A Brooklyn attorney, entrusted with managing $2 million in funds from investors, reportedly transferred the money on the same day it was received. Now, it’s unaccounted for, as detailed in a recent court filing.
Lawyers representing the foreign investors suggest that part of the missing funds may have ended up in the accounts of seasoned Democratic figure Frank Seddio.
These investors have been seeking to reclaim their substantial investments for nearly a year, navigating a prolonged lawsuit over alleged manipulations by Seddio.
In court recently, it came to light that attorney Mark David Graubard received the funds in his escrow account and then promptly transferred it to a third-party entity identified as 536 Holdings LLC.
Records presented by Mr. Gloverd indicated that the entire $2 million was both deposited and withdrawn from the account set up to ensure that two prospective investors had adequate funds for the intended deal.
He asserted in court documents that all transactions were handled according to instructions from authorized individuals.
However, only investors were permitted to make decisions about the funds. A signed escrow agreement clearly stated that Graubard could not touch any part of the deposit without written authorization.
Gloverd has previously insisted he was ready to deposit the funds with the court last summer, as ordered by the prior judge, but this never happened.
The latest findings might fuel long-standing worries among investors that their money is likely lost.
Attorney Babak Ghaffarzadeh referred to various “highly suspicious transactions,” including one involving the Seddio Law Firm, which was actually in litigation against Graubard at that time.
He pointed out that the escrow account was permanently shut down in June, something Graubard allegedly failed to disclose.
A spokesperson for Seddio denied ever receiving any payments from the escrow account.
Graubard showed up in Brooklyn Supreme Court recently, finally delivering bank records related to the escrow after months of delay following a court order.
During the session, three sheriff’s deputies were present, prepared to execute an arrest warrant for Gloverd if he did not produce the necessary records.
Justice Francois Rivera expressed frustration, noting, “I can’t fathom why a lawyer, an official of the court, would willingly disregard a court order, jeopardizing his license and freedom.”
Despite the documents submitted, Rivera found the bank statements lacking due to missing pages and excessive redactions obscuring some account balances.
“This is just not acceptable, Mr. Gloverd,” Rivera declared. “The non-compliance is utterly perplexing.”
Rivera has scheduled a hearing in March regarding Graubard’s continued failures to adhere to court orders, each potentially leading to a $10,000 penalty.
After the court proceedings, Gloverd and his attorney, Israel Goldberg, chose not to comment.
A representative for Graubard contended that any claims of misappropriation of escrow funds are “unequivocally false.”
Later, a spokesperson for Gloverd sent several revised statements, asserting that he has “fully complied with all laws and judicial orders pertaining to this unfounded lawsuit” and labeling claims of misappropriated funds as “patently false.”
This convoluted case, which Seddio is believed to have instigated to block investors from recovering their money, has lingered in the court system for over a year and is now overseen by its fifth judge due to repeated rejections.
Investors are additionally pursuing a federal lawsuit, alleging that the former chairman of the Brooklyn Democratic Party is manipulating the judicial system to aid “con artists.” He has denied any wrongdoing.
