- Investors Sue Cozen and Blank Rome, Say Ex-Partner Conspired to ‘Dupe’ Them in $27M Real Estate Deal
Investors Sue Cozen and Blank Rome, Say Ex-Partner Conspired to ‘Dupe’ Them in $27M Real Estate Deal
Posted Dec 20, 2012 12:01 PM CDT
By Martha Neil
A group of investors is suing Cozen O'Connor and Blank Rome, contending that a former partner of both law firms conspired with a landlord and his business partner to "dupe" them concerning the value of a real estate development project.
The former partner, Charles Naselsky, is currently serving federal time for unrelated tax evasion, obstruction of justice and wire fraud, the suit notes. It was filed Tuesday in federal court in Manhattan and asserts claims for conspiracy to defraud and aiding and abetting fraud, alleging that the plaintiffs were defrauded of at least $27 million through false advertising and misrepresentations about a planned River City mixed-used commercial development in Philadelphia that was to include multiple skyscrapers, reports Reuters.
As Naselsky's emails to those involved in developing the project proved he knew, a pending city ordinance was going to make it difficult or impossible for the project to proceed as planned by imposing a 125-foot height limitation on new construction, the suit contends.It also alleges that investors were misled about what developers paid for the River City site, through a "sham contract" that showed a $50 million purchase price rather than the $32.5 million they actually paid in 2006.
The investors, led by Berish Berger, won a $34 million judgment in an earlier federal lawsuit against promoters of the River City development, but it didn't name Naselsky as a defendant.
In a written statement provided to Reuters, Blank Rome "denies any fraud on the part of the firm" and said it intends to defend the suit vigorously. Cozen O'Connor didn't respond to a request for comment from the news agency.
Naselsky was disbarred by consent last month in a brief Pennsylvania Supreme Court order (PDF).
His disbarment was also noted by a Legal Profession Blog post, which provides further details about the earlier tax evasion case. It involved legal bills owed to Cozen O'Connor that Naselsky told clients to pay directly to him.
ABAJournal.com: "Lawyer Indicted, Accused of Diverting $380K in Law Firm Fees"
ABAJournal.com: "Ex-Cozen Lawyer Accused of Diverting Law Firm Fees Is Sentenced for Tax Evasion"