NEW YORK (Reuters) – Investment firm Fortress Investment Group LLC has sued law firm Dechert LLP over assurances the firm gave about a $50 million loan linked to disgraced lawyer Marc Dreier’s admitted Ponzi scheme.
The lawsuit, filed late on Monday in New York State Supreme Court, claims the law firm issued a “false” legal opinion letter that was the basis for Fortress making the loan.
“In clear and reckless violation of the recognized standards of professional duties, Dechert issued the legal opinion without doing even the most basic diligence concerning the clients whom it purported to represent,” the lawsuit said.
“In fact, the 2008 loan was an utter sham, the proceeds of which Dreier misappropriated for his own use,” it said.
Dreier, a high-profile New York lawyer who admitted to a $400 million investment fund fraud, was sentenced in July to 20 years’ imprisonment.
“We are aware of the claim, which is completely baseless, and we will defend the case vigorously,” a Dechert spokeswoman said in a statement.
The case is Fortress v. Dechert, 603819/2009, New York State Supreme Court. (Reporting by Edith Honan, editing by Gerald E. McCormick)