(J. Albert Diaz)
Blank Rome, Cozen O’Connor and global real estate firm Cushman & Wakefield claim they’re being targeted for their deep pockets because an incarcerated fraudster who bilked investors out of $27 million can’t pay up.
The firms filed motions for summary judgment on April 14 against the lawsuit lodged against them by British real estate tycoon Berish Berger and several investors. The plaintiffs claim the firms were part of a scheme orchestrated by Eliyahu Weinstein—who was convicted of fraud and sentenced to 22 years in prison for operating a massive Ponzi scheme that stole money from members of the Orthodox Jewish community under the guise of investing in Philadelphia real estate projects.
“After years of litigation, plaintiffs now sue three professional firms, including Cushman & Wakefield of Pennsylvania Inc. (‘C&W’), in a transparent attempt to reach into deeper pockets,” Cushman & Wakefield’s motion to dismiss said.
“But C&W played no role in Weinstein’s fraud and should not be deemed even a minor player in that over-arching story of fraud,” it continued.
Berger alleges that Cushman & Wakefield fraudulently appraised a property in Philadelphia called River City that stretches from John F. Kennedy Boulevard to the Schuylkill River. Cushman & Wakefield denied the allegations and claimed Weinstein was the source of the investors’ misfortune.
In the Orthodox Jewish community, Cushman & Wakefield’s court papers said, “Deals are often conducted without formalized agreements or the due diligence that would traditionally accompany a significant commercial transaction. Weinstein took advantage of these characteristics of the ultra-Othrodox Jewish community when defrauding Berger and dozens of other wealthy ultra-Orthodox investors.”
Jayne Risk of DLA Piper in Philadelphia represents Cushman & Wakefield and did not return a call seeking comment. Brett D. Dockwell of Morrison Cohen in New York represents the plaintiffs and did not return a call seeking comment.
The case was originally filed in New York federal court, but was moved to the U.S. District Court in the Eastern District of Pennsylvania in 2013 at Cozen O’Connor and Blank Rome’s request.
The investors claim Charles Naselsky, a disbarred lawyer who once worked at both Cozen O’Connor and Blank Rome, conspired with Philadelphia real estate developers to get the investors to put millions of dollars into a project that would be barred by zoning restrictions.
Naselsky is not a defendant in this suit and was sentenced to 70 months in prison for an unrelated tax evasion scheme.
In its summary judgment request, Blank Rome claimed that Naselsky did not knowingly or intentionally aid and abet fraud.
“Not only do plaintiffs have to prove that Naselsky acted knowingly in aiding and abetting the commission of a fraud, but they must establish that he substantially assisted in the commission of the alleged fraud. Once again, the record is devoid of any evidence, let alone clear and convincing evidence, that would support this element of plaintiffs’ aiding and abetting fraud claim against Blank Rome,” court papers said.
That argument was one of four Blank Rome made for summary judgment.
In Cozen O’Connor’s papers, the firm argued seven grounds for summary judgment and said the defendants were only “tangentially” involved in the real estate deal and the plaintiffs were going after the firms only because Weinstein is insolvent.
“Plaintiffs are clearly grasping for deep pockets to remediate the negative consequences of their poor investment decisions, and cynically have seized on an opportunity presented by the subsequent conviction of a former Cozen and Blank Rome attorney for wholly unrelated bad acts—of which Cozen itself was a victim,” Cozen O’Connor’s papers said.
John Harkins Jr. of Harkins Cunningham in Philadelphia represents Blank Rome.
“My hope is that Blank Rome will be granted summary judgment on one of the several grounds we’ve raised,” Harkins said.
William Harvey of Klehr Harrison Harvey Branzburg, the attorney for Cozen O’Connor, also did not return a call seeking comment.
Copyright The Legal Intelligencer. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.