Finally, Someone Who Doesn't Have To Pay Back Ponzi Scheme Money

money cash grab dollars clawback fight

Lately, it seems like just about anyone can be sued to reclaim money lost in a Ponzi scheme.

The Madoff trustee is going after the fraudster’s family; Madoff victims’ lawyers may go after JPMorgan and other big banks; and prosecutors in the Brooklyn “mini-Madoff” case are seeking claw-backs from unwitting investors.

Now, a case shows there are limits.

NJ Law Journal: Before Bernard Madoff, there was Reed Slatkin, a California investor to the stars, who bilked hundreds of clients out of more than $200 million using a Ponzi-type scheme.

A New Jersey appeals court ruled Tuesday that one of Slatkin’s victims cannot pursue a malpractice claim against his law firm, Bryan Cave, which allegedly helped him conceal the fraud during an SEC investigation.

The Appellate Division, in Azeez v. Bryan Cave , A-5848, said the Atlantic County judge who dismissed the suit did not err in applying the doctrine of forum non conveniens, based in part on his view that a New Jersey fact-finder should not decide whether Bryan Cave conformed to ethics rules in California, where it represented Slatkin.

As the article notes, Plaintiff Michael Azeez sued Bryan Cave to recover $9 million he invested with Slatkin and another $7 million on behalf of his father’s estate. Azeez and his family lost millions more, but the $16 million sought was the amount invested during the time lawyers at Bryan Cave allegedly helped Slatkin avoid detection of his fraudulent scheme in 2001.

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