Robert Shapiro of Woodbridge Realty of Colorado. Courtesy photo

Sidley Austin is fighting claims that the law firm helped perpetuate the $1.3 billion Woodbridge Ponzi scheme, which had deep roots in South Florida.

A $500 million lawsuit filed on behalf of the receiver, Akerman's Michael Goldberg, alleges Sidley and Washington partner Neal Sullivan were "heavily involved" in the legal matters of Woodbridge Group of Cos., which was led by California executive and imprisoned mastermind Robert Shapiro. Other law firms and more than a dozen attorneys were named in the complaint.

"We believe the claims asserted against the firm and Mr. Sullivan are without merit, and we intend to defend the case vigorously," a spokesman for Sidley said Tuesday. Sullivan is the global leader of Sidley's regulatory and enforcement practice.

Shapiro pleaded guilty to mail and wire fraud conspiracy and income tax evasion and was sentenced in October by U.S. District Judge Cecilia Altonaga in Miami to 25 years in prison.

He promised investors would profit by putting their money into his low-risk, high-interest loans that were issued on real estate owned by third parties. But the real estate either didn't exist or was secretly owned by Shapiro, who siphoned off millions of dollars for catered parties, chartered aircraft, limousines, luxury cars and hotel stays.

Law firms like Sidley prepared documents that extended the fraud, according to the lawsuit filed by Goldberg, Fort Lauderdale-based chairman of Akerman's fraud and recovery practice and the Woodbridge Liquidation Trust receiver.

"The law firms and attorneys that are defendants in this complaint aided and abetted numerous securities violations and fraudulent acts," Goldberg's lawyers wrote in the complaint filed Tuesday in Los Angeles Superior Court. "Some drafted offering documents replete with false statements that they knew were false. Some prepared negligent legal opinion memorandums to be shared with investors. Some assisted Shapiro in concealing his fraud."

In 2015, Sidley allegedly prepared a legal opinion that Woodbridge then used to assure people their investments in the company were legally sound. Goldberg alleged Sidley knew or should have known that its conclusions were heavily contested by state regulators who were probing whether Woodbridge was a Ponzi scheme.

Tthe other law firms named as defendants in Goldberg's 262-page, 62-claim lawsuit include Davis Graham & Stubbs; Halloran & Sage; Balcomb & Green; Rome McGuigan; Bailey Cavalieri; Robinson & Cole; Finn Dixon & Herling; and Haight Brown & Bonesteel, along with lawyers at those firms. Those other firms and lawyers did not respond to requests for comment by deadline.

"We're trying to pick up the pieces for these people and help them recover their massive — and tragic— losses," Louis Miller, a partner at Miller Barondess who is representing Goldberg, said in a statement. "We look forward to facing the defendants in a court of law and holding them responsible for the devastating losses they helped cause."

Woodbridge was founded in Boca Raton, which remained a sales hub for the company after the headquarters moved to the Los Angeles suburb of Sherman Oaks. Shapiro owned property in Palm Beach County and was registered to vote in Florida.

Woodbridge, which collapsed into bankruptcy in December 2017,  was one of the biggest Ponzi schemes ever charged in Florida. The Securities and Exchange Commission charged more than 275 limited liability companies under the Woodbridge umbrella were used to defraud more than 8,400 investors, including 2,600 people who invested $400 million in retirement savings.

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