Lawyer pleads guilty to defrauding investors in fundraising scheme
- DOJ, SEC accuse New York lawyer of lying to investors
(Reuters) – A New York lawyer pleaded guilty on Tuesday to defrauding investors in his now bankrupt litigation finance company.
The United States Attorney’s Office in Manhattan said attorney Jaeson Birnbaum had “deceived” investors in his company Cash4Cases Inc by convincing them that the money they had invested would be loaned to tort litigants. Investors were informed that they could then claim a percentage of the money granted to litigants.
U.S. District Judge Paul Crotty is due to sentence him on January 6. Under a plea deal, Birnbaum agreed to pay more than $ 2.66 million. He also agreed not to appeal a prison sentence of 51 months or less.
Birnbaum’s conduct, which occurred from approximately 2017 to 2019, is also the subject of a related civil lawsuit filed Tuesday by the United States Securities and Exchange Commission in federal court in New York.
The SEC did not immediately respond to a request for comment. Neither Birnbaum nor his lawyer, Sam Braverman of Fasulo Braverman & Di Maggio.
Instead of funding litigation, Birnbaum used some of the more than $ 3 million he received from investors to post bail on a $ 5 million house in New Jersey and pay off his credit cards. personal, according to complaints from the DOJ and the SEC.
“He used Cash4Cases to steal money for himself, then tried to cover up his scheme by directing a subordinate to forge books and records,” Manhattan attorney Audrey Strauss said in a statement. communicated. âNow Birnbaum is awaiting conviction for his fraudulent conduct. “
The SEC said Birnbaum defrauded at least four investors by selling them debt securities while distorting the use of the money and promising them returns that did not exist or were already promised to another investor.
The DOJ case is United States v. Birnbaum, US District Court for the Southern District of New York. A file number has not yet been assigned.
For the prosecution: Daniel Loss
The SEC case is Securities and Exchange Commission v. Birnbaum, US District Court for the Southern District of New York, No. 1: 21-cv-08047.
For the SEC: Nancy Brown
For Birnbaum: Sam Braverman from Fasulo Braverman & Di Maggio