Robin Weiss and Vanessa Huber Secure Seven Figure Judgment for Receivership Estate

Robin Weiss and Vanessa Huber secured a summary judgment ruling for Kevin Kent in his role as Receiver for Elm Street Investments stemming from a $100 million fraudulent investment scheme.

Kent’s case arose from a criminal investigation and prosecution of a Pennsylvania investment advisor who was initially arrested in August 2019 and indicted for securities fraud in June 2020.

According to the SEC, the advisor raised “approximately $105 million from approximately 40 investors based on false representations that she would invest their money in publicly traded securities through various trading strategies that she championed as providing consistently high returns.” The SEC complaint alleged that the adviser “made very few investments in these trading strategies, and instead largely used investors’ money to repay other investors and for her own personal investments.”

The U.S. District Court for the District of New Jersey appointed Kent as Receiver in June 2020 over the assets of the adviser and entities she controlled, to marshal, pursue, and preserve those assets for the benefit of Smith’s victims. Among those entities was Elm Street Investments, which made a loan of more than $1.5 million in connection with a real estate transaction in Florida, memorialized by a promissory note and secured by a secondary mortgage.

The property was subsequently lost through a foreclosure action brought by the first mortgage holder, and the promissory note was never repaid. On Kent’s behalf, Weiss and Huber initiated action to enforce the promissory note, seeking to recover the principal amount of the loan, plus interest. The defendant raised various defenses including fraudulent inducement, unclean hands, and in pari delicto. On April 25, the court entered an order granting summary judgment in favor of Kent.

“As counsel for the Receiver, we’re thrilled to have successfully concluded this matter, which outcome will ultimately benefit those harmed by the fraudulent investment scheme,” Weiss said. “Our hope is that this ruling will go a long way in helping to secure more favorable outcomes in other litigation we have initiated on behalf of the Receivership Estate.”