MANHATTAN (CN) – Fortress Credit claims it lost $50 million to disbarred attorney Marc Dreier’s Ponzi scheme because of the “shocking recklessness, negligence and malpractice of the law firm Ruskin Moscou.” Fortress, which describes itself on its website as a “consumer advocate credit repair company,” claims the Ruskin Moscou Faltischek law firm gave it “utterly false legal opinion letters” that Dreier used in his “massive criminal Ponzi scheme.”
Fortress claims in New York County Court: “In clear and reckless violation of the recognized standards of professional duty, Ruskin Moscou issued the legal opinions without doing even the most basic diligence concerning the clients whom it purported to represent or the transaction on which it purported to opine.”
Before agreeing to loan $50 million to Solow Realty’s purported real estate investments, Delaware-based Fortress, says it requested a legal opinion from independent counsel to confirm Solow Realty’s participation in the transaction.
Fortress claims that Ruskin Moscou provided three legal opinions in which it lied about being Solow’s independent, “special transaction counsel.”
The opinions, which assured Fortress that the attorneys had verified and confirmed Solow Realty’s role in the loans, were actually “forgeries that were delivered by Dreier,” according to the complaint.
In fact, no one at the Ruskin Moscou “ever communicated with any officer, principal or employee of Solow Realty,” the complaint states.
“Ruskin Moscou … did absolutely nothing to confirm the truth of any of these assurances, other than rely on Dreier – the very party from whom it was supposed to be independent – and failed to confirm any of the facts underlying its legal opinions with anyone from Solow Realty,” according to the complaint.
“Instead, Ruskin Moscou simply acted as an ‘opinion mill’ for Dreier, providing him with on-demand legal opinion letters that helped propel and perpetuate his Ponzi scheme.”
Dreier, who was disbarred in New York, is serving 20 years for defrauding several hedge funds, including Fortress, of more than $700 million. Dreier pleaded guilty in 2009.
Fortress Credit and Fortress Credit Opportunities demand compensatory and punitive damages from Ruskin Moscou Faltischek, alleging fraud, negligent misrepresentation, legal malpractice, negligence and breach of fiduciary duty. Fortress is represented by Marc Kasowitz with Kasowitz, Benson, Torres & Friedman.