As you may or may not remember, the largest Ponzi Scheme in the state of Washington was perpetrated by a man named Frederick Darren Berg. His company, Meridian Group, bilked investors out of $150 million or so and now the bankruptcy trustee for the company is trying to recover some of those funds. One of their targets is Moss Adams, the auditor of the relevant entities; the trustee has been in dogged pursuit of the firm to cough up some money for their role for a couple years now.
In a ruling Thursday, Judge Karen Overstreet wrote that the suit by Meridian bankruptcy trustee Mark Calvert properly belongs in King County Superior Court, where the trustee in 2011 first filed his claim that faulty Moss Adams audits enabled the fraud at Meridian to go undetected for years.
Calvert voluntarily dismissed the Superior Court suit after the judge in that case fined him $74,000 in July 2012 for not complying with her instructions to document how individual investors relied on the CPA firm’s Meridian audits.
In Thursday’s ruling, bankruptcy judge Overstreet wrote that “the Trustee’s actions with regard to the State Court Action support Moss Adams’ contention that his filing of the action in this Court was for the purpose of forum shopping.”
Lesser lawyers might take a look at this dire situation, yell at their assistants, call it a day, and move on to other litigious matters, but not these fellas. They remain confident and unswayed:
Calvert’s attorney, Michael Avenatti, said in an email that Overstreet’s ruling means “the case was dismissed on jurisdictional grounds only. It does not relate in any way to the merits.”
He added: “We look forward to continuing the litigation and bringing Moss Adams’ conduct to light.”
You have to admire the gusto.
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