In October, Judge Cote ordered Kaufman to pay CUMIS $325,396, plus prejudgment interest of $31,532, for a total of $356,929.

In September 2021, Kaufman was sentenced to three years and eight months in federal prison after a jury found him guilty of accepting bribes from a taxi medallion business owner in exchange for millions of dollars in loans from the credit union and other benefits. Under a management and professional liability policy, CUMIS paid $3.2 million for Kaufman's legal defense fees, court costs, and vendor expenses in that criminal case.

Between October and December of 2021, Kaufman's counsel requested that CUMIS advance legal fees to cover Kaufman's appeal.

CUMIS, however, maintained that legal fees for Kaufman's appeal were excluded under his policy's dishonest or willful acts exclusion and the remuneration exclusion because he was convicted on two felony counts of bribery.

CUMIS nevertheless agreed to advance the fees because Kaufman said he would repay them if it were determined that the fees were excluded from the policy's coverage.

Last year CUMIS initiated a lawsuit that asked Judge Cote to find that Kaufman's legal fees on appeal are excluded under the policy's dishonest or willful acts exclusion and the remuneration exclusion provision. The insurer contended that because a jury found Kaufman guilty of "intentionally and corruptly accepting gratuities in exchange for the provision of favorable loans" his conviction constituted a "final adjudication." This meant the insurer was no longer obligated to pay legal fees for Kaufman's post sentencing proceedings, which included his appeal.

Kaufman countersued CUMIS arguing that there has been no "final adjudication" in his case because his appeal has yet to be decided.

"Under New York law, however, it is well settled that the imposition of the sentence constitutes the final judgment against the accused, and that the finality of it is not changed by the pendency of the appeal," Judge Cote wrote in her 11-page opinion and order. "Kaufman suggests that the Policy's term, 'final adjudication,' is distinct from 'final judgment,' and it therefore does not exclude legal fees incurred during appeal. But Kaufman does not explain why these terms should be interpreted differently, and New York cases have used the terms interchangeably."

Kaufman remains free on bond pending the outcome of his bribery conviction appeal, which is scheduled to be heard by the appeals court on Jan. 10.