The Tel Aviv-based Asserson Law Office has cleared its client, Sonja Kohn, of
charges of fraudulent involvement in the “Madoff Ponzi scheme” in a recent major
decision by a British court.
The victory, nearly five years from Bernard
Madoff’s December, 2008 arrest, was complete with the plaintiff’s decision, just
over a week ago, not to appeal and, unusually, to pay Asserson’s client’s costs
on a punitive basis.
The triumph of the $60m. (likely over $100
million with costs and interest) case in England is significant, both in terms
of the unusual mix of facts and because Asserson Law Offices managed the massive
legal battle from its headquarters in Israel.
Some highlights of the
unusual facts are that a Jewish- Austrian citizen was being pursued, for a US
fraud case in British courts, by the family of the notorious Bernard Madoff as
well as by both the US and British governments combined.
On June 29,
2009, Bernard Madoff was sentenced by a US Federal Court of the Southern
District of New York to 150 years in prison and ordered to forfeit $170
Madoff had conducted one of the most infamous Ponzi schemes in
history for over two decades, mostly in the US, but having some indirect impacts
on the company he owned in England.
A Ponzi scheme refers to when large
portions of investor funds are lost by a trusted fund-manager who, among other
things, did not invest the funds where he was telling his investors he had
invested them, and falsified reports regarding the investments’ positive
Enter Asserson’s client, Kohn, an Austrian business woman
who introduced Madoff to high-level clients leading to around nine billion
dollars of additional investments with his firm, and eventually (due to Madoff’s
fraud) huge losses to those investors (and to Kohn).
Madoff’s Estate and
the trustee of the UK Madoff company (substantially funded by the US government)
sued Kohn, who had received disputed payments in part of a case against the
directors of Madoff’s British company.
The suit was for allegedly knowing
about a variety of seemingly personal payments to Madoff (this was against other
defendants, not Kohn), receiving huge sums of funds from Madoff (including
during years when his firm was hiding that it was losing significant funds) for
no real service provided, concealing the lack of services provided and
improperly invoicing Madoff’s British company when she should have been
invoicing his American company.
The court rejected all of these
allegations against Kohn.
It found that the introductions she had made
were perfectly proper, potentially valuable and that while she had been paid
substantially for her services, everything was approved by the shareholders and
she had actually received a lower rate of payment for the introductions than the
Next, the court found that other services, such as
investment research services, which Kohn had provided, had been solid research
and not as the plaintiffs claimed: a large volume of wasteful and useless
research merely trying to create the impression of having provided real
Regarding Kohn’s invoicing Madoff’s company in England as
opposed to his US company, the court found that essentially the two companies
were merely two different arms of Madoff’s empire.
It added that the
company in England was essentially subsidized by the American company, that
Madoff listed the two on the same stationary and that, though they were in some
ways legally separate, that in substance, they were one and the same.
an unusual step, the court took the opportunity to commend Kohn’s “commendable
dignity” throughout the trial and rebuked the plaintiffs, noting that “Bernard
Madoff’s fraud itself blighted their lives and tainted their good names... to
this was added the burden of this unfounded claim, making serious allegations of
dishonesty and has been pursued relentlessly over several years, on occasion
with an unfair degree of hyperbole.”
Kohn, who has many children and
grandchildren living in Israel, has been involved in major Israeli business
dealings with Austria, Italy and local ventures as well as a wide variety of
other international ventures.
Part of the story is the Asserson firm
itself, which succeeded in winning, against a team of around 13 lawyers, one of
the “top ten cases” of the year in England, all managed from its headquarters in
The firm, founded in 2005, is the first British law firm with
its main headquarters in Israel.
Trevor Asserson, who leads the firm,
said that the firm boasts 20 top-notch lawyers (one lawyer just placed second in
all of England for junior lawyer of the year) and stands out both in quality and
Asserson, who worked and helped run some of the largest and
top British firms, said that while it might be “a grandiose statement” his firm
pro vides “higher quality lawyering” than most firms in England, comp firms that
only handle multi-billion dollar cases.
He said that part of the secret
is due to the firm’s headquarters being in Israel, it “attracts that quality of
lawyering” from highly talented British lawyers who want to make
Second, Asserson said that without compromising on quality, his
firm’s services are “far cheaper” than British firms, since the firm can pay
salaries more comparable to the Israeli lawyers’ market and does not need to
compete with higher salaries from British firms.
Asked how he got
involved in the case, Asserson said that many big cases get referred to him by
work colleagues who know about his quality work, and that in this case, Kohn was
also dissatisfied with the initial performance of another much larger British
firm that was originally handling her case.