SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU X GALASSO LANGIONE & BOTTER, LLP, (formerly Index No.: 07/010038 known as GALASSO LANGIONE, LLP) as Escrow Agent for STEPHEN BARON on SIGNATURE BANK Account No.: 1500451064, Plaintiff, SUMMONS WITH VERIFIED COMPLAINT Nassau County is designated by -against- Plaintiff as the place of trial Venue is based ANTHONY P. GALASSO, Individually, and on Plaintiff's residence. SIGNATURE BANK, Defendants. TO THE ABOVE NAMED DEFENDANTS: YOU ARE HEREBY SUMMONED to answer the complaint in this action and to serve a copy of your answer, or, if the complaint is not served with this summons, to serve a notice of appearance, on Plaintiff's Attorneys within twenty (20) days after the service of this summons, exclusive of the day of service (or within thirty (30) days after the service is complete if this summons is not personally delivered to you within the State of New York); and in case of your failure to answer or appear, judgment will be taken against you by default for the relief demanded in the accompanying complaint. Dated: June 8, 2007 By: MARK E. GOIDELL, Esq. LAW OFFICE OF MARK E. GOIDELL Attorneys for Plaintiff 377 Oak Street, Suite 101 Garden City, New York 11530 Index Number assigned: Date of filing with Clerk of Court:
SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU X GALASSO LANGIONE & BOTTER, LLP,(formerly Index No.: 07/010038 known as GALASSO LANGIONE, LLP) as Escrow Agent for STEPHEN BARON on SIGNATURE BANK Account No.:1500451064, Plaintiff, VERIFIED COMPLAINT -against- ANTHONY P. GALASSO, Individually, and SIGNATURE BANK, Defendants. X GALASSO LANGIONE & BOTTER, LLP, as Escrow Agent for STEPHEN BARON under SIGNATURE BANK account number 1500451064, as and for its Verified Complaint alleges: Plaintiff, GALASSO LANGIONE & BOTTER, LLP (hereinafter referred to as the FIRM ) is a limited liability law partnership that maintains its office at 377 Oak Street, Suite 101, Garden City, New York 11530. Upon information and belief, defendant, ANTHONY P. GALASSO, (hereinafter referred to as ANTHONY ) resides at 33 Southard Avenue, West Babylon, New York 11704. Upon information and belief, defendant SIGNATURE BANK (hereinafter referred to as SIGNATURE ) is a bank duly authorized to conduct business in the State of New York and maintains a branch office located at 1225 Franklin Avenue, 2nd Floor, Garden City, New York 11530. At all times relevant herein, PETER J. GALASSO (hereinafter referred to as PETER ) and JAMES R. LANGIONE (hereinafter referred to as JAMES ) were partners of the FIRM. At all times relevant herein prior to June 2004 and until January 18, 2007, ANTHONY was an employee of the FIRM. As an employee of the FIRM and at all times relevant herein, ANTHONY acted as the FIRM s Bookkeeper and Office Manager. In or about June, 2004, the FIRM represented STEPHEN A. BARON (hereinafter BARON ) in his divorce action then pending in the Supreme Court of Nassau County entitled WENDY J. BARON v. STEPHEN A. BARON under Index No.201384/02. On June 10, 2004, the FIRM executed an Escrow Agreement with BARON and his then wife s attorney, Jerry Winter, Esq., that provided the FIRM would hold the net
proceeds of $4,840,862.34, derived from the sale of a building located at 415 South Broadway, Hicksville, New York, in escrow. In furtherance of the Escrow Agreement, the FIRM instructed ANTHONY to obtain an escrow account application from SIGNATURE to fulfil its obligation as escrow agent pursuant to the Escrow Agreement. At the time that the FIRM sought the escrow application from SIGNATURE, the Firm conducted its banking and maintained the FIRM s bank accounts at SIGNATURE which were managed by Stephen Reinhardt ( REINHARDT ), an account manager employed by SIGNATURE. Among the accounts maintained at SIGNATURE by the FIRM and known by JAMES and PETER to exist in June 2004, were the FIRM s two operating accounts under account numbers 1500592636 and 1500351604 and the FIRM s IOLA account under account number 1500351639. In furtherance of its obligations under the Escrow Agreement, on or about June 11, 2004, PETER and JAMES executed the SIGNATURE escrow application requested by REINHARDT and presented to them by ANTHONY. The SIGNATURE escrow application entitled GALASSO LANGIONE, LLP, as Escrow Agents for STEPHEN BARON (hereinafter the Escrow Account ), provided, among other things, that : a) only PETER and JAMES, partners in the FIRM, were authorized signators on the escrow account; b) that no wire activity would be permitted on the escrow account; c) that no internet activity would be permitted on the escrow account; d) that no cash withdrawals would be permitted on the account; e) that the escrow account would not be linked to any other accounts; f) that bank statements reflecting the activity in the escrow account and items chargeable and payable to the escrow account would be mailed by SIGNATURE monthly to the FIRM at its offices located at 600 Old Country Road, Suite 304, Garden City, New York and 377 Oak Street, Suite 101, Garden City, New York 11530; and g) that interest would accrue on the deposits in the escrow account at the rate of 1.25 percent annually. The FIRM relied upon these safeguards in opening the escrow account and maintaining the escrow account with SIGNATURE. At or about the time PETER and JAMES executed the SIGNATURE escrow application, PETER directed that ANTHONY deliver the application together with checks totaling $4,840,862.34 to SIGNATURE Bank which ANTHONY was directed to deposit simultaneously with his delivery of said SIGNATURE escrow application. Upon information and belief, Anthony destroyed or secreted the SIGNATURE Escrow application executed by PETER and JAMES and substituted in its stead a SIGNATURE Escrow application that ANTHONY forged by signing for PETER and JAMES and by adding his name as signatory to the Escrow Account to be established by SIGNATURE. Upon information and belief, the FIRM had never designated ANTHONY as a signatory to any escrow account established by the FIRM at SIGNATURE. SIGNATURE permitted ANTHONY to execute the escrow account application as an additional signator, although REINHARDT was at all times aware that ANTHONY was not an attorney, was not authorized to act as a fiduciary, and was not permitted to make withdrawals or to act on the behalf of the FIRM with respect to the Escrow Account.
Upon information and belief, on June 11, 2004 SIGNATURE accepted the escrow application delineating ANTHONY as an additional signator and funds totaling $4,840,862.34 to be deposited at its Branch located at 1225 Franklin Avenue, 2nd Floor, Garden City, New York and established the Escrow Account under account number 1500451064. At the time the Escrow Account was established, the FIRM maintained its offices at 600 Old Country Road, Suite 304, Garden City, New York In or about November, 2004, the Firm relocated from its 600 Old Country Road office to 377 Oak Street, Suite 101, Garden City, New York.. Following its acceptance of the BARON funds, at ANTHONY S direction and without conferring with PETER or JAMES, SIGNATURE sent the monthly statements for the Escrow Account to Post Office Box 721 at the Post Office located in Mineola, New York, rather than to the FIRM at its then office in June 2004 located at 600 Old Country Road, Suite 304, Garden City, New York and, thereafter, commencing in or about November, 2004 at its office located at, 377 Oak Street, Suite 101, Garden City, New York. The Firm never authorized nor gave ANTHONY permission to divert the FIRM s mail to a Post Office Box. Upon information and belief, beginning on or about June 14, 2004 and continuing until January 17, 2007, ANTHONY wrongfully withdrew funds from the BARON escrow account the sum of approximately $4,400,000 by wire transfers to certain SIGNATURE accounts, some of which he maintained without the knowledge of the FIRM. Upon information and belief, between June 2004 and January 18, 2007, ANTHONY diverted and withdrew over $4,400,000 of the BARON escrow funds and converted and utilized these funds primarily for his own benefit. Upon information and belief, ANTHONY modified and/or withheld the SIGNATURE bank statements that would have disclosed the diversion of the Escrow Account funds from the FIRM and the FIRM s accountant, who was engaged to oversee the FIRM s banking activities and manage the FIRM s accounting. Prior to discovering ANTHONY s theft on January 18, 2007, the FIRM never received the bank statements concerning the Escrow Account nor the FIRM s other bank accounts maintained at SIGNATURE, nor were these statements made available to the FIRM. Between June 2004 and January 17, 2007, SIGNATURE failed to communicate with either PETER or JAMES about any of the FIRM S banking activity including the improper and wrongful diversion of the BARON escrow funds. On January 18, 2007, ANTHONY admitted to PETER and JAMES, among others, that he had wrongfully stolen the funds from the Escrow Account As of October 2005, the Firm had transferred all of its banking to M & T Bank with the exception of the Escrow Account. Upon information and belief, ANTHONY s wrongful conversion of the Escrow Account funds occurred in Nassau County. Upon information and belief, SIGNATURE S negligence and lack of ordinary care, and breach of contract occurred in Nassau County.
AS AND FOR A FIRST CAUSE OF ACTION AGAINST DEFENDANT SIGNATURE UCC ARTICLE 4-A paragraphs 1" through 32" hereof as if set forth at length herein. The FIRM and SIGNATURE agreed that no wire transfers nor internet activity was permitted on the Escrow Account, and that only PETER and JAMES were authorized signators on the Escrow Account. In violation of that agreement, SIGNATURE permitted ANTHONY to make substantial withdrawals and transfer from the Escrow Account by wire transfer and/or internet transfer in excess of $4,400,000. These withdrawals and transfers from the Escrow Account were unauthorized, fraudulent and without the FIRM s permission. The unauthorized wire withdrawals and transfers from the Escrow Account perpetuated by ANTHONY were funds transfers as defined in UCC 4-A-104. The funds transfers from SIGNATURE were accepted and paid by SIGNATURE to or for the benefit of ANTHONY for in excess of $4,400,000. SIGNATURE never offered the FIRM any security procedures to ensure payment orders received by SIGNATURE were authorized and error-free, nor did SGNATURE ever implement or effectuate any such security procedure with respect to the Escrow Account. The funds transfers perpetuated by ANTHONY and accepted and paid by SIGNATURE from the Escrow Account were not accepted and paid by SIGNATURE in good faith because SIGNATURE was actually aware that ANTHONY was not an attorney, could not act as a fiduciary with respect to the Escrow Account, and was not an authorized signator to the Escrow Account. SIGNATURE failed to verify any of the funds transfers perpetrated by ANTHONY that it accepted and paid from the Escrow Account. SIGNATURE never notified the FIRM of the funds transfers perpetrated by ANTHONY from the Escrow Account or that the Escrow Account was debited by virtue of the funds transfer within the meaning of UCC 4-A-204(1). The Firm nevertheless notified SIGNATURE of the unauthorized funds transfers on January 18, 2007 immediately upon its discovery of the theft. As a result of the foregoing, SIGNATURE is required to refund to the FIRM payment of the funds in excess of $4,400,000 unlawfully transferred from the Escrow Account with interest pursuant to UCC 4-A-202(1) and 204(1). AS AND FOR A SECOND CAUSE OF ACTION AGAINST DEFENDANT SIGNATURE STRICT LIABILITY UNDER UCC ARTICLE 4 paragraphs 1" through 44" hereof as if set forth at length herein. ANTHONY perpetrated his theft from the Escrow Account by forging signatures on documents resulting in unauthorized debits and funds transfers from the Escrow Account.
The forgeries perpetrated by ANTHONY resulted in the payment of items by SIGNATURE that were not properly payable within the meaning of UCC 4-401(1). SIGNATURE never notified the FIRM of the improperly paid items from the Escrow Account resulting from the forgeries perpetrated by ANTHONY nor that the Escrow Account was debited by virtue of such forgeries, nor has SIGNATURE made available to the FIRM the monthly bank statements and forged items within the meaning of UCC 4-406. The FIRM nevertheless notified SIGNATURE of the forgeries immediately upon its discovery of the theft on January 18, 2007. As a result of the foregoing, SIGNATURE is strictly liable for the losses occasioned by ANTHONY s forgeries from the Escrow Account with interest pursuant to UCC 4-401. AS AND FOR A THIRD CAUSE OF ACTION AGAINST DEFENDANT SIGNATURE LACK OF ORDINARY CARE UNDER UCC ARTICLE 4 paragraphs 1" through 50" hereof as if set forth at length herein. By virtue of the foregoing, SIGNATURE lacked ordinary care in the payments from the Escrow Account based upon ANTHONY s forgeries and unauthorized transfers and withdrawals. As a result of the foregoing, SIGNATURE is liable for the losses occasioned by ANTHONY s forgeries from the Escrow Account in excess of $4,400,000 with interest pursuant to UCC 4-406(3). AS AND FOR A FOURTH CAUSE OF ACTION AGAINST DEFENDANT SIGNATURE BREACH OF CONTRACT paragraphs 1" through 53" hereof as if set forth at length herein. By virtue of the foregoing, SIGNATURE breached its agreement with the FIRM by violating the aforesaid terms and conditions of the account application that: a) only PETER and JAMES, partners in the FIRM, were authorized signators on the escrow account; b) that no wire activity would be permitted on the escrow account; c) that no internet activity would be permitted on the escrow account; d) that no cash withdrawals would be permitted on the account; e) that the escrow account would not be linked to any other accounts; f) that bank statements reflecting the activity in the escrow account and items chargeable and payable to the escrow account would be mailed by SIGNATURE monthly to the FIRM at its offices located at 600 Old Country Road, Suite 304, Garden City, New York and 377 Oak Street, Suite 101, Garden City, New York 11530; and g) that interest would accrue on the deposits in the escrow account at the rate of 1.25 percent annually. As a result of the foregoing, SIGNATURE is liable for the losses occasioned thereby from the Escrow Account in excess of $4,400,000 plus interest.
AS AND FOR A FIFTH CAUSE OF ACTION AGAINST DEFENDANT SIGNATURE NEGLIGENCE paragraphs 1" through 56" hereof as if set forth at length herein. SIGNATURE negligently and carelessly managed and failed to protect the Firm s deposits and failed to exercise ordinary care in its oversight of those deposits in the following ways: i. By accepting a forged escrow application pertinent to the Firm s deposit of the Escrow Account funds. ii. In permitting ANTHONY, a non-attorney, to be a signatory to the Escrow Account. iii. In permitting ANTHONY to wire-transfer funds from the Escrow Account to various accounts ANTHONY wrongfully maintained at SIGNATURE. iv. In permitting ANTHONY to pay his personal expenses from the Firm s operating accounts. v. In negotiating and accepting for deposit forged two party checks from ANTHONY and thereafter permitting ANTHONY to utilize those funds for his own benefit. vi. In permitting ANTHONY to unilaterally divert all Firm SIGNATURE account records and monthly statements and the IRS 1099 Statements to a Post Office Box maintained by ANTHONY. vii. In negligently and carelessly failing to identify and uncover the banking irregularities set forth in herein; viii. In negligently and carelessly failing to communicate with either PETER or JAMES about the banking irregularities set forth herein. Upon information and belief, SIGNATURE representatives violated SIGNATURE s anti-fraud protocol and training in their negligent failure to recognize the irregular Firm account activity and to conduct an investigation into that irregular account activity. SIGNATURE failed to exercise ordinary care in its oversight and management of the Firm s accounts causing it to suffer losses for which SIGNATURE is liable and as a result of which the Firm is entitled to a Judgment against SIGNATURE in the amount of $4,400,000 plus interest. As a result of SIGNATURE s negligent failure to recognize the irregular Firm bank account activity, the Firm in its individual capacity and as escrow agent for BARON suffered losses in the amount of $4,400,000.00 plus interest. As a result of the foregoing, plaintiffs are entitled to Judgment against SIGNATURE in the amount of $4,400,000.00 plus statutory interest. AS AND FOR A FIRST CAUSE OF ACTION AGAINST DEFENDANT ANTHONY paragraphs 1" through 62" hereof as if set forth at length herein. Without any right or authorization from the FIRM, ANTHONY wrongfully converted and misappropriated the Escrow Account funds for his own benefit.
As a result of the foregoing, Plaintiff s are entitled to judgment against ANTHONY in the amount of $4,400,000 plus interest. WHEREFORE, Plaintiffs demand judgment against the Defendants as follows: a. Awarding Plaintiffs the sum of $4,400,000 plus interest on their First Cause of Action against Defendant SIGNATURE; b. Awarding Plaintiffs the sum of $4,400,000 plus interest on their Second Cause of Action against Defendant SIGNATURE; c. Awarding Plaintiffs the sum of $4,400,000 plus interest on their Third Cause of Action against Defendant SIGNATURE; d. Awarding Plaintiffs the sum of $4,400,000 plus interest on their Fourth Cause of Action against Defendant SIGNATURE; e. Awarding Plaintiffs the sum of $4,400,000 plus interest on their Fifth Cause of Action against Defendant SIGNATURE; f. Awarding Plaintiffs the sum of $4,400,000 plus interest on their First Cause of Action against Defendant ANTHONY; g. Awarding Plaintiffs their costs and disbursements incurred in this action; and h. Granting to the Plaintiffs such other, further and different relief as may be just and proper, together with the costs and disbursements of this action. Dated: Garden City, New York June 8, 2007 By: MARK E. GOIDELL, ESQ. LAW OFFICE OF MARK E. GOIDELL, LLP Attorneys for Plaintiff 377 Oak Street, Suite 101 Garden City, New York 11530 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU X GALASSO LANGIONE & BOTTER, LLP, (formerly Index No.: 07/010038 known as GALASSO LANGIONE, LLP) as Escrow Agent for STEPHEN BARON on SIGNATURE BANK Account No.:1500451064, Plaintiff, VERIFICATION -against- ANTHONY P. GALASSO, Individually, and SIGNATURE BANK, Defendants.
X STATE OF NEW YORK ) ) SS.: COUNTY OF NASSAU ) I, PETER J. GALASSO, being duly sworn, depose and say that: I am a member of the Plaintiff in the within action; I have read the foregoing Verified Complaint and know the contents thereof; the contents are true to my knowledge, except as to those matters therein stated to be alleged upon information and belief, and as to those matters, I believe them to be true. PETER J. GALASSO, ESQ. Subscribed and sworn to before me on June 8, 2007. Notary Public