Sidley Vows to Fight Claims It Aided $1.3B Ponzi Scheme
"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.
December 03, 2019 at 06:42 PM
3 minute read
The original version of this story was published on The American Lawyer
Robert Shapiro of Woodbridge Realty of Colorado. Courtesy photo
Sidley Austin on Tuesday vowed to fight claims that it, along with 18 other lawyers and law firms, helped to perpetuate a $1.3 billion Ponzi scheme that swindled money out of thousands of investors.
According to a $500 million lawsuit filed by the receiver who is representing the investors, Sidley and one of its attorneys, Neal Sullivan, were "heavily involved" in the legal matters of Woodbridge Group of Cos., which was led by California executive and incarcerated mastermind Robert Shapiro.
"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. Sullivan is a Washington, D.C., partner and 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 to 25 years in prison in October.
Shapiro promised investors they would profit from placing money in low-risk, high-interest loans that were issued on real estate owned by third parties. But that real estate either didn't exist or was secretly owned by Shapiro. Shapiro also siphoned off millions of dollars for his personal use.
Law firms like Sidley, according to the lawsuit filed by Michael Goldberg, an Akerman partner who is the receiver of the Woodbridge Liquidation Trust, allegedly helped perpetuate Shapiro's Ponzi scheme by preparing documents that continued the fraud.
"The law firms and attorneys that are defendants in this complaint aided and abetted numerous securities violations and fraudulent acts," wrote Goldberg's lawyers in the complaint filed Tuesday in the U.S. District Court for the Central District of California. "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 one instance 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 that Sidley knew or should have known that its conclusions in that opinion were heavily contested by state regulators who were probing whether Woodbridge was a Ponzi scheme.
Apart from Sidley, the other law firms who were named 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 as of press time.
"We're trying to pick up the pieces for these people and help them recover their massive—and tragic—losses," said Louis Miller, a partner at Miller Barondess who is representing Goldberg, 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."
Read More
CEO Sentenced to 25 Years for Leading $1.3 Billion Real Estate Ponzi Scheme
California's Robert Shapiro Pleads Guilty in $1.3 Billion Real Estate Ponzi Scheme
Woodbridge Group Slapped With $1 Billion Penalty for Ponzi Scheme
Boca Raton-Based Woodbridge Marketers Face SEC Charges
SEC Claims Florida-Based Woodbridge Group Ran $1.2B Ponzi Scheme
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
© 2025 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 All
2024 Marked Growth On Top of Growth for Law Firm Litigation Practices. Is a Cooldown in the Offing for 2025?
Big Company Insiders See Technology-Related Disputes Teed Up for 2025
Litigation Leaders: Jason Leckerman of Ballard Spahr on Growing the Department by a Third Via Merger with Lane Powell
Law Firms Mentioned
Trending Stories
- 1SurePoint Acquires Legal Practice Management Company ZenCase
- 2Day Pitney Announces Partner Elevations
- 3The New Rules of AI: Part 2—Designing and Implementing Governance Programs
- 4Plaintiffs Attorneys Awarded $113K on $1 Judgment in Noise Ordinance Dispute
- 5As Litigation Finance Industry Matures, Links With Insurance Tighten
Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
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
