LOS ANGELES (CN) - Attorneys Mark Geragos and Brian Kabateck claim they were "swindled into paying legal fees" when they hired Mark Dreier and his legal firm "to assist them in various corporate matters in 2008," before they were aware of Dreier's $400 million investment fraud.
Dreier, now disbarred, pleaded guilty to conspiracy and fraud in 2009 and is serving a 20-year prison sentence.
"Unfortunately," Geragos and Kabateck say, "plaintiffs were unaware of Dreier's multimillion dollar fraud crimes when they retained the Dreier Firm to assist them in various corporate matters in 2008. As such, plaintiffs were swindled into paying legal fees to an entity and individual who shattered the attorney/client relationship and used the payments for illegal purposes."
Geragos and Kabateck say in their Superior Court complaint that "Dreier used the Dreier Firm to obtain funds in an effort to facilitate his investment fraud and money laundering operations. Plaintiffs are further informed and believe and thereon allege that their legal fees were overbilled and increased by Dreier with the intent of using the extra fees for the fraud scheme.
They sued Dreier as an individual, Dreier Stein Kahan Browne Woods George LLP, and Dreier LLP, seeking de novo review of an arbitration award, declaratory relief and damages for breach of contract.
The defendants billed $158,652 in legal services, and at a nonbinding arbitration in October this year demanded $55,544 in unpaid balance, according to the complaint.
Geragos and Kabateck say "that the arbitrator erroneously determined that the Dreier Firm was entitled to $55,543.99 and that no evidence was presented that any portion of the services were unreasonable or unnecessary."
Geragos and Kabateck disagree; they say "that the award of the arbitrator was erroneous respects." They want the matter tried, de novo, before a jury.
They are represented by Hagop Kuyumjian with Geragos & Geragos.
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