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A civil RICO suit filed against two Connecticut attorneys in federal court in Hartford has survived the lawyers’ summary judgment motions and is set to begin trial next week. Attorneys Leonard A. Fasano and Todd R. Bainer are accused of committing wire, mail and bankruptcy fraud in a conspiracy to shield their client’s assets from a judgment creditor. Fasano is a partner with the New Haven firm of Fasano, Ippolito & Lee as well as a former Republican state senator and assistant minority leader. Bainer practices law in Branford. Their alleged misconduct dates back to 1998, when Cadle Co., a national debt-purchasing business, tried to collect a $90,747 federal judgment against Fasano’s client Charles Flanagan in connection with Flanagan’s default on a $75,000 loan. Bainer was corporate counsel to Thompson & Peck Inc., a New Haven-based insurance company that Flanagan jointly owned with Stanley Prymas, another co-defendant in Cadle’s civil Racketeer Influenced and Corrupt Organizations Act suit. U.S. District Judge Alfred V. Covello’s May 2 summary judgment ruling in Cadle Company and D.A.N. Joint Venture Ltd. v. Charles Flanagan et al. left little doubt that the judge has few, if any, questions of fact about the attorneys’ liability in the case. Viewed in the light most favorable to Cadle for the purposes of summary judgment, Covello found that the pattern of allegedly fraudulent conduct by Fasano and Bainer “far exceeds the rendering of legal advice.” “The record supports a finding that Flanagan, his business partner, and his lawyers adopted fraud as a mechanism to defeat Cadle’s lawful claims,” Covello wrote, adding that Fasano’s intentional misrepresentations to the court about Flanagan “demonstrate a disregard for the rule of law and the authority of this court.” Fasano’s attorney, David G. Hill of Hartford-based Halloran & Sage, said the ruling is of “no significance except that we’ll have to win our case in court.” Bainer didn’t return phone messages. A trial date has been set for May 23. OBSTRUCTIONIST TACTICS In a bid to collect the judgment owed by Flanagan, Cadle served a writ of execution on him and Thompson & Peck in January 1998. In response to Fasano’s objection and statement to the court that Thompson & Peck held no property of Flanagan’s other than wages, Covello ordered Flanagan to submit to the court for in camera inspection documents pertaining to his assets. Covello also enjoined Flanagan from transferring his assets. A few weeks later, Covello ordered Flanagan to turn over his stock in Thompson & Peck and to provide an accounting of any disposition of the stock. According to Covello, Flanagan ignored the order, despite Fasano’s statement to the court a week later that they had thousands of documents that would be produced within the week. Flanagan also never furnished any documents to the court concerning his other assets. Frustrated by the obstruction, Covello ordered Flanagan imprisoned for contempt in November 1998. However, he stayed the order, and Flanagan came up with the full judgment a few days later. But between the writ of execution and the purge of contempt lay months of conspiracy by Flanagan, Fasano and Bainer to defraud Cadle, court papers allege. The alleged misconduct included fraudulently mischaracterizing proceeds that Flanagan received from Thompson & Peck in relation to a court settlement. Before the writ was served, the money had been treated as settlement proceeds. Nevertheless, Fasano and Bainer represented to the court that the money was wages and, therefore, was untouchable by the writ, according to evidence cited by Covello. Other evidence, the judge emphasized, showed that the attorneys knew they risked a civil conspiracy claim for their conduct. While the injunction freezing his client’s assets was in effect, Fasano allegedly advised Flanagan to set up checking accounts in the name of his minor children for purposes of collecting rent on his rental properties and to hide the money from Cadle. Fasano and Bainer also conspired to shield Flanagan’s Thompson & Peck stock, according to evidence cited by Covello in his memorandum. Soon after being served with the writ, Flanagan allegedly wrote to Fasano, telling him that he didn’t want Cadle “to grab this stock.” Although both Fasano and Bainer clearly knew of Covello’s injunction and turnover order, Bainer said in several meetings at which Fasano participated that Prymas and Flanagan needed to place a restrictive legend on the stock to protect it from Cadle, according to an affidavit by Flanagan. In August 1998, Flanagan turned over his stock to Bainer, who typed a restrictive legend on the stock certificates in order to limit their transferability and, in violation of the turnover order that applied to him as agent for Thompson & Peck, returned the certificates to Flanagan, Covello determined. Shortly thereafter, the judge wrote, Fasano misrepresented to the court more than once that Flanagan hadn’t made any transfers of stock or other assets after the injunction order. Cadle claimed it discovered the defendants’ alleged misconduct during discovery in Flanagan’s bankruptcy case, which he filed soon after Covello stayed his contempt order. Cadle claims Fasano filed for bankruptcy on behalf of his client to invalidate Flanagan’s judgment payment. Bainer’s notes from discussions he had with Fasano seemed to Covello to show that Fasano’s main concern about the bankruptcy filing was that Flanagan would face “a number of fraud claims against him.” Fasano claimed Cadle “brought [the RICO] action as a failed attempt to bully and retaliate against the principal defendant, Charles Flanagan,” and characterized the allegations as a “ludicrous” mischaracterization of protected legal advice. But Covello concluded that the civil RICO charge — often considered the ultimate weapon in litigation — was apt in this case and deserved to be put to a jury. There is a question of material fact, Covello held, over whether Fasano and Bainer “embraced” the alleged conspiracy to defraud Cadle and “agreed to commit at least two predicate acts” — the settlement proceeds scheme and the shifting-stock scheme — to further the conspiracy to commit fraud. Rejecting the defendants’ claim that Cadle can recover no damages because Flanagan paid the judgment in full, Covello agreed with Cadle that the legal fees it incurred in fighting the defendants’ fraudulent schemes can be RICO damages. Cadle is seeking over $1 million in damages, including fees incurred in prosecuting the RICO action, according to Cadle’s lead attorney, Edward C. Taiman Jr., of Hartford’s Sabia & Hartley.

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