Investors Claims Law Firm Aided African Inheritance Boondoggle
CLEVELAND (CN) - Investors claim a law firm helped a woman bilk them for more than $1 million in an African boondoggle that promised them a $14.5 million inheritance from Burkina Faso - if they paid certain "fees" first. Nine people and two corporations say they handed over the money because two attorneys in the Cleveland branch of Baker & Hostetler backed up Willia Burton's story about the inheritance.
Burton, the law office and its attorneys Paul Feinberg and William Culbertson are named as defendants in the Court of Common Pleas.
The 600-lawyer Baker Hostetler firm's declined comment, other than to say, "As the subject of ongoing litigation, will we not discuss this matter beyond stating that five years ago our attorneys were deceived by criminal and fraudulent activity."
In their civil action, the plaintiffs allege, "The scam revolved around a purported entitlement of Burton to a $14,500,000 inheritance from her father, who resided in the African country of Burkina Faso," an inland nation south of Mali.
The plaintiffs say that in February 2005 Burton sought money to pay "legal, administrative and other fees and costs" to have the purported inheritance released.
Burton claimed she had an attorney in Burkina Faso recommended by Baker, and that she had worked at Baker for 15 years, according to the complaint.
The plaintiffs claim that the law firm and Feinberg and Culbertson "knew or should have known that the inheritance scheme was in fact a scam," but "participated with Burton in the scam, provided substantial assistance to Burton in the scam, and received financial benefits for its work, participation and assistance."
The plaintiffs say they received promissory notes for their money, but that the notes were "unregistered securities and issued in violation of Ohio securities laws ..."
They say they were promised "a huge return" within two weeks, but Burton told them that a "West African Monetary Agency" stopped the release of her inheritance based on "new terms," and that she needed more money to secure an insurance bond and pay taxes, but even after that, investors still did not see any money.
Plaintiff Fred Proctor III of Cumming, Ga., says that in June 2005 he went to Cleveland to speak with the attorneys, who confirmed that the inheritance and the "investment to release the inheritance funds were valid and legitimate."
Proctor claims that the meeting seemed legitimate, particularly because "at the law firm's office in Cleveland, Ohio, defendant Culbertson and/or another law firm attorney met defendant Burton and Fred Proctor III in the waiting room and escorted them to a law firm conference room."
Proctor claims that "Defendants Culbertson stated that defendant Feinberg was on vacation, but that he was authorized to act on Mr. Feinberg's behalf in the representation of defendant Burton," according to the complaint.
He says he insisted on talking to Feinberg by telephone, and Feinberg backed up Culbertson's story.
Burton, Feinberg and Culbertson promised that "in addition to $500,000 provided to [plaintiff] Family Home Providers, they would provide an additional $500,000 consulting fee to each of plaintiffs, Fred Proctor Jr. and Fred Proctor III," according to the complaint.
The law firm, through its attorneys, also "stated that the law firm would and, in fact, did draft and supply the promissory notes for the investment program," the complaint states. It adds that Culbertson told Proctor that he "couldn't believe this deal" and said, "If I had the money, I would do the same as you."
Only after that meeting did Proctor and Home Family Partners agree to fork over some money, according to the complaint.
The investors say they lost more than $1 million. Fred Proctor III says he was fired from his job as an officer at Family Home Providers because he involved the company in the sham investment.
The plaintiffs demand damages for securities fraud, fraudulent and negligent misrepresentation, aiding and abetting tortious conduct and civil conspiracy.
Lead counsel is Joel Levin with Levin & Associates Co.