Facing a $2 million clawback suit from the trustee in the Bernard Madoff Ponzi scheme case, investor James Greiff sought the advice of a Becker & Poliakoff attorney who specialized in asset protection.
On the advice of Miami attorney Richard Cahan, Greiff agreed to place all his assets in his wife's name, including $1.4 million in cash, a $3 million condominium, a $1 million beach condo, two plots of land valued at $1.4 million, an Aston Martin and a BMW.
Three months later, Greiff's wife filed for divorce. He claims the Becker special counsel abandoned him to represent his wife.
Greiff, who lives in the Florida Panhandle, is now taking aim at his former attorney. In a legal malpractice case filed June 20 against Cahan and his law firm in Miami-Dade Circuit Court, Greiff accuses the firm of gross negligence, conflict of interest and abandonment.
Fort Lauderdale-based Becker & Poliakoff denied the allegations.
"The action is meritless and the firm intends to defend it vigorously," the firm said in a statement to the Daily Business Review.
Cahan declined comment.
Among the questions raised by Greiff's attorney, Jeffrey Badgley of Badgley Law Group of Orlando, are when did Cahan start representing Greiff's wife, Lana Landis, did she know ahead of time she was going to divorce Greiff and why did the firm choose to stop representing Greiff?
"This is the crux of the case," Badgley said. "It's going to be the issue. Who was the firm representing all along, the wife or the husband?"
Greiff was an Atlanta entrepreneur married to a pin-up girl with the pseudonym Lana Landis when he invested $2 million with Madoff. He and his wife created a company called Aristabrat, which sold a line of Swarovski-encrusted pacifiers.
Greiff was one of a host of investors to be sued by Madoff trustee Irving Picard for fraudulent transfers. Represented by lawyers in the New York office of Becker & Poliakoff, Greiff led the investors in a counter-action to have the suit removed from bankruptcy court.
Badgley said it was through that suit that Greiff was referred to Cahan for advice on asset protection.
Cahan called Greiff and "introduced himself as an attorney who specialized in helping individuals protect their assets from the claims of creditors," the lawsuit stated.
Cahan explained his "post-nuptial agreement" strategy that involved transferring assets to a spouse and said he had implemented this strategy successfully for many clients.
Greiff had been married for six years, they had a child and he had no concerns about divorce.
Cahan demanded a retainer of $44,000, which Greiff paid with a credit card, states the complaint. At that point, Cahan said Greiff's wife also would have to enter into a retainer agreement.
"Believing that defendant Cahan was representing his best interests and advising him in the best means for protecting his assets as defendant Cahan had promised to do, plaintiff agreed to this arrangement," the complaint said.
On March 30, 2011, Grieff executed a post-nuptial agreement, conveying all of his assets — valued at $6 million — to his wife. He said he obtained all the assets before his marriage.
Three months later, Greiff's wife filed for divorce and sought to enforce the post-nuptial agreement. He sought to have the agreement rescinded and declared invalid as a sham.
In 2012, the divorce court entered an order enforcing the post-nuptial agreement.
Grieff also alleges his lawyer in the Madoff action has withdrawn, leaving him without legal representation.
Now penniless and living with his mother, Greiff has no money to hire a new attorney, Badgley said.
"If Becker & Poliakoff abandons plaintiff as a client in the New York adversary proceeding, plaintiff will be exposed to enormous liability for the damages sought by the trustee," the suit stated.
Bob Jarvis, a law professor at Nova Southeastern University, questioned the advice Becker & Poliakoff appears to have given its client.
"We tell our students all the time that you have to be very, very careful when you switch assets to a wife with litigation pending," he said. "It's a fraud on the court. It's a fraud on creditors. This is bad advice from day one."
However, Jarvis said he feels little sympathy for either Greiff or his ex-wife.
"We don't feel sorry for him," he said. "We do feel outrage on the wife for trying to turn this to her advantage, and we feel more outrage at the lawyer. If he was truly representing the wife, he should have said you need your own attorney. If these facts prove to be true, now you are no longer looking at just a malpractice suit. We are looking at some discipline from the Florida Supreme Court."
Jarvis also expects Picard to pursue the ex-wife's assets on behalf of the Madoff estate.