Israeli law office defeats $60 million Madoff-spin-off claim in British court

Asserson firm succeeded in winning one of the “top ten cases” of the year in England, all managed from its headquarters in Tel Aviv.

Trevor Asserson 521 (photo credit: Ofer Amram)
Trevor Asserson 521
(photo credit: Ofer Amram)
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 billion.
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 performance.
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 market rate.
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 services.
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.
In 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 Tel Aviv.
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 lower cost.
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 aliyah.
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.