Three Attorneys Arrested for Alleged Tax Failures
A joint tax evasion probe by the state Department of Taxation and Finance and Nassau County District Attorney Kathleen Rice has resulted in criminal charges against three Long Island attorneys, an accountant and a doctor. Charged yesterday were lawyers David Mollon, 47, of Great Neck, Kelly Talcott, 50, of Sea Cliff, and Dennis O’Leary, 57, of Westbury.
Mr. Mollon, a partner in Winston & Strawn, was charged with third-degree criminal tax fraud and failure to file a personal income tax return for 2008. According to prosecutors, he failed to file state tax returns from 2006 to 2008, during which time he earned more than $1.79 million and failed to pay more than $117,000 in taxes.
Mr. Talcott, a partner in Edwards Angell Palmer & Dodge, was charged with third-degree criminal tax fraud and repeated failure to file personal income taxes. Prosecutors say he failed to file state tax returns from 2002 to 2005 and again in 2008. During that time he earned more than $2.68 million and failed to pay more than $111,000 in taxes.
Mr. O’Leary, a personal injury lawyer, was charged with repeated failure to file personal income taxes and fifth-degree criminal tax fraud for allegedly failing to pay more than $23,000 in taxes on $763,000 of income earned between 2004 and 2008.
Messrs. Mollon and Talcott face a maximum of seven years in prison, while Mr. O’Leary faces up to four years behind bars if convicted. Gerald Gartner, 53, an accountant from Lawrence, and Cedarhurst physician Avelino Rosales, 62, were also charged with failing to pay taxes.
Brad Maione, a spokesman for the tax department, said that for the past few months, the agency has been working with district attorneys’ offices around the state to target tax fraud, a probe spurred at least in part by the fiscal crisis.
In an interview, Mr. Maione said it is “no secret the state is facing financial difficulties” and investigators would be bolstering efforts to target tax evaders and bring complete cases to district attorneys for prosecution. In a statement, Ms. Rice said that her office would “work to ensure that every dime is repaid.” All the defendants pleaded not guilty and were released on their own recognizance. – Vesselin Mitev
Second Circuit Begins E-Filing
The U.S. Court of Appeals for the Second Circuit has converted to electronic filing, effective today. Information regarding the new case management system, CM/ECF, as well as the local rules pertaining to e-filing are posted at www.ca2.uscourts.gov.
Former Milbank Partner Joins Bingham McCutchen
Bingham McCutchen yesterday said it had hired a former CEO of a New York-based power company who before that founded the project finance practice at Milbank, Tweed, Hadley & McCloy. Jacob Worenklein, 61, was the founder and former chairman and CEO of U.S. Power Generating Co., where he resigned in 2008 after five years. Between his time at Milbank and the power company, he spent time as an investment banker at both Lehman Brothers and Société Générale.
In a statement, Bingham chairman Jay Zimmerman called Mr. Worenklein “the dean of energy and project finance.” At Bingham, Mr. Worenklein, who joins as a partner, said his “focus is going to be helping the firm serve some of the large, multinational power, energy and infrastructure companies.” Mr. Worenklein said he would work with clients in looking at opportunities spilling out of current market disruptions and changes in those industries.
The hiring follows other moves by Bingham McCutchen to expand into New York. In August, the firm acquired McKee Nelson, which housed half its 120 lawyers in Manhattan. – Nate Raymond
Mishcon Launches New York Office With Sheppard Trio
London-based Mishcon de Reya has opened a New York office with three partners from Sheppard Mullin Richter & Hampton. James J. McGuire, a founding partner of Sheppard Mullin’s New York office and a former partner at White & Case, is the managing partner of Mishcon’s new office. He is joined by partner Mark Berube and Sheppard associate Timothy McCarthy, who joins Mishcon de Reya as partner.
The move will give Mishcon its first office outside the United Kingdom in a bid to take advantage of a recent upturn in global fraud and regulatory work for the firm. The new office, which also includes several associates and staff members, officially opened yesterday. – Jeremy Hodges
Editor’s Note The preceding item has been modified to reflect a Correction.
Paul Hastings Moves to Dismiss Malpractice Suit
Paul, Hastings, Janofsky & Walker moved Friday to dismiss a $55 million malpractice suit brought by a unit of Cerberus Capital Management L.P. The litigation stems from a decision by Ableco Finance LLC, a financing unit of private equity giant Cerberus, to make a $125 million loan to a portfolio company of Bay Harbour Management set up to buy retailer Steve & Barry’s out of bankruptcy. But less than three months later, that portfolio company filed for bankruptcy.
Ableco, which said it thought the loan was backed by all of the Steve & Barry’s stores’ inventory, instead discovered the estate from the first bankruptcy claimed a right to half of it. The Cerberus unit blamed its Paul Hastings lawyers for not telling it about the estate’s claim. Ableco, which claims it lost $55 million due to the soured loan, sued the law firm in October and filed an amended complaint last month.
In its motion to dismiss, Paul Hastings said Ableco had brought the suit “in the hope of recovering business losses” resulting from “its own business decisions and the worldwide financial crisis.” Ableco knew the risks involved in making the loan when the economy was suffering and “cannot now blame Paul Hastings when that risk materialized,” according to the motion, filed by Paul Hastings’ lawyer, Paul Spagnoletti at Davis Polk & Wardwell. Citing documents and e-mails attached as exhibits, Paul Hastings also contended Ableco was “fully informed” that Bay Harbour did not acquire all of Steve & Barry’s inventory.
Spokespersons for Cerberus and its lawyer, Stuart Shapiro at Shapiro Forman Allen & Sava, did not respond to requests for comment. Ableco Finance LLC v. Hilson, 650618/2009, is before Manhattan Acting Supreme Court Justice Shirley Kornreich (See Profile). – Nate Raymond
$6.8 Million Default Judgment Entered in Insurance Case
A federal judge in Brooklyn has entered a $6.8 million default judgment against a Russian-Israeli accused of murdering his Brooklyn mistress for her life insurance. The tabloids dubbed defendant Eugene Perchikov the “perfect murderer” for allegedly using a “perfect” murder scheme he outlined in a short story to kill two women, Larysa Vasserman of Brooklyn and Tatiana Korkhova of Manhattan, and collect their insurance proceeds. Although Mr. Perchikov, who apparently fled to Israel, has not been charged with any crimes, he has been named in several civil lawsuits.
Last week, Eastern District Judge Nina Gershon granted a motion for default judgment filed by Ms. Vasserman’s estate, awarding it $1.6 million in insurance, $251,000 in wrongful death damages and $5 million in punitive damages. “Perchikov engaged in reprehensible, malicious conduct with both a purpose to injure and the desire to profit,” the judge wrote. “He targeted a woman who was especially vulnerable because of her inability to speak English and status as a recent immigrant. He not only helped her apply for life insurance, but also completed the forms for her, and, in doing so, supplied information he knew to be false.”
Jacques L. Debrot, who represents the administrator of Ms. Vasserman’s estate, said the judgment “is not [merely] symbolic, if we ever find” Mr. Perchikov, as he collected $1 million in insurance. John Hancock Life Insurance Company v. Perchikov, 04-cv-00098, appears on page 41. – Mark Fass
Shop Barred From Gun Sales After Arrest of Owner, Wife
A Pennsylvania firearms dealership that agreed to federal monitoring in order to settle a federal action filed by New York City has been barred from selling guns. The decision follows the arrest of the store’s owner for threatening his family and engaging in a standoff with the police, and the arrest of the owner’s wife for, in a separate incident, aggravated assault and kidnapping. The Gun Gallery is one of approximately 22 East Coast dealerships that agreed to federal monitoring to settle a legal action filed by the city, which alleged the dealers allowed “straw buyers” to make illegal purchases that led to the use of guns in city crimes.
Earlier this month, the Gallery’s owner, Jay Fisher, was arrested after holding his wife, Taryn, and their teen son hostage during a domestic dispute that allegedly began when their son fell asleep and allowed a half-gallon of ice cream to melt. Mr. Fisher also has been charged with threatening to kill a former employee, according to a local newspaper. Ms. Fisher has been charged with the December kidnapping of a man she suspected of stealing $100,000 and several firearms from her husband.
The Berks County sheriff revoked the shop’s license to sell arms and, last week, Special Master Andrew Weissman ordered the gallery to refrain from selling firearms. Assistant Corporation Counsel Eric Proshansky called the order “an abundance of caution,” which would make any subsequent contempt action easier to prosecute. – Mark Fass
Judge Allows Letterman Extortion Case to Proceed
Manhattan Supreme Court Justice Charles Solomon (See Profile) yesterday refused to throw out the criminal case against a TV producer who is accused of trying to blackmail David Letterman. The judge ruled against Robert “Joe” Halderman’s bid to get his attempted grand larceny case dismissed. Prosecutors say he demanded $2 million to keep quiet about the “Late Show” host’s affairs with staffers. Mr. Halderman says he was just offering Mr. Letterman a chance to buy—and keep private—a thinly veiled screenplay about his life.
Whether Mr. Halderman’s conduct was blackmail or business “is a classic example of an issue that is best left for a trial jury to decide,” the judge said. Mr. Halderman, 52, a producer for CBS’ “48 Hours Mystery,” could face up to 15 years in prison if convicted. He and his lawyer declined to comment outside court. His next court date is March 9. – Associated Press