D.A. investigates fraud charges

In the days following Hempstead attorney Jay Korn's suicide, 78 complaints from victims alleging that he defrauded them out of a total of $23.7 million have been filed with the Nassau County district attorney's office. Korn, a Rockville Centre resident and a past president of the Oceanside Board of Education, committed suicide March 24 by jumping from the roof of the building of his law firm, Korn & Spirn.

Nassau County police spokesman Detective Lt. Kevin Smith said he believes there may have been several reasons why Korn took his own life. He may have believed a Ponzi scheme prosecution was looming, Smith said, adding that Korn had withdrawn money from his bank accounts prior to his death.

The D.A.'s office has confirmed that evidence was seized from Korn's firm, though neither the firm nor Korn's partner, Arthur Spirn, are under investigation. A woman who answered the phone at Korn & Spirn declined to comment.

Attorney Jerome Reisman is representing seven clients from Rockville Centre, Oceanside, Great Neck, Roslyn and Manhattan who believe they may have been defrauded by Korn. Reisman said Korn used his community contacts to his advantage. “This is nothing more than a mini-Madoff,” he said. “What he did was prey on the vulnerability of his clients and friends and social acquaintances that he met through organizations.” Reisman said that Korn promised his clients annual returns of 15 percent on their investments.

Korn was a member and past president of the Middle Bay Country Club, and he was also on the Board of Directors of the Friedberg JCC for more than 20 years. Last week, staff members at Middle Bay remembered him as a beloved member of the group and an advocate for improvements to the club over the years, but declined further comment after they learned of the allegations against him.

In a written statement, the marketing director of the JCC said that even though Korn was on the organization's board, "at no time was the JCC ever involved in any financial relationship with Mr. Korn such as those currently under investigation, nor — to our knowledge — did Mr. Korn ever solicit clients at the JCC for any purpose."

“Jay always acted in a kind and caring manner during his tenure on the JCC board, making the allegations that are now surfacing even more difficult to absorb,” the statement continued. “Should they prove to be true, they will only further compound the devastating sense of loss that we all have felt since his passing.”

Larry Cline, an attorney representing seven other people who invested money with Korn, said several of them are still in shock. Cline himself is an Oceanside native who knew the Korn family and went to Oceanside High School with Korn's daughters. “Jay Korn was always a very well-respected member of the community,” Cline said. “I think people were shocked and ultimately will be very disappointed if this whole debacle turns out to be a fraud.”

Cline said he is still investigating investors' claims and has come across several documents that appear to be fraudulent mortgage contracts. But he said that it is still too early to determine whether Korn was running a Ponzi scheme.

In the past week, people from as far away as California have come forward claiming they have been victimized by Korn. Herbert Kramer, an attorney who is representing a California doctor, said his client gave Korn $2.6 million toward the purchase of a condo in Manhattan, and the money is now unaccounted for. Kramer has filed a claim with the Nassau County district attorney's office.

Linda Clark of Tompkins Cove, N.Y., also believes her family may be among Korn's victims. Clark said that Korn's father had been the family's attorney since 1969, and that Jay had taken over when his father died, handling most of the family's business, including drafting wills for Clark and her husband.

Korn also drew up the legal papers to help Clark's mother sell their home in Brooklyn 15 years ago. It was at that time, Clark alleged, that Korn asked the family to invest $50,000 to help with real estate transactions. She said Korn told the family that the money would help people who could not afford mortgages and were borrowing money to buy real estate. Clark's mother invested $25,000 with Korn, and since then, Clark said, she has received exactly $333.33 every month for the past 15 years, essentially paying off that initial loan.

“I guess it was done on a blind trust," Clark said of the investment. "This totally blindsided us.”

“The sad thing is, he's not here to defend himself,” said Kevin Raab, an Oceanside resident whose family has known the Korns for more than 40 years. “Let the investigation continue and let the family have time to grieve a father and a grandfather.”

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