As a new lawsuit claims, a $62 million New Jersey Ponzi scheme that had far-reaching repercussions for those who invested monies also involved fraud committed by lawyers. The fraud charges are just part of a wide net of corruption that has already led to some parties' guilty pleas and sentences. Thus, the new allegations are just another layer of the illegal financial structure that enabled a select few persons to become wealthy at the expense of unsuspecting investors.
Though the Ponzi scheme has many layers, the latest development involves a law firm that is reported to have been at the heart of monetary transactions. According to papers that have been filed, the law firm created an escrow account whereby one of the leading members of the Ponzi scheme initiative could deposit monies. The law firm would then issue a series of checks to other corporate entities, using the money that was supposed to be in escrow.
This process of moving money around in seemingly legal ways is frequently seen in Ponzi schemes. What is not always seen is the involvement of attorneys who have ostensibly pledged to protect and serve the public, not defraud investors. Consequently, the allegations against this New Jersey legal firm are making waves far beyond state boundaries as people become aware that malpractice by legal entities can and does occur.
While not all malpractice or fraud by legal representatives occurs at the million-dollar Ponzi scheme level, it does unfortunately occur. In this instance, the legal firm being sued has not issued any kind of formal statement for the press. It will ultimately be up to a court to decide the truth using all the facts at hand.
Source: therealdeal.com, Family of Ponzi schemer Gershon Barkany hit with suit, David Jones, March 20, 2014