Meyer Wilson | Investor Claims In the News
Ponzi Scheme Leads to Lawsuit Against New York Firm
Posted on Jul 16, 2010
A Ponzi scheme has led to a lawsuit filed against a New York law firm. A New Jersey woman has sued the firm, Cushner and Garvey, for fraud and breach of contract.
According to a lawsuit filed in Westchester County Supreme Court, Patricia Romano claims that her attorneys at Cushner and Garvey advised her to invest $875,000 she received in a settlement from her ex-husband with Edward Stein at Counsel Financial LLC. According to the settlement agreement, Romano’s funds were to be placed in a trust account at Morgan Stanley.
However, Mr. Stein was arrested and charged with operating a Ponzi scheme involving approximately $30 million. Mr. Stein allegedly embezzled Ms. Romano’s money. She claims that her attorneys failed to disclose that Mr. Stein was involved in Counsel Financial.
Mr. Stein’s Ponzi scheme lasted from 1998 to April 2009. The Eastern District of New York U.S. Attorney’s Office and the Securities and Exchange Commission (SEC) filed securities fraud charges against him. He pleaded guilty and was sentenced to nine years in prison.
Cushner and Garvey told Ms. Romano that Counsel Financial would guarantee a 10.5 percent annual return, much larger than what was offered by Morgan Stanley. However, Ms. Romano was never provided any documentation on Counsel Financial or its investors.
Ms. Romano is suing Cushner and Garvey for legal malpractice, fraud, breach of fiduciary duty and unjust enrichment and conversation. She is seeking a minimum of $700,000 from the firms and its two partners, Todd S. Cushner and Lawrence A. Garvey.
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