News from the Legal Broadcast Network

Wahlstrom/Schlichtmann Commentary -- Alleged scheme by Scott Rothstein could top $1B

The LBN Team — Fri, 13 Nov 2009 17:40:10 +0000

(Associated Press) Investigators say the alleged fraud scheme run by a prominent South Florida lawyer is likely to exceed $1 billion and involve thousands of investors.

Miami FBI chief John Gilles (GILL-eez) said Thursday morning that investigators want investors with attorney Scott Rothstein to come forward. Rothstein is suspected of misappropriating millions through a legal settlement investment scam.

No criminal charges have been filed yet, but in a civil complaint, prosecutors accused Rothstein of concocting a Ponzi scheme that lured millions from investors. Gilles said the investigation is likely to take weeks or longer.

In a special edition of Voices of the Law, Mark Wahlstrom and Jan Schlichtmann discuss how this fraud has smeared the structured settlement industry by falsely implying that Rothstein was selling or manipulating structured settlements, when in fact it was a standard variety, but grand scale Ponzi scheme based on the cash now industry that is plaguing the legal profession.

Securities Fraud Lawyer Mark Tepper Dicusses Elderly Victims

The LBN Team — Fri, 13 Nov 2009 16:21:07 +0000

Securities Fraud Lawyer Mark Tepper, the attorney for the Carmels, is interviewed by Scott Drake.

(National Law Journal) Seniors are increasingly filing complaints against their brokers for conning them into bad investments, say securities fraud attorneys, Recent victims -- the Carmels of Florida -- an 82-year-old husband and 75-year-old wife who claim their Bank of America broker cozied up to them, gained their trust and then stuck them with a bad investment that cost them $1.425 million.

Their claim, filed Oct. 26 with the Financial Industry Regulatory Authority, the agency that handles broker complaints, says the broker visited their house as often as four times a week, made home repairs and played chess with them. Then the broker convinced them to buy high-risk investments -- without full disclosure -- in companies that had little or no previous operating history.

The couple claims that the broker took advantage of their trust and their age.Mark Tepper

The Carmels are also seeking to hold liable the broker's employer -- Banc of America Investment Services -- a subsidiary of Bank of America. Their complaint alleges that Banc of America Investment Services should have detected and prevented the broker's recommendations to invest in unregistered securities that were illiquid, had no recognizable market value and overexposed the seniors to risk.

"What offended me is I don't like to see elderly, vulnerable people allegedly being taken advantage of," said the couples' lawyer, Mark Tepper of the Fort Lauderdale, Fla.-based securities boutique firm Mark A. Tepper. He said his firm has seen a significant increase in calls from elderly investors in the last year.

$16.4 Million Jury Award Over 2003 Plane Crash And Lack Of Training

The LBN Team — Thu, 12 Nov 2009 17:08:29 +0000

Scott Drake interviews attorneys Dan O'Fallon and Phillip Sieff cousel for the family of the passenger James Kosak. Both are with the firm Robins, Kaplan, Miller & Ciresi in Minneapolis

A jury has awarded the families of two men killed when their Cirrus SR-22 crashed in Minnesota in January 2003 a total of $16.4 million in damages. The families of the men argued in their lawsuit that Cirrus Aircraft and the University of North Dakota provided training that should have made pilot Gary Prokop proficient in his plane and that the SR-22 was marketed as easy to fly.

But the pilot’s family said he wasn’t proficient in using the plane’s autopilot because Cirrus’ training program was lacking, and that if Prokop knew how to use the autopilot, the crash could have been prevented. The plane crashed after Prokop took off at dusk in marginal VFR conditions and then flew into instrument conditions, the National Transportation Safety Board said in its probable cause report. Prokop had 250 hours of total time, including 19 hours in the SR-22, with almost all of the rest of his flight time in a Cessna 172. While Prokop had 57 hours of instrument time, the transition training program he completed with Cirrus limited him to VFR flight in his new plane. Cirrus has not decided whether it will appeal the jury’s decision.

On Jan. 18, 2003, plaintiff’s decedent pilot Gary Prokop, 47, an entrepreneur, and plaintiff’s decedent passenger James Kosak, 51, who works in management, took flight from an airport in Grand Rapids at 6:30 a.m. during cloudy conditions. They were headed for St. Cloud to attend their sons’ hockey tournament. At about eight minutes into the flight, Prokop’s new Cirrus SR22 plane crashed outside of Hill City. They both died instantly.

Prokop was a VFR (visual flight rules), single engine-licensed pilot who had over 200 hours of flight experience — mostly in a Cessna 172 — and was studying for his IFR (instrument flight rule) license. An IFR-rated pilot, as opposed to a solely VFR-rated pilot, can use the plane’s instrumentation to assist in flying through visually impaired weather. Prokop had scheduled to take his IFR test prior to the crash. He purchased the plane about a month before the crash and underwent 3.5 days of training (not required by the Federal Aviation Administration) through the North Dakota Aerospace Foundation in Grand Forks. By the time he piloted the plane on the day of the crash, Prokop had about six hours of solo time in an SR22. Plane manufacturer Cirrus Design Corp. created the training program for the SR22 planes and it hired the University of North Dakota Aerospace foundation to train the pilots who purchased those planes.

WSJ Blog: The Anonymous Lawyer on Law Firm Bonuses

The LBN Team — Thu, 12 Nov 2009 12:19:49 +0000

Here is Anonymous Lawyer Jeremy Blachman's, end of year, bonus memo from the WSJ Law Blog .

LBN talked with Blachman a couple of months ago in the video below.

5 Facts About Veterans And How You Can Help

The LBN Team — Wed, 11 Nov 2009 15:01:29 +0000

(Huffington Post) Veteran's Day only happens once a year, but our nation's veterans need our support year-round. We've pulled together five facts about U.S. veterans, the great organizations that are supporting them and how you can help any time of the year.

Tax Lawyer Rob Wood "10 Ways To Audit Proof Your Tax Return"

The LBN Team — Tue, 10 Nov 2009 15:24:47 +0000

In a recent Forbes article, tax lawyer Rob Wood (Wood and Porter) discusses simple ways to avoid an IRS audit.

Read the article

Tax Law Channe l

Jan Schlichtmann "Chemical Delivery Set Up Danversport Blast"

The LBN Team — Mon, 09 Nov 2009 17:09:39 +0000

(Boston Globe) Danversport Trust lawyer Jan Schlitchmann says a Kentucky-based chemical company delivered a tanker of chemicals to an ink and paint factory, contributing to an inferno that destroyed or damaged nearly 100 homes and businesses.

Jan SchlichtmannSchlichtmann said a worker for Ashland Inc., based in Covington, Ky., also participated in filling up the 2,000-gallon mixing tank that overheated inside the CAI/Arnel factory, causing an explosion that nearly flattened the Danversport neighborhood.

“We believe this was part of a routine practice,’’ Schlichtmann said of the employee’s actions.

“That makes it particularly egregious. It was an explosion waiting to happen.’’

In a statement, Ashland said it bears no responsibility for the Nov. 22, 2006, explosion, one of the state’s worst industrial accidents.

Settlement Capital's Matt Bracy "Scott Rothstein Scheme Not About Structured Settlements"

The LBN Team — Fri, 06 Nov 2009 16:57:17 +0000

Matt Bracy, general counsel of Settlement Capital Corporation tells LBN's Scott Drake that the Scott Rothstein scheme isn't about structured settlements.

Sean Carter "Sex For World Series Tickets"

The LBN Team — Wed, 04 Nov 2009 23:28:27 +0000

How desperate was Susan Finkelstein to have World Series tickets?

VERY desperate, investigators say. So desperate, in fact, they say the 43-year-old suburban Philadelphia woman posted an ad on the Web site Craigslist in which she described herself as a "gorgeous, tall, buxom blonde diehard Phillies fan" desperately seeking Series tickets.

LBN Senior Correspondent Sean Carter says there is no basis for the charges.

Aviation Lawyer Charles Brewer Commentary On the Northwest Pilots

The LBN Team — Wed, 04 Nov 2009 17:24:35 +0000

The Federal Aviation Administration on Tuesday revoked the licenses of the two Northwest Airlines pilots who overshot their Minneapolis destination by 150 miles.

The pilots — Timothy Cheney of Gig Harbor, Wash., the captain, and Richard Cole of Salem, Ore., the first officer — told safety investigators they were working on their personal laptop computers and lost track of time and place.

The pilots, who were out of communications with air traffic controllers for 91 minutes, violated numerous federal safety regulations in the incident last Wednesday night, the FAA said in a statement. The violations included failing to comply with air traffic control instructions and clearances and operating carelessly and recklessly, the agency said.

"You engaged in conduct that put your passengers and your crew in serious jeopardy," FAA regional counsel Eddie Thomas said in a letter to Cheney. Northwest Flight 188 was not in communications with controllers or the airline dispatchers "while you were on a frolic of your own. ... This is a total dereliction and disregard for your duties."

A similar letter was sent to Cole.

The pilots said they were brought back to awareness when a flight attendant contacted them on the aircraft's intercom. By then, they were over Wisconsin at 37,000 feet. They turned the Airbus A320 with its 144 passengers around and landed safely in Minneapolis.Aviation Lawyer Charles Brewer

The revocations of the pilots' commercial licenses are effective immediately, FAA said.

The pilots have 10 days to appeal the emergency revocations to the National Transportation Safety Board. If that fails, they can apply for a new certificate after one year.

The pilots' union at Delta Air Lines, which acquired Northwest last year, had cautioned against a rush to judgment. The pilots told investigators who interviewed them on Sunday that they had no previous accidents or safety incidents.