two years ago.

By other accounts, the clerk saved a bundle. A year before the November 1997 sale, the market value of Perry's home was listed at $157,000—or $37,000 more than what Randall paid. This estimate was filed in a required annual accounting of Perry's assets, records show. Located at 1039 Sterling Place, a well-kept block in a middle-class black area, the three-story house could now fetch between $300,000 and $350,000, local realtors say.

In addition, in a move that would make Donald Trump proud, Randall bought the property using only $3600 of his own money—a mere 3 percent down payment.

The transaction—which occurred when real estate values in the city were generally on the upswing—drew the attention of at least one ranking court official, who questioned its propriety in writing. "If I did this, I would expect to be fired," George Crowley, the chief clerk of Brooklyn's guardianship court, told the Voice. "The whole thing was unethical. He [Randall] shouldn't have been a bidder. The judge shouldn't have allowed it, and the guardian shouldn't have gone along with it."

Crowley, who has feuded with Randall over a promotion he believes Randall didn't deserve, said that when he found out Scholnick had signed the order, he complained about it to his supervisor, Thomas Kilfoyle, chief clerk of the Supreme Court Civil Term. He also refused to process some of the paperwork, which he said brought an angry rebuke from Scholnick.

Scholnick was a powerful figure in the Brooklyn courthouse. A former city councilman, Scholnick hailed from the famed Seneca Democratic Club and served as the presiding justice of the Appellate Term for the second and 11th judicial districts.

"Scholnick went to my superior and demanded that I be fired," Crowley said. "I told him, 'You brought shame and dishonor to this department.' "

Scholnick could not be reached for comment, even though repeated messages were left for him with the spokesman for the Office of Court Administration.

Crowley felt strongly enough about the impropriety of the real estate deal that he placed a note in Perry's Brooklyn Surrogate court file, a highly unusual move for someone in his position. "Is it appropriate that a Court Clerk purchased the property?" Crowley wrote.

 

After the judge approved the sale, Crowley alleges, Randall boasted about the deal to his colleagues. "He made an announcement that the judge was getting him a house. He made that statement to me," said Crowley.

In a lengthy Voice interview, Randall denied saying any such thing. Though he acknowledged that he learned Perry's home was for sale from reading documents in her file, he defended the purchase. Randall said he is "95 percent sure" he asked the chief clerk, Kilfoyle, if he could pursue purchasing the house and was told he could as long as it was done "in open court." He hired a lawyer and made a bid.

"Why should I have any less rights than anyone else to buy the house just 'cause I work in the courts?" said Randall, who acknowledged the sale might "look funny," but said it was "on the up and up."

Kilfoyle, however, said he couldn't remember if Randall came to him seeking permission. He said he did recall Crowley's complaints, which he said he reported to Judge Michael Pesce, the chief administrative judge in Brooklyn at the time. "My initial reaction was to report it to my superior," Kilfoyle said.

"What I did was not wrong," Randall said. "In terms of appearance, on face value, I could understand where you'd have some concern. But it was done on the up and up to help the woman. She wanted to stay in her home. She didn't want to go to a nursing home. This way she was able to stay and she was happy. I felt good about it. She was able to live out her last days the way she wanted to."

Randall denied that he got any special deal, although he said one reason he was attracted to the house was because of the price.

"I was single [at the time]. I needed something to help me with taxes. I'm looking for a house and the price wasn't unreasonable and it was a chance to help someone out.

"The place was no bargain. It needed a lot of work," he said.

After the purchase, Randall said he invested between $20,000 and $30,000 in new windows and other repairs.

David Bookstaver, a spokesman for the Office of Court Administration, which oversees the courts, defended the deal, an unusual stance given recent moves by Chief Judge Judith Kaye and her number two, Chief Administrative Judge Jonathan Lippman, to at least give the appearance of breaking up the insider politics pervading business in Brooklyn civil court. It was Kaye and Lippman who, in the wake of Judge Barron's arrest, eased Pesce out of his post as administrative judge in favor of Judge Ann Pfau, an aide to Lippman who is seen by many Court Street lawyers as nothing less than an invading force whose mission is to tighten OCA's grip on the Brooklyn courthouse.

Bookstaver said the unadvertised sale of Perry's home to Scholnick's clerk did not trouble the powers that be within OCA.

"It was brought to the attention of counsel's office, and an opinion was given that there was nothing untoward or unethical about the transaction. It was not done in a vacuum. The final outcome did this woman a tremendous favor," Bookstaver said.

Terrelonge, the guardian who pushed for the sale, went on to serve as president of the Brooklyn Bar Association before dying this year after an illness. The bar association helps screen those seeking election to the bench, and the sometimes cozy relationships between lawyers active in the bar and judges they appear before has been sharply criticized.

Experts question why Terrelonge and Scholnick didn't push for a competitive sale of the home or devise another arrangement, short of a sale, that would have allowed Perry to draw on the equity in her home without having to give up ownership. Laws governing the disposal of property owned by incompetents require that the property be advertised for four successive weeks by a notice of sale "posted conspicuously on the premises" and by the publication of a notice of sale advertisement.

But in court papers signed by Judge Scholnick, Terrelonge argued successfully that those requirements be waived. Perry's brownstone was not advertised out of a fear "that posting and publication would be an open invitation for vandalism to the property and could bring about a danger to the occupants of the premises," Terrelonge stated.

Legal experts who advocate for the elderly said judges have a responsibility to look out for the needs of incompetents and avoid even the appearance of impropriety. "The bottom line is the interests of the incapacitated person have to be protected," said Toby Golick, director of Cardozo Law School's Bet Tzedek Legal Services.

Golick said it would be difficult to justify not advertising Perry's property on the open market. "It might be appropriate not to put up a for sale sign, but that doesn't mean there shouldn't be an effort to get the best price for a property by, for example, using a real estate agent or otherwise advertising."

 

One Brooklyn lawyer who specializes in elder law said the deal "smells. At the very least he [the judge] should have recused himself. Let another judge sign the order."

The lawyer also questioned why the house had to be sold at all. "Why sell her house? You could get a reverse mortgage."

In an appearance before a different Brooklyn Supreme Court judge, Sebastian Leone, who approved the final terms of the sale, Perry eventually agreed to the sale of her home. But she pleaded with the lawyers to not take advantage of her.

"I consent to it, but just give me someone to treat me good and don't take all the money from me. Let me live happy till I die."


Additional reporting: Ed Barrera


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