Law Firms

Suit Blames Pryor Cashman for Failing to Prevent $42M Fund Embezzlement

A lawsuit blames the New York-based law firm Pryor Cashman for failing to provide legal advice that may have prevented the embezzlement of $42 million from union benefit funds by a woman who loved expensive horses and Neiman Marcus.

Trustees for three Construction Workers Local 147 funds allege the law firm should have recommended an audit and ensured proper bookkeeping in its role as counsel to the trustees and benefit funds, the New York Law Journal reports. They are seeking $42 million and punitive damages.

The suit (PDF posted by Courthouse News Service) says Pryor Cashman charged fees ranging from $607 to $768 an hour for its advice, earning nearly $176,917 in 2008, Courthouse News Service reports.

The administrator, Melissa King, had lavish tastes, the New York Times reported in January. She is accused of spending $3 million of embezzled money on “equestrian-related expenses,” $7.3 million for American Express bills, more than $700,000 for jewelry and more than $300,000 for purchases at Neiman Marcus.

The firm released this statement: “The fund trustees handed their apparently faithless administrator a rubber stamp, literally, so that they would not have to be bothered actually fulfilling their duties,” the firm said. “Unlike the trustees, Pryor Cashman had no role in nor responsibility for monitoring the activities of the administrator and acted solely and properly as counsel, performing only those limited duties it was requested to perform.”

We welcome your comments, but please adhere to our comment policy and the ABA Code of Conduct.

Commenting is not available in this channel entry.