By Dan Christensen, BrowardBulldog.org
A large Florida law firm whose founding partner was suspended by the Florida Supreme Court last month for betraying clients faces more trouble from a state lawsuit alleging that its top partner in Fort Lauderdale aided a stock swindle.
Former senior White House staff member Major General Bruce M. Lawlor is among a trio of plaintiffs who claim to have lost millions in profits due to misconduct by Yoss LLP and its Broward managing partner, Jan D. Atlas. Atlas, while named in the suit, is not a defendant.
Former Bush administration Attorney General John Ashcroft and Homeland Security secretary Tom Ridge are among a number of former government and military leaders who will be called to testify “as to the scope and nature of the damages,” according to court papers.
Another is President Clinton’s Supreme Allied Commander for NATO, retired General George A. Joulwan.
The civil trial in Palm Beach Circuit Court is to start during a six-week period beginning Feb. 14.
Yoss LLP was known as Adorno & Yoss when it was named last year as the lead defendant in a malicious prosecution and conspiracy lawsuit brought by Lawlor, CRA Inc., a Virginia homeland security consulting firm Lawlor chairs, and Laidlaw & Co., a New York boutique investment banking firm.
The 215-attorney firm with a large presence in South Florida adopted its new name on Nov. 1 following the high court’s decision to suspend firm boss Hank Adorno’s license. The justices acted after Broward Circuit Judge Jack Tuter, acting as a bar referee, found Adorno guilty of rules violations involving his alleged sell-out of Miami taxpayers he represented during the 2004 settlement of a class action involving the city’s controversial fire rescue fee.
The pending suit against Yoss stems from four lawsuits Atlas filed against Lawlor, CRA and Laidlaw in 2005. The suits alleged they had schemed to defraud and misappropriate assets from Secure Solutions Holdings Inc., a now defunct penny stock that traded on the Pink Sheets under the symbol SSLX.
Lawlor and another ex-general, Michael Davidson, had been part of a group that had agreed to buy SSLX as a shell company for a homeland security firm they were forming. Davidson previously settled his claim.
The suits that Atlas filed were later dismissed, and it turned out that SSLX stock was actually at the heart of a multimillion-dollar pump and dump scheme run by three of Atlas’s clients.
Lawlor and the others sued Adorno & Yoss, claiming that Atlas and his clients had trumped up the litigation to deflect attention away from the actual scam.
Miami attorney James Kaplan, who represents the Yoss firm, denies the accusation.
“The bottom line is that a lawyer has a right to rely on what his clients tell him and that’s all that was done here,” said Kaplan. “We expect Adorno & Yoss to be completely exonerated.”
Lawlor and Laidlaw lawyers Carl Schoeppl of Boca Raton and Richard Cushing of New York City declined comment.
Former Atlas clients Douglas Zemsky of Hallandale Beach and Paul Harary of Boca Raton are both in federal prison today for their roles in the SSLX trading scam. A third client, Lighthouse Point stockbroker Anthony Fareri, pleaded guilty to a related mail fraud charge in September and is cooperating with authorities in hopes of mitigating a possible 20-year prison sentence.
Court records identify Zemsky and Harary as investors who supplied millions of shares of nearly valueless SSLX stock to facilitate the scheme. Fareri’s role was to unload those shares on his unsuspecting elderly clients.
The trio ran SSLX stock up to $9 a share before the SEC halted trading and began an investigation in 2005.
Atlas filed the four lawsuits on behalf of Zemsky, Harary and Fareri’s company, Amerifinancial, as the SEC began to close in.
“At a minimum, Adorno & Yoss was grossly negligent and failed to conduct a reasonable investigation of the facts prior to commencing the lawsuits,” the complaint says.
Among other things, the complaint says, an investigation would have revealed that Harary and Zemsky were under investigation for market manipulation and had made “substantial trading profits” in SSLX stock during a time they were claiming to be victims.
Lawlor’s suit also names as defendants Harary, his wife Paris McKinzie and mother-in-law Maria Caporicci. Zemsky, his wife Cathy Pafumi and Fareri settled. All were plaintiffs against Lawlor in the cases Atlas filed.
Another defendant is Arnstein & Lehr, a Chicago law firm with an office in Fort Lauderdale. Arnstein took over the case when Atlas withdrew in November 2006. The suit alleges that it, too, was grossly negligent.
Arnstein withdrew one year later when news of the federal civil and criminal actions against Zemsky and Harary was made public.