YOUNGSTOWN 99 claims are filed to recoup money from Goldberg

The claims total nearly $24 million, but there is less than $1.5 million available.
By BOB JACKSON
VINDICATOR COURTHOUSE REPORTER
YOUNGSTOWN -- The number of people, businesses and government agencies who got in line for a piece of Richard Goldberg's bankruptcy pie did not surprise the trustee in charge of the case.
Nearly 100 claims were filed against Goldberg, a former local medical malpractice attorney, said Atty. Ann Piergo Silagy.
"That's a large number, but it was not unexpected to me," said Silagy, of Canton. "There are no other comparable cases that I'm aware of."
Goldberg, 56, of Liberty Township, filed for bankruptcy protection in January. He is serving a 57-month federal prison sentence for pocketing millions of dollars that should have gone to his former clients from lawsuit settlements.
Not enough money: Creditors who wanted to stake a claim to Goldberg's assets had until Nov. 16 to do so. A total of 99 claims for nearly $24 million ended up being filed. The problem is that only about $1.2 million has been collected, mostly by liquidating Goldberg's assets, to help pay off the victims, Silagy said.
She's expecting to receive more next month when his house on Royal Arms Drive is auctioned. Some vehicles and office equipment are also to be sold.
That still will be far short of the amount needed to satisfy the victims' claims, Silagy said. She acknowledged that most of the creditors will not be paid all of what they are owed, though she hopes to get at least a little money for as many of them as possible.
Silagy said she is still looking for other assets that can be used to help repay victims.
Federal bankruptcy rules establish the procedure that will be followed to determine who gets paid first. A local unsecured creditors committee will assist.
Claimants: Most of the claims filed against Goldberg were by or on behalf of former clients who say they are still owed money.
The U.S. Internal Revenue Service filed a claim for about $2.3 million, and the Ohio Department of Taxation filed claims totaling about $1.3 million, all for unpaid income taxes, Silagy said.
The Ohio Supreme Court's client security fund also lodged a claim for about $1.4 million. The fund is maintained by the high court to reimburse people who are defrauded by attorneys. Fund officials have said more claims have been filed against Goldberg than any other lawyer in the state.
Local businessman Anthony Cafaro filed a claim for $474,300. In his bankruptcy petitions, Goldberg noted that he borrowed money from Cafaro in 1999 to help settle some of the estate claims against him.
State's case: Goldberg also faces state criminal charges, which could bring an additional 83 years in prison if he is convicted. He filed a motion recently in Mahoning County Common Pleas Court asking that the charges be dismissed, arguing among other things that he'd struck a plea agreement with Prosecutor Paul Gains that precluded him from being charged under Ohio law.
Goldberg argued that during a "chance encounter" with Gains outside a local restaurant in 1999, Gains said he would not press state charges if Goldberg cooperated fully and was truthful with federal authorities. That, Goldberg said, constituted an informal agreement.
In court documents filed Friday, Assistant Prosecutor Jay Macejko said plea agreements must be approved by a judge, so the informal conversation between Gains and Goldberg does not constitute a plea deal.
But even if a deal existed, Goldberg breached it himself by concealing assets in the federal case, which resulted in his getting a longer federal prison sentence, Macejko said.
bjackson@vindy.com