Sour Grapes Or Rotten Grapes

July 5, 2003

Sour Grapes Or Rotten Grapes - There's a Difference

We were all so taken aback by your deep concern for Srila Prabhupada's original vani publications and your anxious anticipation of "Hansadutta not lifting a finger" to get them printed right after we learned that you embezzled $125,000 entrusted to you to invest in an arrangement for payment of your legal fees and yet another $60,000 from the 1998 settlement award.

What happened to the money? What happened to the books? No money, no books...

In hindsight, we are glad that early on in our client-attorney relationship we placed our disappointments and complaints about your professional mischief before an impartial third party, namely the California State Bar, for their investigation and final judgment. You and the readers will be happy to know that after 4 years the State Bar has concluded their long and drawn-out investigation of all the legal facts, and has fixed September 2nd, 3rd and 4th as the dates for prosecuting Joseph Fedorowsky aka Gupta das at trial. (September 3rd happens to be Srimati Radharani's appearance day, an occasion of great auspiciousness.) We will be sure to bring your "Sour Grapes" article for their review and entertainment--they'll love it.

Instead of throwing mud back at you, let's see what they make of your story as opposed to the facts. Readers stay tuned.

The following is an overview submitted as part of our complaint filed with the California State Bar, enumerating facts that we believe to be irrefutable. This is not simply a matter of disgruntled clients who are unhappy over their lawyer's bill. The joint complaint & supplementary documentation lay out a number of transgressions by Gupta, ranging from representing multiple clients without providing necessary disclosures and obtaining waivers to misappropriation of money belonging to clients not just on one occasion, but twice, and by fraud leading clients to agree to a settlement that allowed him to piggyback himself and his collaborators onto a position which ultimately gave him full control over the licensing board, and was a great financial boon to him, but to us a crushing financial loss.

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QUOTE (submitted to the California State Bar on July 3, 2001)

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Overview of Complaint

Case No. 99-0-11217

Respondent: Joseph Fedorowsky

This is intended to be a concise, brief overview of Mr. Fedorowsky's misconduct, which has been extensively documented in the original joint complaint, amended complaint and further in Kary's & Chan's correspondence addressed to Mr. VonFreymann dated on or about 21 January 2001, with over 98 exhibits and a Summation of Points by Mr. Lawrence E. Ornell, Atty for Mr. Kary and the Chans.

In May-June, 1997, Mr. Fedorowsky was engaged by Mr. Kary as defence counsel in the underlying litigation, to uphold the validity of a trust, of which Mr. Kary was trustee, and over the course of litigation, Mr. Fedorowsky advised Mr. Kary that it was in his interests to add cross-complainants. The action was concluded in November, 1998 with a settlement that included a copyright license agreement and settlement money.

1. As found to be true by an arbitration panel, Mr. Fedorowsky converted $125,000.00 in clients' funds belonging to Mr. Chan and Mr. Veda Guhya without their knowledge and authorisation. Although Mr. Chan was not a party to the underlying action, he had agreed to invest $100,000.00 in a trading scheme operated by Mr. Fedorowsky, so as to finance Mr. Kary's defence strictly on a voluntary basis. To date, Mr. Fedorowsky has failed to produce accounting for the investment, in spite of repeated requests.

Mr. Fedorowsky failed to disclose to the investor and clients his conversion of the investment principle, thus depriving them of information critical to the course of the legal action.

2. There was no attorney-client contract between Mr. Chan and Mr. Fedorowsky. Mr. Chan was never a party to the underlying action, and did not engage Mr. Fedorowsky to represent him. Nor did Mr. Fedorowsky ever advise Mr. Chan that he was representing him and discuss with Mr. Chan his rights and obligations. Even so, Mr. Fedorowsky afterwards issued a demand to Mr. Chan for $644,051.28 in legal fees.

3. Mr. Fedorowsky represented multiple clients without advising them of their rights and obligations, and without obtaining the necessary waivers.

4. Without providing the necessary disclosure, Mr. Fedorowsky left the role of attorney and became a business partner with clients. Mr. Fedorowsky had himself added into the Settlement Agreement as a member of the Licensee Board, and thus entered into a business relationship with clients. He did not provide any notice of conflict or advisement. After a conflict arose, and despite repeated requests, Mr. Fedorowsky has refused to end the conflict of interest by resigning from the Licensee Board.

5.*(See below) Mr. Fedorowsky's position that the settlement money was intended for attorney's fees was unfair to clients. He did not advise clients prior to settlement that agreement to accept cash as part of the settlement would trigger an increase in his fee rate from $50.00/hr to $200.00/hr, and that they would thus incur $84,601.25 in attorney's fees over and above what they would have been billed had there not been a cash component to the settlement.

The following math is based on 4327.55 total billable hours, per Mr. Fedorowsky's billing statement. Fedorowsky ("JF") total hours: 2,611.30, Wynton ("JW") total hours: 1,716.25.

Fees & Costs as at Settlement

Without Settlement Money Upon acceptance of Settlement Money

JF @ $50/hour = $130,565.00 @ $200/hour = $522,260.00

JW @ $25/hour = $ 42,906.25 @ $50/hour = $ 85,812.50

Plus Costs $ 35,978.78 Plus Costs $ 35,978.78

TOTAL $209,450.03 TOTAL $644,051.28

Mr. Fedorowsky afterwards claimed that the settlement fund constituted his attorney's fees and invoked a clause in the Attorney's Fees Contract that provided for his fees to be increased to $200 per hour, i.e.: --

$200 per hour for attorney Fedorowsky, $50 per hour for paralegal Wynton, plus costs, equals $644,051.28

Less settlement "attorney's fees" ($350,000.00)

Balance $294,051.28

This figure represents $84,601.25 more than the $209,450.503 fees and costs that Mr. Fedorowsky's bill would have amounted to at the rate of $50.00 per hour.

If there had been no cash settlement, clients should have got a refund (Mr. Fedorowsky's fees & costs @ $50.00 per hour amounted to $209,450.03, less $211,250.00 already credited to Mr. Fedorowsky = $-1799.97). Instead, Mr. Fedorowsky issued a demand for $644,051.28.

6. Mr. Fedorowsky charged an unconscionable fee. Whereas Mr. Fedorowsky issued a demand for $644,051.28, the arbitration panel found that he was entitled to only $300,000.00. Mr. Fedorowsky had in effect overcharged by more than 200%, amounting to more than 1/3 of a million dollars.

7. To date, Mr. Fedorowsky has not paid his half of the arbitration fee, so ordered by the arbitration panel and California Superior Court.

8. Mr. Fedorowsky represented falsely to the arbitration panel that the settlement money was sitting in a regular corporate account in the Bahamas, and that it did not belong to any trust; that the trust he had purportedly created had not been funded and was therefore never perfected. The trust was upheld by the Bahamas Supreme Court, which found that the trust had been funded with the settlement money, and ordered Mr. Fedorowsky's removal from his position as trustee and as signatory on the K.B., Inc. account.

9. Without his clients' knowledge and authorisation, Respondent Mr. Fedorowsky had taken $60,000.00 for his legal fees from the settlement funds that had already been designated as the trust fund. Mr. Fedorowsky's co-trustee informed the Bahamas Supreme Court of the misappropriation of trust funds, and Mr. Fedorowsky was removed from the trust for "problems with [Mr. Fedorowsky] over his charges as trustee in this trust (where he has refused to repay a second mistaken payment of 30,000 dollars)."

10. Mr. Fedorowsky has refused to release a copy of the file to his clients without first receiving fees.

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*What all the numbers add up to is that Gupta led us unawares to a settlement in which he positioned himself to gain at our expense. No sooner did he get his name in on the board of directors of Krishna Books, then he turned about-face in blatant conflict of interest with his clients, and took steps to block our participation in Krishna Books, and when we protested and tried to stop him, he came up with a claim that the monetary award triggered a clause in the attorney fee contract that allowed him to charge $200 per hour instead of $50 per hour. At $50 per hour, his fees should have come to $209, 450.03, but instead he slammed us with a demand for $644,051.28, even though he had made certain that we had derived no material benefit. Shortly after this, Gupta went to work for ISKCON.

Gupta represented to a panel of arbitration lawyers that he had deposited the BBT International Inc. settlement money in an attorney-client account.

To date he has not complied with the arbitration panel's order and California Superior Court order to pay back the $100,000 he misappropriated from Bhima and $25,000 misappropriated from Veda Guhya. The arbitration award further directed him to pay himself $92,000 for his fees, and the balance settlement money he was to pay out to his clients. Gupta was also ordered to instruct ISKCON/BBTI to pay out from an additional $50,000 of the settlement money ISKCON had held back, but so far Gupta has not paid out anything, nor has ISKCON paid out the $50,000. Effectively, Gupta swept away all the money. He has not even paid his share of the arbitration fees.

On top of that, 4 years later, Gupta & Krishna Books have not printed any books in spite of all the bravado. What happened to the money? What happened to the books? No money, no books--what kind of grapes did Gupta sell us?