Liars, Swindlers and Escheats
May. 20th, 2018 08:25 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
captainsblogYou'll see references to this in "helpful financial tip" articles- HEY! The state has your money and wants to give it back to you!
The state agencies vary in title- here, it's the Comptroller's Office, a statewide elected position which, New York being New York, typically attracts political hacks with higher aspirations or, as with the holder prior to the current one, crooks who abuse the power of the office. Most of their work is dull as dishwater-auditing agencies and municipalities, managing the state pension fund, signing off on billions of checks- but their favorite attention-grabber is as the custodian of "abandoned property."
HEY! YA NEVER KNOW!
IT'S YOUR MONEY! CLAIM IT FOR FREE!*
(*Free, except for having to agree to photo ops like this which just make Good Ol' Tom seem your best buddy best pal for giving you back funds some entity was forced to turn over to him in the first place. Note the September date on that check. Let the record show that statewide officeholders are up for election in November, which is why rebate checks and such tend to show up in late October.)
The underlying legal concept for this is called, I am not making this up, "escheat."
It's an offshoot of the concept of royal prerogative, in which the sovereign gets first crack at every, shall we say, asset:
The state is the heir of last resort, and is thus the place where funds go to die- often, but not always, when their owner does. I actually checked on this site some years ago to see if I, or anybody from my family, had any such funds, and yay! My mother had a little over a grand, tied to her East Meadow address, that got turned over sometime after she died from an insurance company I knew her to have done business with. I contacted them, sent them her death certificate and a form,.... and was beaten down by the process. Even though it was a small sum, and even though I was acting both as a clearly eligible beneficiary and as an attorney, um, no. I would have to open an estate proceeding for her, and get me or my sister appointed for all the BS that would be required to split this money four ways (by law, me, Donna and my two nieces would each get a third). Wasn't worth the bother- which is what they depend on. We still could, in theory; there's no limitations on how long you have to get it. But if you're looking for a speedy resolution, well, Welcome To New York.
----
The usual contributors to this process are banks, insurance companies and other routine issuers of checks who use the process to get these funds off their books and out of their hair. (In contrast? If I have unclaimed funds for a client? I have to either make a motion in the underlying court proceeding if there is one to direct where the money should go, and, if there ain't one, I am ethically obligated to start a proceeding on my dime to do the same thing, and far as I know I don't get the cost of the filing or service fees reimbursed.)
All that's required to escheat the money to the State is a legal notice published, usually once, in some obscure corner of a daily or even weekly newspaper. Occasionally, I'll scroll through them, looking for people who owe money to my clients or even me. These detectives don't do a very good job of detecting; one list I read through recently was from the local Blue Cross franchisee, looking to relieve itself of liability for millions in uncashed checks. On the list were at least a half dozen hospitals, businesses and pharmacies (Wegmans, for one) which anyone with a brain could have called and arranged to get the funds sent. But it's easier this way, and so the behemoths just ship the money off.
None of which gets to why I am writing about this. No, for the second time in the past several years, and the first time directly affecting me and a client of mine, I learned that monies "paid into court" are subject to the same abandoned property rules as all these other diverters- and that, in fact, county clerks and treasurers and comptrollers (some counties, including Erie, have their own) are required to treat money deposited in specific court cases as "abandoned property" and ship them off to Albany after they've been on deposit for three years.
Money "paid into court" is a little-used but powerful tool, going back ages. The idea is that a party to a lawsuit can prevent conflicting claims to entitlement to funds, or secure an opponent against certain damages, if they turn over money or property deemed adequate to the task. The other routine source of these funds is "surplus money" in cases where a piece of real estate is foreclosed, by a bank or a tax agency. If the buyer at auction pays more than the debt, the selling referee is required to turn over the excess for ultimate determination of who gets it.
Our state civil practice statute regards a cash payment "of the required amount" as the equivalent of a bond for that same amount. Otherwise, the depositor has to satisfy the court of the bona fides of the bonding company, and renew and pay for the bond annually until the court decides who's entitled to what. Three years is a little on the long side for most of my work, but it's not rare to have a case go longer than that- especially where I come in late.
So it was with the subject of this post. He showed up in 2015 after a foreclosure which dates all the way back to 2011. There was money left over. I filed a claim for it in May of 2015. So did another party. I moved for a court determination of it that same year. And,.... nothing. The client, somewhat transient to begin with, fell off my radar, but every now and again I'd contact the judge who was supposed to decide it, and... still nothing. I finally learned that she'd been kicked upstairs to the intermediate appellate court, and that this case was so old that nobody had bothered to reassign it. Finally, this month, with the blessing of the other claimant, we agreed on a whacking-up of the funds and a new judge actually signed an order to accomplish it.
Except, that is, for the fact that the funds were offloaded to Albany in 2016, while proceedings were under way to determine who gets them, because, three years.
And the best part? You can't search surplus funds the way you can search me or Mom. They are separately indexed in big batches. Fortunately, I have the "action number" which allegedly will help identify them, but other than that neither the county nor the state provide any specific guidance in how to expedite the transfer back. And, really- why would they provide it? That money's helping to keep our great state solvent. It'd be a shame if somethin' happened ta it- like returning it to its rightful owners.
The state agencies vary in title- here, it's the Comptroller's Office, a statewide elected position which, New York being New York, typically attracts political hacks with higher aspirations or, as with the holder prior to the current one, crooks who abuse the power of the office. Most of their work is dull as dishwater-auditing agencies and municipalities, managing the state pension fund, signing off on billions of checks- but their favorite attention-grabber is as the custodian of "abandoned property."
HEY! YA NEVER KNOW!
IT'S YOUR MONEY! CLAIM IT FOR FREE!*
(*Free, except for having to agree to photo ops like this which just make Good Ol' Tom seem your best buddy best pal for giving you back funds some entity was forced to turn over to him in the first place. Note the September date on that check. Let the record show that statewide officeholders are up for election in November, which is why rebate checks and such tend to show up in late October.)
The underlying legal concept for this is called, I am not making this up, "escheat."
It's an offshoot of the concept of royal prerogative, in which the sovereign gets first crack at every, shall we say, asset:
The state is the heir of last resort, and is thus the place where funds go to die- often, but not always, when their owner does. I actually checked on this site some years ago to see if I, or anybody from my family, had any such funds, and yay! My mother had a little over a grand, tied to her East Meadow address, that got turned over sometime after she died from an insurance company I knew her to have done business with. I contacted them, sent them her death certificate and a form,.... and was beaten down by the process. Even though it was a small sum, and even though I was acting both as a clearly eligible beneficiary and as an attorney, um, no. I would have to open an estate proceeding for her, and get me or my sister appointed for all the BS that would be required to split this money four ways (by law, me, Donna and my two nieces would each get a third). Wasn't worth the bother- which is what they depend on. We still could, in theory; there's no limitations on how long you have to get it. But if you're looking for a speedy resolution, well, Welcome To New York.
----
The usual contributors to this process are banks, insurance companies and other routine issuers of checks who use the process to get these funds off their books and out of their hair. (In contrast? If I have unclaimed funds for a client? I have to either make a motion in the underlying court proceeding if there is one to direct where the money should go, and, if there ain't one, I am ethically obligated to start a proceeding on my dime to do the same thing, and far as I know I don't get the cost of the filing or service fees reimbursed.)
All that's required to escheat the money to the State is a legal notice published, usually once, in some obscure corner of a daily or even weekly newspaper. Occasionally, I'll scroll through them, looking for people who owe money to my clients or even me. These detectives don't do a very good job of detecting; one list I read through recently was from the local Blue Cross franchisee, looking to relieve itself of liability for millions in uncashed checks. On the list were at least a half dozen hospitals, businesses and pharmacies (Wegmans, for one) which anyone with a brain could have called and arranged to get the funds sent. But it's easier this way, and so the behemoths just ship the money off.
None of which gets to why I am writing about this. No, for the second time in the past several years, and the first time directly affecting me and a client of mine, I learned that monies "paid into court" are subject to the same abandoned property rules as all these other diverters- and that, in fact, county clerks and treasurers and comptrollers (some counties, including Erie, have their own) are required to treat money deposited in specific court cases as "abandoned property" and ship them off to Albany after they've been on deposit for three years.
Money "paid into court" is a little-used but powerful tool, going back ages. The idea is that a party to a lawsuit can prevent conflicting claims to entitlement to funds, or secure an opponent against certain damages, if they turn over money or property deemed adequate to the task. The other routine source of these funds is "surplus money" in cases where a piece of real estate is foreclosed, by a bank or a tax agency. If the buyer at auction pays more than the debt, the selling referee is required to turn over the excess for ultimate determination of who gets it.
Our state civil practice statute regards a cash payment "of the required amount" as the equivalent of a bond for that same amount. Otherwise, the depositor has to satisfy the court of the bona fides of the bonding company, and renew and pay for the bond annually until the court decides who's entitled to what. Three years is a little on the long side for most of my work, but it's not rare to have a case go longer than that- especially where I come in late.
So it was with the subject of this post. He showed up in 2015 after a foreclosure which dates all the way back to 2011. There was money left over. I filed a claim for it in May of 2015. So did another party. I moved for a court determination of it that same year. And,.... nothing. The client, somewhat transient to begin with, fell off my radar, but every now and again I'd contact the judge who was supposed to decide it, and... still nothing. I finally learned that she'd been kicked upstairs to the intermediate appellate court, and that this case was so old that nobody had bothered to reassign it. Finally, this month, with the blessing of the other claimant, we agreed on a whacking-up of the funds and a new judge actually signed an order to accomplish it.
Except, that is, for the fact that the funds were offloaded to Albany in 2016, while proceedings were under way to determine who gets them, because, three years.
And the best part? You can't search surplus funds the way you can search me or Mom. They are separately indexed in big batches. Fortunately, I have the "action number" which allegedly will help identify them, but other than that neither the county nor the state provide any specific guidance in how to expedite the transfer back. And, really- why would they provide it? That money's helping to keep our great state solvent. It'd be a shame if somethin' happened ta it- like returning it to its rightful owners.
no subject
Date: 2018-05-21 05:43 pm (UTC)