NFL Star Says He Was Rolled for Millions

     LOS ANGELES (CN) - Attorneys for NFL star Dwight Freeney "willfully blinded themselves" to indications that Freeney's business partners were defrauding him of hundreds of thousands of dollars a month, the football player claims in court.
     Freeney and his company, Roof Group LLC, sued the Bayard P.A. law firm and attorney Stephen Brauerman in Federal Court, alleging breach of fiduciary duty, constructive fraud, civil conspiracy, aiding and abetting breach of fiduciary duty, professional negligence, and negligent infliction of emotional distress.
     Freeney, a linebacker for the San Diego Chargers, is a seven-time Pro Bowl selection.
     He claims in the lawsuit that the law firm's failure to recognize a scam by (nonparties) Eva Weinberg and Michael Stern cost him more than $1 million: "allowing, enabling and assisting Stern and Weinberg in continuing to carry out their scheme to defraud Mr. Freeney until their arrests by the FBI in March 2012."
     Freeney met Weinberg around February 2010 when she was working in private banking at Bank of America-owned Merrill Lynch, according to the 50-page lawsuit. Freeney says he agreed to let Weinberg manage his financial affairs, including his personal finances, real estate investments and business dealings involving his Hollywood restaurant, Rolling Stone L.A. (RSLA). Weinberg left the bank several months later, allegedly to better manage Freeney's finances.
     Weinberg introduced Freeney to her then-romantic partner, developer Michael Stern, but told Freeney his name was Michael Millar, according to the complaint. Weinberg falsely told Freeney that Stern was a wealthy businessman, had $30 million on deposit with Bank of America, owned a private jet, and was interested in investing $7 million in Freeney's restaurant, the complaint states.
     In fact, Stern was in bankruptcy, with declared liabilities in excess of $65 million, had a bank account balance of negative $23,000, did not own a private jet, and had no intentions of investing in Rolling Stone L.A., Freeney says in the complaint.
     Stern "was a notorious financial predator," whose intention was to take control of the restaurant, "use it as a vehicle for one of his schemes, and drain it of its value," according to the complaint.
     Stern formed Arm's Reach Consulting, a front company with no employees or assets, then assumed the role of Freeney's "protector, mentor and friend. Among other things, he promised to invest $7.0 million in RSLA; offered Mr. Freeney the use of his private jet; and volunteered to oversee the RSLA build out," Freeney claims.
     Meanwhile, Weinberg opened a bank account at Bank of America in the name of Freeney's company, Roof Group, and bank accounts in Freeney's name at a Citibank branch in Florida, according to the complaint.
     "Between June 2010 and October 2011 Weinberg and Stern transferred over $9.0 million of Mr. Freeney's money from the Citibank accounts into the BOA Roof Group account. Mr. Freeney was not aware of this extraordinary account activity; during most of this time period, he did not even know that the BOA Roof Group account was still active," according to the complaint.
     During that time, the pair wired $2.2 million in nearly 140 transactions from Freeney's Roof Group account to Stern's front company, the complaint states.
     "Stern and Weinberg relied on the spending activity associated with the RSLA restaurant as both a justification for the volume of spending activity in Mr. Freeney's bank accounts and a means of disguising the illicit transactions," Freeney says in the lawsuit.
     Weinberg failed to keep books or records for the restaurant, did not file tax returns for Roof Group, did not pay the restaurant's payroll taxes, and either paid the restaurant's bills late or not at all, Freeney says. Her claims she did this to hide the "inordinate spending" and hide incriminating evidence.
     Around April 2011, Salvatore Feli and Stacy Feli, who had been hired to manage and operate the restaurant, sued the Roof Group, Freeney, Weinberg, Stern and others, alleging breach of contract, after their agreement with Roof Group was terminated.
     The Felis claimed they had been defrauded because, during agreement negotiations to manage the restaurant, they were told that Stern - aka Millar - was a multi-millionaire willing to fund the development of the restaurant and its possible national expansion.
     "Weinberg and Stern, who had by then secretly married and were living together, learned about the allegations in the Feli litigation and realized that any investigation of the facts and circumstances giving rise to the Feli litigation and the allegations in the Felis complaint by competent and disinterested counsel would expose facts that would make it impossible for them to continue their fraudulent scheme while avoiding detection," Freeney says in his lawsuit.
     Weinberg then contacted Brauerman, who was representing Freeney in another matter, and asked him to represent all of the defendants in the Feli litigation, according to the complaint. Because Brauerman and the law firm already were representing Freeney, they owed him a fiduciary duty, but did not owe such duties to Weinberg, Stern or any of the other named defendants in the Feli case, Freeney says.
     In May 2011, Brauerman agreed to represent all of the Feli defendants and use Weinberg as a point of contact for the litigation, Freeney says. He claims that Brauerman communicated with Weinberg, rather than Freeney or any of the other defendants, throughout the case.
     In agreeing to jointly represent all of the Feli defendants, Brauerman missed at least two red flags, Freeney claims:
     First, that Brauerman would be representing consulting firm Krost Baumgarten, Kniss & Guerrero (KBKG) and its employees at Freeney's expense, even though the company had insurance coverage that would have paid for its defense;
     Second, a dispute arose between Weinberg and Freeney business associate Aaron West, who also was a defendant in the Feli case. Weinberg claimed that West was misappropriating money from Freeney and the restaurant, which West denied. This, in itself, was a conflict of interest between the defendants, Freeney says.
     Brauerman, a junior attorney at Bayard, failed to perform a meaningful investigation to determine whether joint representation was appropriate or whether it involved an impermissible conflict of interest, Freeney says in the complaint.
     Had he done so, Freeney claims, several facts would have become apparent:
     that Stern failed to invest $7 million into Roof Group as promised, leaving Freeney as the only source of financing for the restaurant;
     that Weinberg was in charge of the restaurant's finances but could not produce books and records;
     that Weinberg was not paying the restaurant's bills on time or at all, even though Freeney was pumping large sums of money into the restaurant;
     and that both Weinberg and Stern had recently set up companies with no employees or legitimate operations.
     In December 2011, Brauerman learned that Freeney and West were having Weinberg investigated for misappropriating Freeney's assets, according to the complaint.
     "In direct violation of his ethical duty to maintain client confidences, Brauerman disclosed to Weinberg that she was under investigation, potentially compromising a federal criminal investigation into a multimillion-dollar fraud," the complaint states.
     Brauerman continued to represent Freeney, Stern, Weinberg and the others in the Feli case even after learning in March 2012 that Stern and Weinberg had been arrested by the FBI on allegations of stealing millions of dollars from Freeney, according to the complaint.
     The next month, Freeney obtained separate counsel, as did West, Weinberg and the KBKG defendants. Brauerman's involvement in the Feli case came to a close when he was allowed to withdraw as Stern's attorney in October 2012, with the judge in the case finding that the interests of Stern and Freeney were adverse, according to the complaint.
     Because Brauerman and the law firm did not sufficiently investigate the case and "permitted the fraud to continue undiscovered for several months, Stern and Weinberg were able to embezzle and steal additional funds and cause additional losses to plaintiffs," Freeney claims. "The amount of money that Stern and Weinberg Stole after defendants agreed to jointly represent plaintiffs, Stern and Weinberg is over $1.0 million. The actual losses to plaintiffs are in fact much higher, because Stern and Weinberg used RSLA as the vehicle to conceal and execute the fraud, requiring the infusion of millions of dollars into, and resulting in the ruin of, RSLA."
     Stern pleaded guilty in January 2013 to a federal charge of access device fraud, admitting he defrauded Freeney of as much as $3 million, according to the complaint. He was sentenced to 5 years in prison and ordered to pay $2.6 million in restitution to Freeney.
     Weinberg pleaded guilty to accessory after the fact, admitting she had helped Stern conceal the theft, the complaint states. She was sentenced to 6 months in jail and ordered to pay $2.2 million in restitution.
     Freeney seeks compensatory and punitive damages.
     He is represented by Jerome H. Friedberg with Isaacs Friedberg.