The purchase of a $2 million mansion by Buffalo Bills defensive end Mario Williams will bring some relief to victims of a scam by the home's previous owner.
The sale of the home in Aurora will yield about $500,000 for the victims of the convicted swindler who is in prison, court officials said Wednesday.
Williams bought the Woodcrest Drive mansion Monday from former attorney Kenneth P. Bernas and his wife, Michaelene. His purchase, which exceeded the asking price, will benefit Bernas' victims.
Bernas had been convicted last year of swindling 53 clients by taking out presettlement loans in their name without their knowledge. He was sentenced to 2 1/3 to 7 years in prison and was ordered to pay back $1.8 million in the criminal case, although the civil claims against him total $3.1 million to $3.3 million.
The court-ordered sale of the home, which was built in 2005 with the money Bernas stole, is part of multiple efforts by the court-appointed receiver for Bernas, Buffalo attorney William Savino, to recover and sell the swindler's assets to repay the victims. It's also likely to be the biggest single piece of the recovery, which is being overseen by State Supreme Court Justice John A. Michalek, who appointed Savino in January 2011.
"This is a great thing for [the victims] that the receivership was able to recover some of the assets, and they can receive some of the money that was stolen from them," Savino said.
The restitution effort is getting other help. First Niagara Bank, which held a junior or secondary mortgage on the property, waived its right to collect any of it, while RoundPoint Mortgage, the primary lender, agreed to a "six-digit discount" to enable some proceeds to go to victims.
"A lot of people had to help make that happen," said Savino, a senior partner and chairman of the business litigation and insolvency department at Damon Morey LLP. "Kenneth Bernas will not see a penny. His wife will not see a penny."
After deducting the remaining RoundPoint mortgage on the home, plus past-due taxes and attorneys' fees on the sale, about a half-million dollars will go toward reimbursements.
That's on top of another $150,000 to $200,000 that has already been recovered by Savino from legal fees that Bernas would have collected on personal injury lawsuits that he had initiated.
In addition, other lawsuits filed by Bernas for clients are in various stages of the legal process. While those cases were turned over to other attorneys after Bernas was disbarred, he still stood to collect a portion of the legal fees, which instead will go toward repayments.
Savino and his team also hope to auction the majority of Bernas' furniture and are working to sell several other pieces of real estate that could yield tens of thousands of dollars, such as a house Bernas owned with his brother in Hamburg and an office on Union Road.
"We're working to have that auctioned," said Trevor Barr, an associate attorney at Damon Morey. "We're hopeful to recover additional monies for that."
Bernas also owes money to the New York State Lawyers Fund for Client Protection, the state Department of Taxation and Finance, and three presettlement loan firms -- Peach Tree Financial, Magnolia Legal Funding and LawMax Legal Finance.
The money in the state lawyers fund, which is used to reimburse victims of lawyer malpractice, comes from annual dues paid by lawyers across the state and from other sources. The fund independently investigates each claim after an application is made, then pays full reimbursement, so that many of Bernas' victims have already been made whole. But the fund itself is now owed money.
Gerald Kordasiewicz and his late wife, Joann, are two victims. Bernas represented him in a case that contended his cancer stemmed from exposure to workplace chemicals.
The couple sued him for negligence in the case, for taking money under false pretenses. Bernas settled but then failed to pay, so they started collections efforts. Their claim was not covered by the state fund because they had filed their own lawsuit, so they have been seeking recovery on their own. They are still owed about $75,000.
"We've had a series of legal proceedings in this case, going back to 2007, so this has been a very, very long road, and we're hoping the end is in sight, given the substantial recovery by the receiver," said their attorney, Rodger Doyle of Kenney Shelton Liptak Nowak LLP. "It provides for some light at the end of the tunnel, not just for the Kordasiewiczes but for the many other creditors as well."
However, Savino and Barr acknowledged that they're a long way from full repayment:
"We're hopeful to collect as much money as possible. I don't know if we'll get to the $3.1 million, but it's important to know that the general public, the victims, are in the process of being reimbursed in full."