Jurors Deliberate Hardwick's Fate in Embezzlement Trial
In closings, the government cast Hardwick as liar and a thief who knowingly stole money from Morris Hardwick Schneider's escrow accounts, while his lawyers said he was duped by the firm's former controller.
October 11, 2018 at 04:30 PM
5 minute read
A decision on whether Atlanta lawyer Nathan Hardwick IV knowingly embezzled $26 million from his now bankrupt residential real estate firm, Morris Hardwick Schneider—or took the funds thinking they were legitimately due to him as the firm's majority owner—is now in the hands of a 12-person federal jury.
Hardwick is charged with 23 counts of wire fraud, conspiracy to commit wire fraud and making false statements to lenders. Judge Eleanor Ross of U.S. District Court for the Northern District of Georgia is hearing the case.
Prosecutor Doug Gilfillan told the jury in his closing statement Thursday that the case is about what Hardwick told his fellow equity partners he was doing—and what he actually did instead. Hardwick is “telling you a different story now that is not supported by the evidence,” Gilfillan said, and “knowingly lied to his law partners” to cheat them.
Hardwick, MHS's 55-percent owner, ran the home closing side from Atlanta while brothers Mark and Gerard Wittstadt, with a 22.2 percent stake each, ran the foreclosure side from Baltimore.
Gilfillan addressed the defense's claim that Hardwick thought he was receiving the money from available cash in the firm's operating accounts and said that, to the contrary, MHS's equity partners were only supposed to get payouts from net income. “You guys did not check your common sense at the door,” he told the jury. “You can't run a business if you take 55 cents out of every dollar.”
Kristen Novay and Ed Garland of Garland, Samuel & Loeb do not dispute that Hardwick received $26 million from his law firm to fuel his lavish spending on gambling, expensive charter jet trips and women–but MHS's former controller, alleged co-conspirator Asha Maurya, is the one who stole from MHS, they told the jury, not their client. Maurya has admitted stealing $900,000 from the firm and has pleaded guilty to one charge of wire fraud conspiracy.
The government has extensively documented Hardwick's expenditures from MHS operating and escrow funds from 2011 to mid-2014, when millions in escrow shortfalls came to light. The firm's title insurer, Fidelity National Finance, in August 2014 stepped in and spent almost $30 million plugging the hole.
But Hardwick's lawyers have told the jury over 12 days of testimony that Maurya told him the firm could afford it and that she was disbursing it from available cash in the operating accounts.
“Nat Hardwick did not intend to cheat or steal from anybody,” Novay said in her closing statement, reminding the jury that Maurya has stolen from two other companies. “Asha Maurya was doing her own thing.”
The government did not call Maurya as a witness, and Novay spotlighted her absence. Hardwick's liberty hangs in the balance, she told the jury, and the government “did not produce its best piece of evidence.”
Hardwick “spent money that he thought was his own money,” Garland said in closing, and he didn't know it came from the escrow accounts. In fact, there actually weren't even any escrow shortfalls, Garland said, because MHS's 2014 tax return doesn't list a loss anywhere close to $30 million.
There is zero evidence of a conspiracy between Hardwick and Maurya, Garland said, just a few emails from Hardwick asking Maurya to disburse him funds. This case, he concluded, “is just some partners arguing over who got what,” adding that these arguments should be adjudicated in a civil court, not criminal.
The judge has restricted the lawyers from telling the jury about the numerous civil cases swirling in the background of the criminal one, including his ex-partners' suits against him and his counter-suits.
Casting the case as “just a dispute between partners,” Gilfillan retorted, “is disrespectful to the victims.” Saying Hardwick is Maurya's victim, the prosecutor said, when he took $26 million from the firm and she took $900,000, is not reasonable.
READ MORE:
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View AllGeorgia High Court Clarifies Time Limit for Lawyers' Breach-of-Contract Claims
6 minute readSoutheast Firm Leaders Predict Stability, Growth in Second Trump Administration
4 minute readKing & Spalding Adds Veteran Antitrust Litigator From White & Case in New York
3 minute readTrending Stories
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250