HOUSTON (CN) – Tadano America, a major crane manufacturer, claims in court that its attorney stole more than $8 million from it by billing it for the work of fictitious law firms.
In its complaint in Harris County Court, Tadano America Corp. says it hired Anthony Chiofalo in January 2009 as its head of legal affairs and human resources, with an annual salary of $110,000.
It claims that Chiofalo “was never licensed to practice law in Texas,” did not inform it when his New York law license was suspended in October 2010.
“Near the time of Chiofalo’s suspension, Chiofalo began making numerous unauthorized transfers of funds from TAC’s accounts to fictitious entities and accounts under Chiofalo’s direction and control,” according to the complaint. “Chiofalo tested his scheme in November 2010.
“Chiofalo created a Texas law firm named ‘Seidner & Virdone LLP.’ (‘Seidner’) The firm executed an ‘engagement letter’ and requested a $25,000 retainer be mailed to its business address” in Houston, the complaint states. (Parentheses in complaint.)
Tadano says it mailed the check to Seidner & Verdone, and the money was deposited into Chiofalo’s Citibank account.
But Chiofalo was just getting started, Tadano says. It claims he created another fictitious law firm, “Maio & Cardenas LLC,” with himself as its sole managing member and agent.
Tadano claims that Chiofalo billed it, and it paid, more than $6 million “purportedly for legal services” Maio provided.
“In March 2012, TAC’s Board requested an investigation into the details of TAC’s escalating litigation expenses,” the complaint states. “Chiofalo was asked to provide documents detailing the reason behind TAC’s million of dollars in legal fees.
“While the total amount of legal fees was exorbitant, the legal fees paid to ‘Maio’ were of particular concern.
“In response to TAC’s demand for documentation of legal services, Chiofalo fashioned additional phony documents purporting to validate that ‘Maio’ is an actual firm.”
It claims that “Chiofalo’s spreadsheets and invoices show that from January 1, 2010, to the present, Chiofalo deceives TAC into sending checks payable to fictitious law firms, which Chiofalo then deposited those funds into accounts that he owned and/or controlled. …
“In total, Chiofalo created false invoices and directed TAC and its employees to transmit in excess of $8 million from TAC’s corporate bank account, which ultimately went to Chiofalo for legal services and expenses that were never provided.”
Tadano seeks damages for theft, conversion, fraud, and breach of fiduciary duty.
It adds: “Chiofalo has a history, when he is party to a suit, of extremely disturbing conduct that supports the need for emergency relief. Chiofalo has destroyed evidence, threatened opposing parties and the counsel.”
Tadano seeks a temporary restraining order to stop Chiofalo from withdrawing or transferring funds, and selling or moving any assets.
Tadano is represented by Philip Hilder of Houston.