Thursday, July 30, 2015

Main Line firm's clients invested $30 million with 'Ponzi' lawyer

"We have retained counsel to advise us as to how to best approach this."

Main Line firm's clients invested $30 million with 'Ponzi' lawyer

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Ballamor Capital Management, Radnor, which manages $1.7 billion for around 100 wealthy investors, says it's trying to help some of its clients get back an estimated $30 million placed with Scott Rothstein, a Fort Lauderdale lawyer who ran a what federal prosecutors said in court filings yesterday was a multi-million-dollar "Ponzi scheme" that convinced wealthy people to invest in non-existent legal settlements.

"We have clients who we put into Banyon Income Fund," a Las Vegas fund that invested with Rothstein, Ballamor general counsel Lawrence Rovin told me.

Ballamor suggested the fund to the investors after doing a "due diligence" review, Rovin said. "We have retained counsel to advise us as to how to best approach this for our clients."

"We did not get any compensation for putting clients in the fund," he added. "We were not a promoter." 

Ballamor President Barry Bekkedam introduced Florida investor Doug Von Allmen to Banyon fund operator George Levin, according to a $100 million lawsuit filed by Von Allmen against Rothstein last week. The lawsuit was reported by the Fort Lauderdale Sun-Sentinel newspaper.

"That is true. Bekkedam knew both men socially," Rovin told me. "He knew of the strategy and thought it was of interest." Von Allmen later invested both in Banyon and directly with Rothstein, Rovin said.

The government has filed to seize Rothstein properties in Fort Lauderdale valued at over $15 million, Morocco and Gibraltar bank accounts holding more than $15 million, and a string of fancy cars, all of which it said he bought improperly with investors' money. The government has not filed criminal charges in connection with the case.

Bekkedam and Ballamor haven't been accused of wrongdoing. Two lawyers for Rothstein didn't return calls seeking comment. Banyon fund manager Levin didn't return a call to his office, and a lawyer for plaintiff Von Allmen didn't call back.

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PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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