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Monday, November 30, 2009

Suit vs alleged Ponzi schemer ties Fla. manager, Radnor firm

Investors who filed a $100 million lawsuit against accused Ponzi scheme operator Scott Rothstein and his bankers have added new claims about why Radnor investment manager Barry Bekkedam introduced clients to a fund that invested with Rothstein. Read and search the amended complaint here.

Federal prosecutors in Florida have said, in federal court filings, that Rothstein raised millions from investors to finance legal settlements in non-existent cases, and stashed part of the money in North African bank accounts. He hasn't been charged with a crime.

The suit alleges that Doug and Linda Von Allmen and others invested more than $100 million with Rothstein, through Florida businessman George Levin's Banyon Income Fund LP. It says they invested after Bekkedam, who the plaintiffs call a "promoter" of the Banyon fund, said that "Levin was personally worth over $400 million" and would "guarantee" the Rothstein settlements his fund planned to buy with their money.

Bekkedam, who played basketball and studied accounting at Villanova in the 1980s, heads Ballamor Capital Management, which manages around $1.8 billion for more than 100 wealthy families. He's also a past director of Nova Bank and other Philadelphia-area companies.

According to the amended complaint, filed last Wednesday in a Florida state circuit court in Fort Lauderdale, "Ballamor and Mr. Bekkedam received $5,000,000 from Levin for their involvement in this Ponzi scheme along with a $18,000,000 investment through Ballamor into Nova Bank." The complaint later calls the $5 million a "loan".

Ballamor general counsel Lawrence Rovin told me the payments to Ballamor and Nova were unrelated to the Banyon investments, and the amounts were exaggerated in the suit.

"Mr. Von Allmen's lawyer has shown a tendency to put things in this complaint that are inaccurate," Rovin told me.   . "Mr. Bekkedam and Mr. Levin were discussing a number of different business opportunities, as businessmen do...

"Ballamor needed some capital to expand our business. George agreed to provide us with capital on terms that were certainly not sweetheart terms. He made a $1 million investment, not a $5 million investment.

"Similarly, a number of our clients are investors in Nova Bank. They were looking to raise some capital. Barry recommended that as an investment. George made a $5 million investment, not an $18 million investment."

NEW: Brian Hartline, chief executive at Nova, confirmed to me that Levin had invested $5 million. He added that Levin had applied to the Federal Reserve to make an additional larger investment, "and it was approved in the fourth quarter of this year, but unfortunately he fell victim to the (Rothstein) scheme and was unable to fulfill it."

EARLIER: The Nova and Ballamor investments and Bekkedam's contacts on behalf of Banyon "were not linked," Rovin added. "There was no quid pro quo." Ballamor also objects to calling Bekkedam a Banyon"promoter," he told me. "We were paid strictly on the basis of our regular management fees," which run "around one percent a year." Rovin told me last month that Ballamor clients had put around $30 million into Rothstein funds, and the firm is trying to help them get it back.

UPDATE: The Von Allmens' lawyer, William Scherer, said he'd amend the complaint again if the numbers are off, but he stands by the claim Levin's investment in Ballamor was "for their involvement in this Ponzi scheme." Banyon spokesman Jesse Daris told me Scherer's lawsuit was "inaccurate."

 
Posted by Joseph N. DiStefano @ 4:49 PM  Permalink | 4 comments
Comments   
  • Comment removed.
  • 0 like this / 0 don't   •   Posted 10:35 AM, 12/01/2009
    Yeah man, it's complicated --
    — distefj
  • 0 like this / 0 don't   •   Posted 1:37 PM, 12/01/2009
    Bs. I bet they were raising money for this scheme, and that they did exactly zero levels of diligence.
    — Wannabeer
  • 0 like this / 0 don't   •   Posted 3:06 PM, 12/02/2009
    Hey Ballamor. Look for the fees not for the faults!
    — warbird


4 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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