DBSI Trustee Says Foley Complicit In Ponzi Scheme

Law360, New York (November 1, 2011, 1:42 PM EDT) -- A trustee working to recoup funds for investors cheated by bankrupt real estate investment firm DBSI Inc. sued Foley & Lardner LLP in Delaware on Monday for allegedly aiding company insiders in a $500 million Ponzi scheme.

James R. Zazzali, trustee of the DBSI private actions and estate litigation trusts, said that lawyers for DBSI companies, such as Foley, provided “substantial aid and assistance” to company officials who began collecting and diverting investor funds known as “accountable reserves,” which were supposed to be reserved for specific...
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