An investor group’s federal lawsuit against Blank Rome, Cozen O’Connor and Cushman & Wakefield won’t be stopped by Pennsylvania’s statute of limitations, but claims brought by three of the plaintiffs, including British real estate tycoon Berish Berger, have been thrown out.
The investors alleged that 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.
In their motion to dismiss, the defendant firms alleged that the investors were only targeting them because they could not recover damages from Weinstein.
In an opinion posted Aug. 18, U.S. District Senior Judge Jan DuBois of the Eastern District of Pennsylvania rejected the defendants’ argument that Pennsylvania’s two-year statute of limitations on fraud claims should apply. Because the action was initiated in New York, that state’s statute of limitations should apply, the opinion said.
But three of the plaintiffs—Berger, Ardenlink Ltd. and Towerstates Ltd.—have been terminated from the case. DuBois granted summary judgment with regard to those three plaintiffs because they did not own any of the funds at issue in the case.
Berger has alleged 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.
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.
The case was originally filed in New York federal court, but was moved to the U.S. District Court for the Eastern District of Pennsylvania in 2013 at Cozen O’Connor and Blank Rome’s request. Naselsky is not a defendant in the suit, and was sentenced to 70 months in prison for an unrelated tax evasion scheme.
Jayne Risk of DLA Piper in Philadelphia represents Cushman & Wakefield. She did not return a call seeking comment. Brett D. Dockwell of Morrison Cohen in New York, who represents the plaintiffs, was not immediately available to comment.
William Harvey of Klehr Harrison Harvey Branzburg, who represents Cozen O’Connor, also did not return a call seeking comment.
John Harkins Jr. of Harkins Cunningham in Philadelphia represents Blank Rome, and deferred to Blank Rome’s William Roberts for comment. Roberts said the firm does not comment on pending litigation.