Budd Larner Tech Officer Charged With Bilking Law Firm for Nearly $1M
Federal prosecutors claim Budd Larner's CTO created fake companies to file false invoices that the firm paid out, only to funnel the money to himself and a co-defendant through online payment processors.
February 28, 2019 at 12:00 PM
4 minute read
The original version of this story was published on New York Law Journal
The chief technology officer of New Jersey-based law firm Budd Larner has been accused of stealing nearly $1 million over the course of a number of years, according to documents filed in two interconnected suits in the U.S. District Court for the Southern District of New York.
An indictment brought by the U.S. Attorney's Office for the Southern District of New York that was unsealed in early February charged the Budd Larner CTO Rocco Romeo and a co-defendant, Jacqueline Galler, with four criminal counts, including wire fraud and money laundering-related charges.
According to the prosecutors, the unnamed New Jersey-based company had been defrauded by Romeo through a sophisticated system of falsified invoices, fake companies and conspicuous efforts to conceal the alleged scheme that cost the firm $900,000 over three years.
The scheme, prosecutors claim, started with Romeo receiving invoices generated by a company that went by several versions of the name Seventech. The invoices were routed through two online payment platforms, FreshBooks and PayPal, and sent directly to Romeo.
When asked by Budd Larner about the nature of the company, Romeo allegedly painted the company as a Silicon Valley tech firm with employees operating under a nondisclosure agreement with former employers. This, prosecutors say Romeo claimed, was why all communications need to go through him directly.
In fact, federal authorities claim, the company is a fiction used by Romeo and his co-defendant to bilk the firm for hundreds of thousands of dollars.
According to the now-unsealed complaint, a law enforcement officer reached out to the company located at the Midtown Manhattan address listed on the invoices sent through FreshBooks. When a representative for the company at that address was reached, the person told federal authorities he had worked in customer service for that company for five years and did not recognize the name Seventech or any of its permutations.
After the invoices were paid, the money moved into accounts that listed Galler as the owner. Authorities identified Galler—who also used the name “Star”—as a resident of Sugar Loaf in Orange County.
Jacqueline Galler's attorney, sole practitioner Benjamin Ostrer, confirmed a local artist in the community named Star Galler was in fact his client.
“We've communicated with the U.S. attorney's office. Ms. Galler intends to be cooperative. We believe that she's a victim,” Ostrer said.
Federal authorities claim Galler handled the allegedly illicit funds, either by transferring them into a corporate account created under a version of the Seventech name that were then withdrawn, or by transferring them either directly to a bank account owned by Romeo or, in the PayPal scenario, into Romeo's personal online account. Both defendants allegedly used funds to directly pay personal credit card bills.
Authorities claim the defendants “have had extensive personal dealings.” Prosecutors said the pair are both involved in a yarn business Galler owns in Monroe. The two would regularly communicate via cell phone calls, texts and picture messages, sometimes late into the evening. As recently as the morning of January, law enforcement claims to have seen Romeo, whose home is 20 minutes away in Washingtonville, departing Galler's residence in Sugar Loaf.
Court records filed by Romeo's attorney, Assistant Federal Defender Jason Ser, make reference to Romeo's wife.
While Budd Larner, based in Short Hills, is never mentioned in the criminal proceedings, a more recent civil filing in the Southern District by the law firm connects the two cases.
On Feb. 26, Budd Larner shareholder Philip Chronakis filed a civil RICO complaint against Romeo and Galler on behalf of the firm. While the complaint remains publicly inaccessible through the federal court's online filing system, an order to show cause sets a March 12 hearing date in the White Plains courthouse on the issue of enjoining Romeo and Galler from accessing accounts that may contain funds purloined from the firm.
U.S. District Judge Cathy Seibel issued a temporary restraining order against the defendants' accounts ahead of the hearing, ordering papers be filed from both sides in the coming weeks, including what additional actions the law firm may seek beyond the protective order.
Chronakis did not respond to requests for comment.
A spokesman for the U.S. attorney's office did not respond to a request for comment.
The criminal case is USA v. Romeo 19-mj-01009. The civil suit is Budd Larner v. Romeo 19-cv-01720.
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