- - http://longislandbankruptcyblog.com -

Update on Ponzi Scheme Attorney Who Committed Suicide, Leading to Involuntary Bankruptcy for his Law Firm

Ponzi scheme on Long Island causes involuntary bankruptcy [1] 
 
Written by Craig D. Robins, Esq.
 
In November I wrote about a Long Island attorney, Jay Korn, who, on March 24, 2010, had just jumped eight stories to his death amidst an investigation into whether he fleeced millions in a Ponzi scheme.
 
He jumped from the roof of his the Hempstead building where his law office was located at 50 Clinton Street.
 
That led several investors in the scheme to put Korn’s firm, Korn & Spirn, into an involuntary Chapter 7 bankruptcy.
 
See:  Korn & Spirn — Involuntary Bankruptcy Just Filed Against this Beleaguered Long Island Law Firm [2] for a post that contains a fairly detailed discussion of the situation, the bankruptcy case, and an explanation about involuntary bankrutpcy.
 
Nasssau County D.A. Completes Investigation
 
The Nassau County District Attorneys Office just concluded, after examining Korn’s financial affairs for a year, that Korn was solely responsible for the Ponzi scheme.
 
In a statement, Nassau County District Attorney Kathleen Rice said, “The credible evidence did not establish that anyone other than Jay Korn was involved in the alleged criminal wrongdoing.”  She added that the D.A. was closing the case.
 
The Involuntary Bankruptcy Case Continues
 
The bankruptcy case, which had been filed in November, was assigned to Chapter 7 bankruptcy trustee, Andrew M. Thaler [3], who is in the process of investigating the decedents financial affairs to ascertain if there are any assets to liquidate for the beneift of creditors, who primarily consist of scammed investors.
 
The trustee may likely adopt some of the legal theories currently used by the trustee in the Bernie Madoff Ponzie scheme case to “claw back” from those investors who benefited from the scheme.
 
So far, about $13.1 million in claims have been filed in the involuntary bankruptcy case.  However, reported assets so far consist of a mere $2,500 representing funds that were in the law firm’s bank account.
 
How Did Korn Defraud His Friends and Clients?
 
Korn told friends and clients that he was administering a real estate investment program and he promised to pay investors returns of 12 to 15 percent per year.
 
As an attorney, Korn also represented parties in real estate transactions.  In one of those transactions, he represented a Manhattan doctor who was purchasing a condo.  Two weeks before Korn committed suicide, the doctor wired him $2.5 million for that real estate purchase.  The doctor has not seen the money since.
 
Long Island Bankruptcy Attorney David Baram, a colleague of mine who was with me at the National Association of Consumer Bankruptcy Attorneys Workshop in Puerto Rico last fall, represents Arthur Spirn, who was Korn’s law partner.  Spirn says he was a victim of his Korn. 
 
The Nassau County D.A. has not pursued him at all and appears to have been cleared by the D.A.’s investigation.
 
Be Sociable, Share!
  • [4]
  • [5]
  • [6]
  • [7]
  • [8]