The Boston Globe May 6, 2001, Sunday
LAWYER'S FALL A PUZZLING CASE DEFENDER OF 'SLEAZES'
AND 'OVERPRIVILEGED' FACES RECORD CLAIMS OF EMBEZZLEMENT
SECTION: NATIONAL/FOREIGN; Pg. A1
By Kimberly Blanton, Globe Staff
It looked like easy money. All Morris Goldings needed to make a quick $160,000 last August was to buy a bronze statuette of Auguste Rodin's "The Thinker," resell it, and pocket the profit.
But to do the deal, Goldings, a Boston lawyer known in the 1970s for defending strip clubs and representing big-name clients such as boxer Marvin Hagler and Bruins star Cam Neely, had to find a partner to pay for the 28-inch sculpture, cast in a Paris foundry in the late 19th century.
Goldings had connections. He hooked up with Go-Best Assets Limited, a Hong Kong financial firm he had worked with in the past. And he offered it a 50/50 split of profits from the deal.
There was one problem: There was no Rodin for sale. Goldings knew that, because he had represented the Manhattan dealer who had brokered the actual sale of the sculpture to a European buyer a month earlier, according to court documents and the dealer's attorney. Go-Best has sued, charging that Goldings did not repay the firm's loan for the proposed art deal, and another $5 million loan involving a stock transaction.
Goldings's problems go far beyond the Go-Best lawsuit. He faces 18 claims from individuals and companies seeking to recover $16.5 million entrusted to him in the past five years. If proved, the allegations would amount to the largest embezzlement of client funds by a lawyer in US history.
Now, 25 years after Morris Goldings burst onto the Boston legal scene with his high-profile representation of Combat Zone clubs like the Two O'Clock Lounge and the Naked i - once arguing that the government's campaign to close down a club constituted "social discrimination" against seamy living - the 64-year-old lawyer's life and career are in shambles.
The man who once reveled in the public attention that came with a list of clients whom he would describe as "sleazes" or the "overprivileged" is keeping a low profile, spending most of his time at his Newton condominium with his wife, Jean. Having quit the law firm he founded, Goldings is himself targeted in a stack of lawsuits.
A host of former clients have accused Goldings of misusing their funds. Aggrieved parties include Patrick Petronelli, the trainer of Hagler, also a Goldings client, and the estate of Endicott "Chub" Peabody, a former Massachusetts governor and Goldings confidant.
The lawsuits have spurred an investigation by the US attorney's office and the FBI. Goldings's license to practice law has been suspended, and the firm he founded in 1961, Mahoney, Hawkes & Goldings, has sought bankruptcy protection from mounting claims against it and Goldings. His former partners, who say they knew nothing of Goldings's activities until a client complained last November, have removed his name from the firm as they struggle to hold their practice together.
Beyond the legal quagmire, Goldings has left behind a community of bewildered colleagues who wonder what happened to "Mo," the affable lawyer whose rumpled appearance seemed to belie a deep knowledge of the law and a mastery of unorthodox courtroom tactics.
"If these allegations are true," said Marty Weinberg, a criminal defense lawyer and an admirer of Goldings, "what black forces were driving this man to put his whole professional career at risk?"
No one seems to have come forward with a good answer. Goldings declined to comment when he last appeared publicly in February in Newton District Court, while being arraigned on larceny charges in connection with one of the lawsuits. His lawyer, Steven Brooks, a partner with Deutsch Williams Brooks in Boston, said Goldings suffers "psychiatric problems and has been under treatment and under medication, as prescribed by his doctors, for a number of months."
Others close to Goldings said his brother, Herbert Goldings, a Boston-area therapist, accompanied Goldings in December when he checked into Butler Hospital, a Providence psychiatric facility.
In January, Goldings said in an interview that he intended to return the money to former clients. "I am working on that," he said. His lawyer said friends were willing to contribute money toward the claims.
So far, that hasn't happened.
A tangled financial web
Where is the money? So tangled are Goldings's financial dealings that it could take the FBI years to find that out. Account No. 1105778891 at Citizens Bank, set up by Goldings to hold clients' funds, is empty, his former partners said. Millions flowed through that account from clients for settlements, escrow accounts, estates, tax-minimization, and investment deals, such as Go-Best's, that fell far outside the traditional practice of law, according to court documents and sources familiar with the FBI investigation.
Bruce Edmands, a partner at Mahoney Hawkes LLP, said Goldings had exclusive control of the account; statements were sent to his home. Goldings improperly diverted to the Citizens account $400,000 in payments that clients had intended to pay the firm for legal fees, Edmands said.
Goldings's former partners have pored over his books and discovered that client funds were mingled with funds from Gold ings's investment deals. These deals ranged from art and stock transactions detailed in lawsuits to an unsuccessful plan last year to raise money from investors to buy the Desert Inn hotel in Las Vegas, other sources confirm.
"We had no idea that Goldings was using his account for such a broad array of purposes, including investment purposes, tax avoidance, and art deals," Edmands said.
No one can say whether Goldings spent the money, lost it in an investment, or stashed it overseas. The bank account was only a starting point for FBI agents, who are looking into whether Goldings funneled money to bank accounts in Nevis, a tiny island in the British Virgin Islands he touted to clients as an offshore investment haven, according to sources familiar with the investigation. The FBI is also seeking subpoenas for financial records in Europe, sources said. The mess Goldings is now in has taken him a long way from his days as a civil litigator and criminal defense lawyer, who took on controversial cases but drew the line at defending drug dealers, who, he said, "do great damage." He did represent Combat Zone strip clubs, however, and took at least three cases to the Massachusetts Supreme Judicial Court. Goldings characterized the Suffolk district attorney's attempt to close the Naked i in 1977 as "social discrimination" against club owners and against their patrons "who go to such places for titillation."
The case-juggling ability of this unkempt man with a 1960 Harvard Law degree - classmates included US Supreme Court Justice Antonin Scalia and former governor Michael S. Dukakis - was legendary. He would arrive in court and remove one of his trademark hats - assorted fedoras, or, perhaps, a straw boater with a navy-blue silk band. And, with papers falling out of his briefcase, he would argue on a client's behalf.
After founding a law firm 40 years ago with William Hawkes, a corporate lawyer, and Charles Francis Mahoney, who would do a stint in Governor Edward King's Cabinet in the late 1970s, Goldings built a network of Boston political contacts. A regular contributor to the Democratic party, he gave $100,000 toward President Bill Clinton's 1993 inauguration.
Goldings's career flourished in the 1980s as his reputation spread beyond Boston's courthouses to Las Vegas, where he was instrumental in winning acquittal of 13 defendants who had been charged in a computer-gambling ring. His contacts provided a steady supply of white-collar defendants and a prestigious clientele.
Now some of those longtime clients and friends are suing. Based on a 40-year friendship with Goldings, former governor Peabody appointed him executor of his estate. Peabody then penned a personal thank-you note for "helping me and my family," a family member said. Peabody died in December 1997, and the family's suit in Suffolk Superior Court says that more than $1 million turned over to Goldings is missing.
A common thread among the clients bringing allegations against Goldings was trust. Some were so trusting that they asked for little documentation of their money, and became aware of problems only after allegations became public.
The governor's son, Endicott Peabody Jr., said he never harbored doubts about his father's executor. "I thought, 'That's a great choice,' " he said. " 'The work will get done, and our affairs will be put in order, because Morris is not only a well-respected attorney but he loved my dad.' "
Dr. George Siber was not so trusting. Anxious about Goldings's failure to return more than $2 million won in a drug royalty case and placed in escrow in 1999, Siber, the chief scientist for Wyeth-Ayerst Pharmaceuticals in New York, notified Goldings's partners at Mahoney Hawkes in mid-November that Goldings would not return the money.
Bruce Edmands said he and other Mahoney Hawkes partners had confronted Goldings at their offices across from the Boston Park Plaza. Edmands said Goldings had assured them that Siber would be repaid "within one week," said he held funds on behalf of Siber and only two other clients, and promised to turn over custody of his client fund bank records to the firm immediately.
"Those promises turned out to be hollow," Edmands said.
Unknown to Goldings's partners, days before their confrontation over Siber, another client, John Jameson, a 62-year-old resident of Plaistow, N.H., said he had authorized a $250,000 check after Goldings explained in a letter Nov. 3 that it was urgently needed to prevent the IRS from slapping a lien on his brokerage account. Jameson has sued, and his lawyer, Gordon Katz of Holland & Knight, said that there was "absolutely no evidence" of any lien, and that his client had never been notified by the IRS. A surprise to friends
What puzzles Goldings's colleagues about the allegations, they say, is that Goldings, whose aggressive courtroom tactics could rankle opponents, was also known for small kindnesses. He was a regular at colleagues' weddings and funerals and at their children's bar mitzvahs. He often joined Judge J. John Fox for breakfast at his corner table at the Ritz-Carlton.
"If you asked me if he was capable of accomplishing that kind of conduct, I would say categorically, 'No,' " said James Binns, a lawyer from Philadelphia who became friends with Goldings during a case in the mid-1980s.
Lawyers who know him say Goldings was not a gambler or big spender. His lifestyle is modest for an established lawyer: In addition to a nondescript condominium behind the Atrium mall in Chestnut Hill, he owns a condo in Palm Beach, Fla. His one extravagance is an art collection.
But people close to Goldings know his personal finances were strained. In 1993, he paid almost $600,000 in back taxes to remove IRS liens on his former home, according to Middlesex County deed records. And early last year, he paid off a loan from a sympathetic client, Cape Cod money manager Thomas McIntyre, according to real estate records on Goldings's Chestnut Hill apartment.
Why did McIntyre lend him money? "Morris had indicated a severe need for money," said McIntyre's lawyer, Michael Haratz of Roseland, N.J.
Goldings's reputation among his colleagues frayed as well. In the 1990s, he faced numerous malpractice suits, which are rare for defense lawyers. Between 1990 and 2000 - prior to allegations of missing funds - Goldings was sued six times in Massachusetts Superior Court for malpractice, mostly related to his handling of criminal cases. Three suits were settled, two are pending, and one was dismissed.
In 1999, Goldings was the subject of buzz in the Boston bar about his decision to turn against his colleague and friend, Thomas Dwyer, and to write a court brief in support of a malpractice suit filed by Simon Fireman against Dwyer. Fireman, who had pleaded guilty to funneling illegal contributions to Bob Dole's 1996 presidential campaign, said Dwyer failed to raise free-speech arguments in his defense. A judge dismissed the malpractice case.
It was Fireman, Goldings's client and friend, who introduced the lawyer to Go-Best, whose allegations of reckless financial transactions are now the biggest single claim against the lawyer. Funding a purchase
When Goldings approached Go-Best last summer about financing the Rodin purchase, he had already prepared paperwork for the sale of the piece for one of his clients, James Trezza, who owns a gallery on 72d Street in Manhattan.
Trezza's lawyer, Jeffrey Roy of Ravech & Roy in Boston, said Goldings appears to have "mixed and matched" papers from the true Rodin sale, apparently to prepare the proposal for the loan that Go-Best says was never repaid. "You look at the paperwork and what other conclusion can you draw?" said Roy after being shown a copy of the Go-Best loan documents. [Trezza sued Goldings in March for failing to return $718,000 he and his parents invested in a stock deal and for his commission on the Rodin sale. The authenticity of other documents that Go-Best says Goldings presented the firm are also being questioned: On a certificate verifying the sculpture as a true Rodin, a signature of a Stanford University art professor, Albert Elsen, is misspelled "Eisen." Tom Seligman, director of Stanford University's Canter Center, which oversees the Rodin sculpture garden, said the signature bears "no correlation" to Elsen's signatures in his files. Elsen died in 1995. And a paper purporting to show that the Rodin was insured is "not a legal document," said Huntington T. Block, a Washington broker on whose letterhead the policy was written.
While many who came into contact with Goldings say they lost their money, the seller of that version of "The Thinker," who lives in Montevideo, Uruguay, was paid. But Raquel Halegua, a Washington art dealer who worked with the seller, said she had to make numerous appeals, via Trezza, before the money was delivered.
Financial documents filed in court may explain the delay.
They show that two different parties paid for the same sculpture. One wire transfer shows the Rodin's buyer, Multi Line Properties on the Isle of Man, sent $719,960 to Goldings's Citizens Account No. 1105778891 on July 25. Thirty-six days later, the seller was paid - but not by the buyer. A second document confirms that it was Go-Best that wired $560,000 to the seller's law firm.
The payment came late, but it came. Because of assurances about Goldings's reputation, Halegua didn't panic. "Some excuses were given to me," she said. "But since James Trezza knew this Goldings, I didn't worry very much."
SIDEBAR: WHERE IS THE MONEY? EIGHTEEN CLAIMS TOTALING $16.5 MILLION HAVE BEEN MADE AGAINST MORRIS GOLDINGS. HERE ARE SOME OF THE TOP ONES: PLEASE REFER TO MICROFILM FOR CHART DATA.
CORRECTION-DATE: May 13, 2001, Sunday
GRAPHIC: PHOTO CHART, 1. Morris Goldings outside the Naked i club in Boston. He defended the club in the 1970s against attempts to close it, accusing officials of "social discrimination." / GLOBE STAFF FILE PHOTO / JANET KNOTT 2. Morris Goldings at the Newton courtroom in February, when he was arraigned on larceny charges in connection with a lawsuit filed by a former client. / GLOBE STAFF FILE PHOTO / JANET KNOTT 3. Morris Goldings in a Newton court in February, his last public appearance. / GLOBE STAFF FILE PHOTO / JANET KNOTT