Storch Byrne LLP Defeats Motions to Dismiss in Complex Financial Fraud Action

Storch Byrne LLP represents the Plaintiffs, two Panamanian companies and a mother and her four daughters. The Defendants are New York-, Israel- and Swiss-based financial firms and individuals. The complaint alleges that Defendants misappropriated the Plaintiffs’ funds through a complex web of unauthorized transfers and laundered transactions in, among other jurisdictions, Switzerland and Israel, that resulted in the depletion of over 90% of the Plaintiffs’ invested assets.

Various of the Defendants moved to dismiss the action, currently pending in New York State Supreme Court, on the grounds of forum non conveniens, an alleged forum selection agreement calling for venue in Switzerland, lack of personal jurisdiction and long-arm jurisdiction, statute of limitations, and failure to plead with particularity.

Storch Byrne LLP opposed the motions and argued, among other things, that New York is a convenient forum, the forum selection clauses are unenforceable, Defendants’ fraudulent concealment of their misconduct tolled the statute of limitations, and Plaintiffs’ claims were plead with particularity.

On December 30, 2020, Judge Andrew Borrok of the Commercial Division of New York County Supreme Court ruled in Plaintiffs’ favor and denied the Defendants’ motions to dismiss.

In denying the Defendants’ motions to dismiss, the Court held that “[t]he plaintiffs have plead with sufficient particularity the original fraud that permeates this action, and the continued fraudulent concealment of that fraud that explains why the plaintiffs lack information as to which of the allegedly related family entities may have their money. Under these circumstances, the defendants may not rely on either fraudulently obtained agreements with never-before-seen by the plaintiffs forum selection clauses or to otherwise whisk away these causes of action based on the current pre-discovery inability to provide additional information.”

Steven Storch, Alexander Greene and Richard Derzaw represented the Plaintiffs in this action.

The case is Marcal Finance SA et al v. Isaac Sutton et al, Supreme Court, New York County, Index No. 653351/2015.

The Court’s decision can be found here.