Update, Dec. 4, 2020
Paul Wassgren’s profile has been removed from the DLA Piper website and LIT assumes the company and Wassgren have parted ways.
Fox Rothschild, DLA Piper To Face Ponzi Claims In State Court
A California federal court has approved the voluntary dismissal of a suit accusing a former DLA Piper and Fox Rothschild LLP attorney – Paul Wassgren – and the firms of involvement in a $170 million real estate Ponzi scheme, allowing the plaintiff — a receiver appointed to represent investors — to pursue the claims in state court instead.
JAN 20, 2021
DLA Piper Atty Can’t Shake Ponzi Tie Suit, Judge Told
Real estate investors have urged a Florida federal judge not to toss their proposed class claims that a DLA Piper attorney and his previous firm, Fox Rothschild LLP, took part in a Ponzi scheme, arguing the complaint adequately alleges how the lawyer helped sell securities he purportedly knew were illegal.
The Eleventh Circuit’s “White Out” Opinions
Rubbin’ Out Kaplan lawyers criminal fraudulent transfers via fake billing; https://t.co/gSlENYszUE
— LawsInTexas (@lawsintexasusa) November 7, 2020
Receiver’s lawsuit alleges 2 BigLaw firms turned a blind eye to Ponzi scheme
Sept. 29, 2020
The receiver for investment funds accused of operating as a Ponzi scheme has sued DLA Piper and Fox Rothschild for allegedly facilitating the wrongdoing.
The Sept. 28 lawsuit filed by the receiver for EquiAlt investment funds and their investors claims that a partner who worked at both law firms was either grossly negligent or aided EquiAlt insiders in creating and perpetrating the Ponzi scheme.
EquiAlt was a private real estate firm that “raised more than $170 million from at least 1,100 unsuspecting investors around the country, by selling them fraudulent, unregistered securities, and then by comingling and diverting the investors funds for improper purposes,” the lawsuit says.
EquiAlt insiders used millions of dollars in investor money for such things as personal real estate, luxury cars, jewelry and jets by charging fees, commission and expenses that were not disclosed and were not earned, the suit contends.
The suit alleges that the partner, Paul Wassgren, prepared inadequate disclosures and compliance materials. Wassgren worked at Fox Rothschild from July 2010 through May 2017. He then began work at DLA Piper, where he was still employed when the complaint was filed Sept. 28.
The suit also says the law firms failed to protect the funds by recommending proper checks and balances and failed to have a system in place to prevent Wassgren from undertaking representation that involved conflicts of interest.
The law firms and Wassgren “never acquired any waivers of the multiple conflicts of interest existing between the investment funds, EquiAlt and the EquiAlt insiders, and in any event, the existing conflicts of interest were unwaivable,” the suit says.
The suit says the law firms received hundreds of thousands of dollars in legal fees “in exchange for aiding and turning a blind eye to the fraudulent activities of EquiAlt and the EquiAlt insiders.”
The suit alleges negligence, breach of fiduciary duty, and aiding and abetting fraud.
DLA Piper, Fox Rothschild and Wassgren did not immediately respond to the ABA Journal’s request for comment.
Paul Wassgren practices at the intersection of corporate law, real estate, and securities. He regularly represents funds, real estate sponsors, and investors, and has helped position DLA Piper as a market leader in the Qualified Opportunity Zone industry. Paul has extensive experience in the areas of project and real estate finance, acquisitions, general corporate law and private placements. His clients range in size from individual entrepreneurs to multinational corporations.
Before joining DLA Piper, Paul was a corporate partner at another AmLaw100 firm. Prior to practicing law, Paul worked as a consultant in the biotechnology industry, and was among the youngest licensed stock and bond brokers in US history.