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In lawyer's free fall from grace, a strange turn

THE BALTIMORE SUN

The latest pages in the life ledger of Fred Kolodner read this way:

Convicted of sports betting. Estranged from family. Slapped with palimony suit. Disbarred. Charged with practicing law without license. Convicted of stealing from clients. Accused of hiding money from creditors in bankruptcy proceedings.

Two weeks ago, a new entry was recorded, the strangest one yet. Arrested in New Jersey at age 66 for practicing medicine without a license.

Fred Kolodner may never have risen all that high, but his fall from grace has seemingly been without end.

It is now a distant memory, but there was a time when Fred Kolodner's life was full of promise. He graduated second in his University of Baltimore Law School class. He was once the law partner of Philip Goodman, who went on to become a Baltimore mayor. And he stood atop a prosperous downtown law practice, enjoying a reputation as "a hard-nosed plaintiff's lawyer . . . scrupulous and honest," in the later words of a judge.

Those flattering images of Kolodner have long since been crowded out by a mountain of evidence suggesting he became something else altogether.

"Some people, whatever idea they have is a dishonest one," said Melvin Hirshman, counsel for the Attorney Grievance Commission that helped strip Kolodner of his Maryland law license in 1991, ending a 42-year legal practice. "Mr. Kolodner would appear to be one of them."

His victims could fill a courtroom, maybe three dozen of them who trusted him and then were left wondering what happened to their money.

"That man caused me three years of heartache," said 61-year-old Catherine Yankee, from whom Kolodner had stolen $54,000, resulting in his 1991 conviction for theft in Baltimore County. "I think that man should really pay."

To this day, Kolodner says his clients were victims of his alcoholism. But during disbarment proceedings, a psychiatrist testified that drink had nothing to do with cheating clients. The problem, she said, was more fundamental. The psychiatrist said Kolodner is a narcissist who "feels that he deserves special treatment."

Treatment is what reportedly landed him in trouble in New Jersey. George Dix, mayor of Pleasantville, a stone's throw from Atlantic City, said Kolodner is alleged to have examined a patient in his wife's newly opened medical clinic, taken X-rays of the man's back, given him a brace, and signed a medical order granting him two days off from work.

The episode has left tiny Pleasantville slack-jawed. For months, townsfolk marveled at the Kolodners' conspicuous consumption -- their luxury cars, their exquisite dress, their not-to-be-missed jewelry.

Now they're abuzz over a scandal that is proving an embarrassment to a city administration that was caught sleepwalking.

Kolodner said last week the new charges against him were groundless. "I have never, ever treated any patient," said Kolodner, an Alfred Hitchcock look-a-like who wears a diamond-studded gold pinky ring. "This is not true."

Deborah Kolodner insisted that the charges against her husband stemmed from jealousy over her new clinic, closed barely three weeks after opening when Kolodner and two clinic doctors were charged with practicing without New Jersey licenses.

Pleasantville City Administrator Andrew Salerno merely wished the couple had never walked into his office. "I'm still hoping all this isn't true," he lamented.

"Lawyer brought dishonor"

They liked him in Pleasantville. He had a sense of humor and could tell a good story. Real down-to-earth. Not like his wife, whom they found haughty. They couldn't shake the feeling that she was looking down her nose at them, wanting to make sure they knew she had money.

"She is a young thing dripping with diamonds and rings," Mayor Dix said.

She introduced her husband as a retired Baltimore lawyer, and said it in a way that made them think he was once a distinguished jurist. They did not know that in his four-decade career, he had most distinguished himself by helping himself to his clients' money, using some of it to pay gambling debts.

As the mayor said, "That's not the sort of thing you'd put on your resume."

If it were, Mr. Salerno said, city officials probably would not have lent Mrs. Kolodner $20,000 interest-free to start the Kolodner Medical Clinic, especially not if they had known that Kolodner's malfeasance began after his wife had become the keeper of his books in 1981.

The Maryland Court of Appeals, which metes out punishment to wayward lawyers, did know, however.

In 1989, the judges decided that Mrs. Kolodner's inexperience as an office manager and Kolodner's alcoholism had led to sloppy bookkeeping and the disappearance of clients' money. Believing Kolodner was chastened, they suspended him with the intention of allowing him to resume practice.

He soon would make them regret their leniency. A trickle of aggrieved clients suddenly became a flood, each complaining that Kolodner had separated him or her from their money.

For example, Ms. Yankee had hired Kolodner in 1988 to recover $72,000 on an insurance policy to enable her to rebuild her fire-damaged East Baltimore home. He got the money, but most of it never found its way to Ms. Yankee. Unable to rebuild her house, she was forced to move three times over the next three years.

Irene Lowery and her husband, Walter, now a retired assembly line worker for General Motors Corp., went to see Kolodner in 1989 about their son's divorce. The Catonsville residents said the lawyer soon directed the conversation to their investments.

"He said we weren't making enough and he could get a lot more for us," Mr. Lowery said.

Kolodner persuaded them to give all their savings -- $79,000 -- to him. They never saw their money again.

"We tried to call, but he wouldn't take our calls," Mrs. Lowery said. "We'd walk over, but nobody would let us in. Finally a secretary told us that he didn't want to see us and told us we'd better go get a lawyer."

In January 1991, the Court of Appeals, its sympathy long gone, disbarred Kolodner.

The following October, a Baltimore County judge convicted him of stealing from Ms. Yankee and sentenced him to 18 months' probation. (When Kolodner pleaded guilty, three counts of practicing law during his suspension were dropped.)

Kolodner's transgressions have given him special status within the Client Security Trust Fund, a Maryland agency formed to reimburse the victims of legal malpractice.

The trust fund has paid $190,000 to 21 of Kolodner's former clients, making him the most prodigious thief in the fund's 26-year history.

Even now, new claims against him trickle in.

Dr. Christiane Tellefsen, a psychiatrist who is now acting superintendent of the Clifton T. Perkins Hospital Center, evaluated Kolodner during his disciplinary hearing. She concluded that he felt "very little empathy for the people involved" and no remorse.

"He is a lawyer who brought dishonor to the profession," Mr. Hirshman said.

"Hard to believe"

If Kolodner's life is in shambles, it is not unfamiliar terrain for him.

In his disciplinary hearings, Kolodner built his defense around his 30 years of alcoholism.

His drinking was well-known to everyone who has ever worked under him, some of whom often stumbled across bottles in office file cabinets and drawers.

For most of his career, though, his alcoholism did not seem to affect his practice, long envied by other downtown lawyers for the volume of clients.

Though he was once considered a gifted trial lawyer, he began sending junior associates into the courtrooms while he concentrated on drumming up business.

If the drinking didn't affect his work at first, it destroyed his marriage and estranged him from his three sons. None of them ever forgave his father for his detachment and treatment of their mother. When the eldest, the director of a New York art gallery, was dying of acquired immune deficiency syndrome in 1989, he left instructions that his father was not to be allowed at his funeral.

In 1978, Kolodner suffered the embarrassment of a conviction for sports betting.

In 1981, he was slapped with what appeared to be Maryland's first palimony lawsuit. It was brought by Delores Berry, a singer whom Kolodner said he met on The Block. He settled the case for $26,000. Ms. Berry has since died.

In 1981, Deborah Wilson literally walked into his life. She was a young secretary, a Garrison Forest School graduate who answered his newspaper ad for office help. He hired her on the spot. Two months later, he married her. She was 25. He was 56.

It remains unclear today what happened to all the money Kolodner took from his clients. Some went to pay gambling debts. While on a Santa Domingo gambling junket to the Dominican Republic with his wife in 1988, Kolodner gave the account number of his clients' escrow account to a casino operator. He wrote $16,000 worth of checks on that account.

The couple did not live a Spartan existence. They both have expensive wardrobes, particularly Mrs. Kolodner, a slim redhead with a fondness for long, painted nails, jewelry and furs. They have a Jaguar, a Rolls-Royce and a Mercedes. On occasion, they have been spotted in chauffeur-driven limousines.

Outside Pleasantville and an easy jaunt to the nearby casinos, they live in an imposing home with his and hers swiming pools. When clients fretted over where their money was, Kolodner would sometimes assure them he was good for it; he claimed to own a $930,000 home in New Jersey.

(The Kolodners still own a modest home in Randallstown, though neighbors say it has been on the market for nearly two years and the couple rarely visit it.)

In Pleasantville, no one would have guessed that Kolodner was in bankruptcy. Facing foreclosure on the Randallstown house, he filed for bankruptcy in January 1989. He listed debts of $422,000. His only assets, he said, were the $180,000 Randallstown house and the $860 a month he received from Social Security.

And what of the house in New Jersey and the cars?

According to a federal lawsuit, before he filed for bankruptcy, Kolodner fraudulently transferred ownership of the New Jersey home and the Mercedes and the Rolls-Royce to his wife's name to keep them away from his creditors.

"It's hard to believe he ever was an officer of the court," said Kerry L. Weil, an attorney for the bankruptcy trustee.

"Heads will fall"

For a while, the Kolodners seemed just the tonic sad little Pleasantville needed. The town, an afterthought next to glitzy Atlantic City, has long suffered an inferiority complex, and the recession has only made it drearier, emptying its Main Street of one business after another.

Then, out of nowhere, this flashy couple from Baltimore arrived to start a state-of-the-art medical clinic.

"We've been hoping that Pleasantville will revive," said Terry Uy, co-owner of a small diner on Main Street. "That's why we were excited about the medical center opening, a new business."

City officials were excited, too, and lent Mrs. Kolodner, apparently the corporation's sole officer, $20,000. (The South Jersey Economic District was about to ante up another $100,000 when the clinic was closed last week.)

Mr. Salerno, the city administrator, said the town was satisfied with its checks on Mrs. Kolodner, although they do not seem to have been particularly thorough. City officials knew nothing about Kolodner's past and very little about his wife.

They did not know, for example, how Mrs. Kolodner was financing renovation of the former union hall and filling it with medical equipment. She said last week that she had mortgaged her New Jersey house (the one bankruptcy trustees said was improperly conveyed to her) and that her father also had invested money in the project.

Town officials also didn't know that Mrs. Kolodner's experience in medical clinics apparently lasted all of 10 months in 1990 when she worked as a collection agent and business promoter of four Baltimore clinics owned by Dr. Leroy Amar. Her tenure ended in lawsuits over money between herself and Dr. Amar.

The Kolodner Medical Clinic nevertheless opened to much fanfare Jan. 16. Shortly after that, though, town officials learned that Mrs. Kolodner would miss a February deadline for repayment of part of the loan. The information spurred town officials to do the checking they didn't do before. They soon learned that the clinic's two doctors were not licensed in New Jersey. The information was passed to the prosecutor's office.

According to the mayor, the prosecutor sent an investigator into the clinic posing as a patient. Apparently, the mayor said, no doctor was present, so Kolodner, presenting himself as a physician, examined the undercover agent and diagnosed back problems.

Kolodner was arrested and now faces a possible prison sentence of five years and a fine of $7,500.

Kolodner said last week that he did nothing wrong and that he has no role in the clinic. Mrs. Kolodner promised that "heads will fall in Pleasantville" as a result of the allegations.

Mr. Salerno is simply trying to understand how such an embarrassing scandal could have occurred under his nose. And if he had the chance to speak to the Kolodners again, what would he do?

"I'd probably shake my head and say, 'How'd you get this involved? How'd you let it go this far? How could you use this kind of profession and take advantage of people in need?' "

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