Shmueli, a Master at Deception, Schemes to Defraud Dozens of Local Lawyers

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Has US Attorney Done Due Diligence on Their Source of the Parlato Investigation?

A hall of fame of lawyers?

Yes.

A question: What do attorneys Joseph Zdarsky, David Gutkowki, Steven Cohen, Corey Hogan, John LaFalce, Jaeckle, Fleischmann & Mugel,  Kevin Burke, Bradley Hoppe, the former law firm of Damon Morey, Eric Bloom, William Savino, Mitchel Banas, Blair and Roach, Kazlow and Kazlow, Gene Kazlow, Andrew Lavoot  Bluestone, Anderson & Anderson, David C. Buxbaum,  Kloss, Stenger and Lotempio,  Joseph Mazurek, Phil Abromowicz, David Kloss, Michael Paskowitz, and a dozen other lawyers have in common?

Answer: At one time they all represented Shmuel Shmueli and most regret ever meeting the man.  Many were stiffed out of payment of substantial legal fees. Some were deceived by Shmueli who falsely asserted standing in a lawsuit–or Shmueli fabricated evidence which he prompted the attorney to present in court, which they later came to learn was false evidence. Or they were sued by Shmueli for malpractice, or for unpaid fees, or both. Or they sued Shmueli or they wrote off substantial legal fees just to be rid of Shmueli.  Some accused Shmueli of unethical or fraudulent behavior. Court papers clearly suggest a wide scale scheme to defraud attorneys.  Some attorneys won judgments against Shmueli, or settled with Shmueli for pennies on the dollar.

Corey Hogan (HoganWillig Attorneys at Law)

Who is this guy, anyway?

As mentioned in the related article in this edition about my dual role as journalist and target of a federal investigation, Shmuel Shmueli,  a.k.a. Sam Samuels, a.k.a. Sam Shmueli, a.k.a. Rav (or Master) Shmuel Shmueli, born in Israel, claimed representative of Jewish leadership, a longtime resident of Brooklyn and of Buffalo and Niagara Falls, is a serial litigator and one of the instigators of the federal investigation into my affairs.

In coming weeks, along with a report of my own investigation, I will detail case by case how Shmueli successively defrauded lawyers. Ironically he did this while simultaneously accusing me of fraud.

Shmueli is unquestionably a master manipulator and through looking at these cases readers are invited to see a side of the court system rarely witnessed by anyone not involved in multi-million dollar civil litigation. You will meet an extraordinarily deceptive serial litigant as he games the system through fraud and makes money doing it – even when he loses.

Eric Bloom (Bloom & Shonn LLP)

Shmueli has never won a single lawsuit from 1997 to the present. He filed10 lawsuits against me, my partners and related companies and he lost all 10.

Shmueli’s strategy is in a way quite brilliant.

Documentary evidence shows that Shmueli created a series of companies with the same name with different owners, in different countries, in order to pursue litigation funding strategies – a strategy where he raised money from private investors who he promised would share in the large financial settlements or judgements from the court.

But since there never were any settlements or judgement awards, Shmueli never had to pay any investors and since he did not pay his lawyers, he kept much of the investors’ money.

David W. Kloss (Kloss, Stenger & Lotempio )

Shmueli won by losing lawsuits.

When he loses one attorney, through nonpayment of legal fees, he hires another lawyer to sue the last lawyer.

For instance, when Joseph Zdarsky, of Zdarsky, Sawicki and Agostinelli, sued Shmueli for nonpayment of $141,769.66 in legal fees, Shmueli hired Steve Cohen to defend him.

When Cohen later sued Shmueli for nonpayment of $114,000 in legal fees, Shmueli retained Eric Bloom, who, also, later quit when Shmueli failed to pay his firm, Damon and Morey substantial legal fees.

Shmueli also retained Anderson and Anderson of Ghanzou, China, to help him find ways to shave off more than 40 percent of his legal bills to his attorneys.

Andrew Lavoott Bluestone

Shmueli took Anderson and Anderson’s advice to heart and shaved off 100 percent of their bills and Anderson later sued Shmueli for not paying the firm some $60,000 in legal fees, ultimately winning a judgment against Shmueli for more than $18,414.78.

Lead counsel for Anderson and Anderson, David Buxbaum wrote, “Shmueli’s emails are completely self-serving, and unfortunately, in light of the Defendants’ (Shmueli) notorious nature of not paying their legal fees evidenced through the established record, they constitute crafty attempts to delay payment and artificially create a dispute on an account stated claim in anticipation of litigation.”

Shmueli also retained New York City malpractice attorney Andrew Lavoott Bluestone to sue Zdarsky, Sawicki and Agostinelli, and Jaeckle, Fleischmann & Mugel for malpractice.

Federal Judge Lawrence J. Vilardo

In a lawsuit an attorney can’t just quit. The court has to allow the attorney to quit. It took Bluestone months to get the courts to grant permission to withdraw from representing Shmueli who fought against his withdrawal, attempting to force Bluestone to come repeatedly to Buffalo from New York City despite deceiving Bluestone about the business and the lawsuits and despite not paying Bluestone for his services.

Bluestone’s affidavits clearly reveal he believed Shmueli was committing fraud upon the courts concerning a man named David Ho from Hong Kong, his alleged client, who, according to Bluestone, could not be spoken to by him, despite Bluestone representing him (Ho) as the purported owner of a company Shmueli was suing on behalf of.

Bluestone tried to collect money he was owed from Shmueli but ultimately was satisfied just to be able to get the various courts to release him from the obligation of representing Shmueli.

David Buxbaum (Anderson & Anderson LLP – Guangzhou)

The judges involved locally in one or more of Shmueli’s many lawsuits were State Supreme Court Justices Frank Caruso, Frederick Marshall, Ralph Boniello, Deborah Chimes, Richard Kloch, and Timothy Walker and Federal Magistrate Jeremiah McCarthy, and Federal Judge William Skretney.

Curiously, while Shmueli sometimes deceived his lawyers – for a time – he never succeeded in fooling any judge for very long.  They all ruled against him.

The amounts of money Shmueli stiffed lawyers out of was not inconsiderable.

Documents on file with the courts show he apparently cheated Zdarsky, Sawicki and Agostinelli out of $141,769. HoganWillig got swindled out of $114,000 – and copies of two checks totaling $54,000 are on file with the court of Justice Kloch- that Shmueli wrote to HoganWillig from a Hong Kong bank which Shmueli later stopped payment on.

Joseph Zdarsky (Zdarsky, Sawicki & Agostinelli, LLP)

Corey Hogan wrote in an affidavit, “This meritless excuse offered for stopping payment on the checks is just another attempt by (Shmueli) to evade payment to their attorneys for legal services rendered. (Shmueli and David Ho) have a history of engaging in a pattern and practice of engaging firms to provide legal services to them at their request and then refusing to pay for the services provided. This was the case with Zdarsky, Sawicki & Agostinelli LLP relative to the legal services they provided in the pending civil matter involving the Defendants in Niagara County Supreme Court. It is our understanding that Defendants repeated the pattern with Blair & Roach locally and a Manhattan law firm. We recently learned from Defendants’ attorney David C. Buxbaum in China that he has also not been paid by Defendants and that the Defendants ‘went into hiding.’”

Hogan was quoting Buxbaum accurately, who wrote to Hogan, “(D)espite an agreement to remit payment for the legal services rendered, Mr. Shmueli failed to make payment and went into hiding. If you know where he presently resides, please inform us.”

The list goes on and on.

Despite Shmueli threatening to sue Jaeckle, Fleischmann & Mugel for malpractice, Jaeckle got a retaining lien for more than $44,000 against any award Shmueli might one day receive.

Of course Shmueli got none since he lost the case.

Kloss, Stenger and Lotempio, another firm which had an experience with Shmueli which they later had cause to regret, won a retaining lien of more than $40,000 for legal fees after steep discounts in fees to try to settle with him.

Shmueli threatened to sue them for malpractice and wrote disparagingly of them in court documents.

David Kloss explained to the court why he was withdrawing from representing Shmueli when he wrote, “(D)uring the course of our representation, Mr. Shmueli repeatedly made meritless derogatory and defamatory statements, verbal and written, pertaining to Joseph J. Marusak’s (an ‘Of Counsel’ attorney to KSL who provided legal services to Altissima) integrity, which seriously eroded the relationship of trust between KSL and the plaintiff.”

Another attorney fared badly.  Buffalo Michael Paskowitz is currently being sued by Shmueli for malpractice in Queens County.

Woods Oviatt Gillman LLP, Gross, Shuman Brizdle & Gilfillan, and Kazlow and Kazlow all withdrew from representing Shmueli for various and similar reasons.

Rochester lawyer Gene Kazlow called Shmueli deceptive, writing that he lied to him about the case.

In arguing before the court the reasons for withdrawal from Shmueli, Kazlow wrote, “The reason why the retainer agreement was revised was that I had learned that certain representations made to me by Mr. Shmueli concerning the status of settlement discussions in the case, on which I had based the compensation structure in the initial agreements, were false.”

Newly confirmed Federal Judge Larry Vilardo represented Zdarsky in the Shmueli lawsuit.

His affidavits concerning Shmueli’s conduct are fascinating.

In one of them Vilardo writes, “(Shmueli’s) strategy is clear. Unable to claim (he) has complied with this Court’s order, (Shmueli) attempt(s) to paint a picture where both sides appear at fault on a number of discovery issues, thus inviting the Court to resolve the motions by proclaiming a ‘pox on both your houses.’”

But the list is not nearly exhausted.

Email correspondence in the possession of this publication reveals that Shmueli kept on including attorney William Savino in correspondence long after Shmueli failed to pay his legal fees as Shmueli undertook to make direct contact with Judge Walker in one cases, and in so doing clearly trying to do what he so often did — craftily pick a fight with his attorney and/or threaten to sue him for malpractice to keep them working on the case for free, while Shmueli apparently pocketed litigation fees.

Savino, in an email copied to the judge, and other lawyers involved in the case, warned Shmueli not to send him any more emails or he would consider it harassment.

Shmueli continued to send Savino emails.

Savino stated to an attorney for the opposition that he went directly to speak with FBI agents about Shmueli to suggest they look into Shmueli’s behavior more carefully. It is not known if agents evinced any interest in investigating Shmueli.

Another lawyer, who asked not to be named, told this publication that he was asked by Shmueli to provide Shmueli with double billings, which he declined to do since it is illegal and an obvious badge of fraud.  This led to a parting and the attorney was left with a large, outstanding bill, after Shmueli threatened to sue him for malpractice.

Among the many of Shmueli’s false assertions was that he represented David Ho, who Shmueli claimed was a billionaire from China. We have emails where he falsely asserts a relationship that no longer existed and documentary proof of Shmueli creating companies with the same name as Ho’s companies in other countries, possibly claiming they were the same company.

Shmueli made promises to attorneys, as representations of the “billionaire” David Ho from Hong Kong, (who in reality could not even afford to finish some development projects of his own and lost them to foreclosure). Shmueli said Ho was backing his efforts, alternated with threats of lawsuits, and led several good attorneys to be forced to confront Shmueli and either quit working for him and with some less ethical attorneys they were forced to compromise their standards and remain in the case under increasingly tense circumstances.

In coming weeks we shall dive deep into each of these relationships backed as they are with documentary evidence.

For my part, I personally witnessed much of this and certainly several instances where Shmueli showed contempt for his lawyers.

On August 11, 2009, at an annual meeting of the members of One Niagara, Shmueli’s lawyer, Eric Bloom waited outside while Shmueli and I met for hours inside his private office.

I suggested to Shmueli that making his attorney wait seemed unnecessary and rude.

Shmueli smiled and stated, “They work for me. That’s where you and I are different. Let me show you something.”

He called Bloom into our meeting room.

Shmueli started off by asked a simple question about a document.

Bloom answered. Then Shmueli said, “You may go.”

Bloom did not immediately leave, perhaps surprised that he had waited so long only to be called in for a trivial question.

Shmueli looked at me and said to Bloom, “I said you’re dismissed. Wait outside.”

Bloom left, looking a little annoyed or embarrassed, but without a word of protest, he went out of the room.

He was being paid, or so he thought.

In the end Shmueli stiffed Bloom out of substantial fees.

In any event, after Bloom left the room, Shmueli, who never called him back to the meeting, said to me, “That’s the way you deal with lawyers.”

As for Bloom, to his credit, he certainly caught on in time.

When Shmuel initially hired Bloom, Bloom would give a normal attorney’s certification of Shmueli’s affidavits to the courts, writing, “I Declare Under Penalty of Perjury that the Foregoing is True and Correct.”

Later Bloom, obviously suspicious of Shmueli, and that he might not be telling the truth, gave attorney certifications that were unusual to say the least.

Swearing oppositely to standard “Attorney Certification,” Bloom’s certifications for Shmueli read like the one he wrote on Oct 18, 2010:  “I, ERIC A. BLOOM, ESQ., do hereby certify, under penalty of perjury, that I have no actual knowledge that the substance of any statements of fact contained in the annexed document are false. This Certification is based solely and exclusively upon information provided by the client and upon the client’s certification to the undersigned attorney that such information is not false and is not based upon any review, audit, examination, inquiry or investigation made by the undersigned attorney or anyone acting on behalf of said attorney.…”

Diving more ominously into what apparently seems to be Bloom’s growing suspicions of illegal conduct on the part of his client, Bloom continued in the same certification, ““Where the paper is an initiating pleading, (i) the matter was not obtained through illegal conduct, or that if it was, the attorney or other persons responsible for the illegal conduct are not participating in the matter or sharing in any fee earned therefrom.

“Please take further notice that the opposing party may not and should not rely upon this Attorney’s Certification in assessing the truth or validity of the information contained in the annexed document. The credibility of this submission is no greater than the credibility of the client (Shmueli) represented by the undersigned attorney and the opposing party should give this document no greater credence because it bears this Attorney Certification.”

At the end of the day, it seems clear that Shmueli was living off the money he raised in Australia, Hong Kong and elsewhere for litigation; he kept his lawsuits (which he always lost) alive by perjury and making allegations that he had no basis in fact, and through these litigations he raised money which he used to pay attorneys initially and then, through his scheme of not paying them in the end, and of likely double billing to deceive investors, he pocketed the rest.

Question: So why is this of particular interest to me?

Answer: Shmuel Shmueli and his 10 lawsuits against me – are the bulwark of the federal investigation of me.

Next week we will look at Shmueli’s early history of fraud and then dive into the actual thousand details of fraud – committed here and abroad – attorney by attorney – something the US Attorney to date has not made clear if they have investigated or completely overlooked.

Stay tuned for Shmuel Shmueli Part 2.

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