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McCrary Gets $33M Win In Fraud Case

Posted in Commercial Litigation,News on June 25, 2008

Baltimore judge has ordered Michael McCrary’s business partners in a New Orleans condominium project to pay the former Raven $33.6 million for secretly pocketing millions of dollars in insurance proceeds and other money.

After trial Wednesday in Baltimore City Circuit Court – during which McCrary’s version of the story was not challenged since all the defendants to his fraud suit had either defaulted, been held in contempt, or been precluded from participation – visiting Judge Paul E. Alpert awarded the retired All-Pro defensive end more than $15.8 million in compensatory damages, the same amount in punitive damages and an additional $1.9 million in pre-judgment interest.

McCrary, an imposing, sharply dressed presence behind his attorneys throughout the case, said the judgment “feels refreshing.” He said,

I’ve been dealing with this for about a year and a half, and to have the court see through all the fog and the smoke that was put up … was gratifying,” he said. “It makes a strong statement to my ex-partners that they can’t get away from this, and hopefully will prevent them from defrauding anybody in the future.

DRAMATIC TURN

The majority of the trial consisted of Kenneth B. Frank’s power point presentation. In his presentation, McCrary’s attorney discussed the contemplated deal and turning 45-story high office buildings into condominiums titles Crescent City Estates. McCrary put in a total of $3.5 million for half the interest in the property. When the property was sold, he recovered his initial investment along with $2 million.

The proceedings took a dramatic turn during a mid-morning break, when McCrary received an unexpected call on his cell phone from the ex-wife of Edward V. Giannasca II, McCrary’s former business partner and a defendant in the lawsuit.

Minutes later, now on the courtroom speaker phone, Suzanne Giannasca claimed Edward Giannasca was preparing to leave the country with the couple’s three children.

Under questioning from Alpert and McCrary’s attorney William H. “Billy” Murphy Jr., she tremulously said her ex-husband, who has joint custody of the children, has behaved similarly in the past when he “gets close to being caught.”

Frank then continued to detail the methods by which Giannasca and his associate, Stuart C. “Neil” Fisher, squirreled away $12 million in insurance proceeds paid to Crescent City Estates LLC after Hurricane Katrina spoiled the development plan.

Frank noted Fisher had filed suit against McCrary and filed bankruptcy on behalf of Crescent City Estates in Louisiana.

“Their misuse of the judicial system across this country to wear out this plaintiff and use the legal system as a shield is unconscionable,” said Frank, calling the defendant’s conduct “outrageous” and “egregious.”

To demonstrate that Fisher had behaved similarly in the past and would again in the future if not punished, Frank called Richard Bliss, a Washington, D.C. government relations attorney, who testified about his misadventures with Fisher in developing a 2,500-acre plot in Charles County in the late 1980s.

Bliss said he has learned he is not the only victim of Fisher’s “typical M.O.,” but that many people do not have the wherewithal to pursue litigation.

“Somebody takes your money and then uses your money to bleed you dry,” Bliss said.

Frank, however, said Wednesday’s judgment will be satisfied.

“As you recall, I said I’ve got some surprises, and I do,” he said. “This money will be collected.”

None of the defendants – Giannasca and Fisher, Fisher’s ex-wife Tamara J. Fisher, and entities controlled by Giannasca and Tamara Fisher – attended the trial. Neil Fisher faces arrest if he returns to Maryland; the trial judge considered issuing a warrant for Giannasca, who did not come to court sessions this week.

Giannasca did not return phone calls to his Street home, his Reading, Pa. office number, or his Manhattan office. Fisher declined to comment through his latest attorney, Brian W. Shaughnessy of Washington, D.C., who was not in court Wednesday and had not seen the judgment.

Richard Winelander, who represented Neil Fisher earlier this week and now represents one of Tamara Fisher’s companies, was in the courtroom Wednesday – as a spectator.

“He gave [McCrary] every cent that he asked for,” Winelander said, noting the granting of an oral motion for summary judgment without the opportunity to contest the plaintiff’s calculation was “highly unusual” and would be one basis for an appeal. “I didn’t have a chance to contest any of those numbers.”