Suit Claims Ex-Ruden McClosky Lawyer Diverted $1.1M from Alzheimer’s Group
Updated: An Alzheimer’s group in Florida has filed a lawsuit that alleges a former lawyer at Ruden McClosky diverted $1.1 million of the group’s money to help prop up an investment fund controlled by a principal in the law firm’s investment subsidiary.
The suit was filed this month in Palm Beach County Circuit Court by the Southeast Florida chapter of the Alzheimer’s Disease and Related Disorders Association. It targets the organization’s former chairman, Patrick Moran, who was a lawyer at Ruden McClosky at the time of the alleged misappropriation, the Palm Beach Post reports.
The Alzheimer’s association alleges Moran and his wife, Valerie, used their check writing powers in 2005 to divert the money, part of the proceeds from the nonprofit’s $4.5 million sale of an adult day-care center, the story says. The suit claims the Morans put the money in an investment fund controlled by Bruce Bernstein, a principal of the law firm’s financial arm. Later part of the money was allegedly diverted to a website, gogoddess.com, founded by Moran’s daughter.
The investment fund needed the money because it faced a 2005 deadline to raise $2 million, according to the suit. Moran and Bernstein later told the board of the Alzheimer’s group that it should invest in the fund, citing the recent $1.1 million cash infusion. They didn’t mention the cash came from the group’s money, the suit contends.
A 2003 press release described the finance arm, Ruden McClosky Capital Partners, as a law firm subsidiary that helps companies find financing. The press release said RMCP was expanding its focus to include mezzanine financings, distressed asset acquisitions, bridge loan financings and development and operating capital fundings.
Ruden McClosky gave the ABA Journal this statement about the lawsuit: “Pat Moran has not been employed by or affiliated with Ruden McClosky since January 2007. Bruce Bernstein has never been employed by the firm and has not been affiliated with RMCP for over three years.
“We were made aware of the allegations of the complaint for the first time this past Friday. We want to make it clear that the firm had no role in forming, operating or soliciting for the fund mentioned in the complaint, and we will respond accordingly.”
Hat tip to the American Lawyer.
Updated at 10:15 a.m. to include the statement from Ruden McClosky and to reflect that the second principal was employed by the law firm’s investment subsidiary.
