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Delia v. Leverage Group

February 2, 2009

ANN MARIE DELIA, WILLIAM DELIA, ROBERT SWEENEY, VERONICA SWEENEY, TARA SROKA F/K/A/ TARA SWEENEY, AND LUDVIG HAUGEDAL, PLAINTIFFS,
v.
THE LEVERAGE GROUP, LEVERAGE OPTION MANAGEMENT CO., INC., LEVERAGE MANAGEMENT LLC, NORTH AMERICAN FINANCIAL, PHILIP BARRY LLC, PHILIP BARRY, HK HOLDINGS, LLC, AND JOSEPH'S DEVELOPMENT CORPORATION, DEFENDANTS.



The opinion of the court was delivered by: Sifton, Senior Judge.

MEMORANDUM AND ORDER

Plaintiffs Ann Marie Delia, William Delia, Robert Sweeny, Veronica Sweeny, Tara Sroka f/k/a Tara Sweeny, and Ludvig Haugedal commenced an action against defendants the Leverage Group ("Leverage Group"), Leverage Option Management Co., Inc. ("Leverage Option Management"), Leverage Management, LLC ("Leverage Management"), North American Financial ("North American"), Philip Barry ("Barry"),*fn1 and Philip Barry, LLC ("Barry, LLC")*fn2 (collectively, "defendants") on November 24, 2008, after several other groups of plaintiffs filed similar actions.*fn3 These cases were consolidated for pretrial purposes on November 17, 2008. On December 24, 2008, all plaintiffs filed an Amended Consolidated Complaint, which included the following additional defendants: Saint Joseph's Development Corporation and HK Holdings, LLC.*fn4 The Amended Complaint included causes of action for violation of federal and New Jersey securities law, federal and New Jersey RICO, fraud, conversion, negligent misrepresentation, breach of fiduciary duty, breach of contract, breach of implied covenants of good faith and fair dealing, and unjust enrichment. Plaintiffs seek compensatory, consequential, and punitive damages, attorneys' fees, and costs. Presently before this Court is the Delia plaintiffs' motion to attach certain assets belonging to the defendants. Defendants have not opposed this motion.

For the reasons set forth in my prior ruling in Monteleone v. Leverage Group et al., 2008 U.S. Dist. LEXIS 78983 (E.D.N.Y. October 7, 2008) ("Monteleone"), and the additional findings of fact and conclusions of law set forth below, the motion is granted.

Background

Familiarity with the defendant parties and procedural history is assumed. The following facts are drawn from the Delia plaintiffs' complaint, and are substantially similar to the facts of the Monteleone case. Defendants do not dispute any of the facts alleged plaintiffs.

The Plaintiffs

Plaintiff Ann Marie Delia is the Administratrix of the Estate of her late father, William A. Delia, who died on October 1, 2004, and was a resident of Brooklyn, New York. Robert Sweeney and Veronica Sweeney are married and reside in Brooklyn, New York. Tara Sroka resides in New York, New York. Ludvig Haugedal resides in Brooklyn, New York.

Facts Common to All Counts

Over the course of approximately twenty years, defendants solicited investments from plaintiffs by promising that they would provide safe investment opportunities with guaranteed returns. Complaint at ¶ 15. Plaintiffs relied on defendants' written guarantee that the investments would earn a minimum 12.55% annual return. Id. Defendants failed to make all of the promised interest payments, and when plaintiffs attempted to withdraw their principal amounts, they were told that the funds were not available. Id. at ¶ 16. Defendants made the following statements to each of the plaintiffs, which plaintiffs later learned to be false: (1) that Barry was a professional licensed investment manager with a successful track record in managing investments for individuals; (2) that this track record went back to 1977; (3) that the Leverage companies had excellent performance records; (4) that the Leverage companies had consistently earned annual returns of 12.55%; (5) that investment in the Leverage companies would be safe; (6) that investment in the Leverage companies would earn a guaranteed minimum annual return of 12.55% or, in some instances, 36%; (7) that interest income would be paid quarterly; (8) that funds invested in the Leverage companies would be held in segregated accounts for each investor; (9) that investors would receive quarterly statements evidencing the change in their accounts over each quarter; and (10) that investors in the Leverage companies would be able to liquidate their accounts upon request. Id. at ¶ 18. Individual Plaintiffs

While Mr. Delia was alive, he at various times invested sums of money with defendants. Id. at ¶ 21. Plaintiff Estate alleges that, as of March 31, 2008, its account had a balance of $460,650, which has not been returned despite its requests that defendants do so. Id.

Ann Marie Delia invested $133,749.78 with defendants. Id. at ¶ 22. Defendants have not made all of the interest payments that were agreed upon. Id. Plaintiff Ann Marie Delia alleges that, as of March 31, 2008, her account had a balance of $133,749.78, which has not been returned despite her requests that defendants do so. Id.

Robert Sweeney and Veronica Sweeney invested $16,000 with defendants on October 6, 1994, $50,000 on September 8, 1997, and $10,000 on June 17, 2003. Id. at ¶ 23. Defendants have not made all of the interest payments that were agreed upon. Plaintiffs Robert and Veronica Sweeney allege that, as of June 30, 2008, their account had a balance of $247,613.53, which defendants have not returned despite their requests that defendants do so. Id.

Tara Sroka invested $10,000 initially. Id. at ¶ 24. Defendants have not made the agreed upon interest payments. As of June 30, 2008, Tara Sroka alleges that her account had a balance of $35,824.78, which defendants have not returned despite their requests that defendants do so. Id.

Ludvig Haugedal invested $10,000 with defendants. Defendants have not made the agreed upon interest payments. As of June 30, 2008, Ludvig Haugedal alleges that his account had a balance of $35,894.51, which defendants have not ...


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