A disbarred Yorktown lawyer could face up to 10 years in prison after admitting he stole nearly $1 million that had been awarded to a Sept. 11, 2001 first responder he represented.
Gustavo Vila appeared in White Plains Federal Court on Thursday and pled guilty to one count of theft of government funds. The money was awarded to former client and disabled NYPD officer John Ferreyra by the Department of Justice’s 9/11 Victim Compensation Fund.
“As he admitted today, Gustavo Vila stole money awarded by the 9/11 Victim Compensation Fund to his client, an NYPD officer and 9/11 first responder, and falsely told the client for more than three years that the stolen money had yet to be released by the Fund,” Acting U.S. Attorney Audrey Strauss said. “Now Gustavo Vila awaits sentencing for his crime”
Following Vila’s plea, Ferreyra said he trusted Vila, a retired NYPD lieutenant, to do right by him after being diagnosed with non-Hodgkin’s lymphoma in 2005. The cancer was linked to toxins ingested at Ground Zero during the months he spent assisting in rescue and recovery efforts.
Due to his diagnosis, Ferreyra has undergone surgeries, a stem cell transplant, chemotherapy, and multiple sessions of radiation therapy.
“This experience has been devastating,” Ferreyra said. “I trusted a fellow NYPD officer and I felt totally violated when I learned that he was a common thief and a liar and that his clear intent was to loot from me and the 9/11 Victim Fund.”
Following the Sept. 11 terrorist attacks, Congress created the VCF to provide compensation with federal government funds to any individual who suffered physical harm or was killed as a result of the attacks, or as a result of the debris removal efforts that took place in the immediate aftermath.
Claimants seeking compensation from the VCF were authorized to work with an attorney who would, on behalf of their client, submit a claim and receive the award from the VCF. Attorney’s fees were limited to 10 percent of any award, according to a statement from the Department of Justice.
Between 2012 and 2019, Vila represented Ferreyra following his diagnosis. However, while Vila acted as the middleman for his client and the VCF, he had been disbarred in 2015 due to an unrelated theft.
In May 2013, Vila submitted a claim to the VCF on behalf of Ferreyra, along with forms authorizing the VCF to deposit the awarded money directly into his law firm’s bank account. On Sept. 12, 2016, the VCF authorized an award of $1,030,622.04 for life-threatening illnesses that Ferrerya sustained at Ground Zero.
A month later, the VCF deposited the full amount into Vila’s bank account, officials said, which Vila was required to distribute, with 10 percent reduced, to Ferreyra. But Vila failed to inform his client about the full deposit – giving Ferreyra $100,000 and keeping the rest for himself.
Officials said Vila used the money for his own personal benefit, including to pay his own taxes.
Up until February, Vila had maintained the VCF had not yet released the additional compensation that was promised, claiming the organization ran out of funding, officials said.
Under the advisement of fellow officers who found the multi-year payout delay unusual, Ferreyra contacted New York City-based firm Barasch & McGarry. The group has represented more than 20,00 9/11 victims, including thousands of former police officers.
“Once I spoke to Mr. Ferreyra, I knew immediately that his prior attorney had stolen 90% of his award,” said Michael Barasch. “I told Mr. Ferreyra to call the VCF immediately and they confirmed that his award was paid in full to Vila on October 12, 2016.”
Barasch said his firm alerted the U.S. Attorney’s Office for investigation, while the VCF searched for other victims of Vila’s.
To provide financial relief to Ferreyra, Barasch said he applied to the New York State Lawyers Fund for Client Protection, a fund that protects legal consumers from dishonest lawyers. Ferreyra was awarded $400,000 as partial restitution, the maximum amount allowed under its charter.
Tens of thousands of World Trade Center first responders have become victims themselves, battling devastating illness caused by their exposure,” Barasch said. “I couldn’t bear to see this disabled police officer be a victim again.”
Villa will be sentenced on Feb. 5, 2021.
The prosecution of this case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Sarah L. Kushner is overseeing the prosecution.