Why isn't this story plastered all over the news??? Instead they have to cover Palin's daughter.
washingtonpost.com
By Kimberly Kindy and Joe Stephens
Washington Post Staff Writers
Sunday, August 24, 2008; Page A09
A son and a brother of Sen. Joseph R. Biden Jr. (D-Del.) are accused in two lawsuits of defrauding a former business partner and an investor of millions of dollars in a hedge fund deal that went sour, court records show.
The Democratic vice presidential candidate's son Hunter, 38, and brother James, 59, assert instead that their former partner defrauded them by misrepresenting his experience in the hedge fund industry and recommending that they hire a lawyer with felony convictions.
The legal actions have been playing out in New York State Supreme Court since 2007, and they focus on Hunter and James Biden's involvement in Paradigm Companies LLC, a hedge fund group. Hunter Biden, a Washington lobbyist, briefly served as president of the firm.
A lawsuit filed by their former partner Anthony Lotito Jr. asserts in court papers that the deal was crafted to get Hunter Biden out of lobbying because his father was concerned about the impact it would have on his bid for the White House. Biden was running for the Democratic nomination at the time the suit was filed.
Hunter Biden was made president with an annual salary of $1.2 million, despite his inexperience in the hedge fund industry, the lawsuit said. Before that, he had been part of the Washington law firm Oldaker, Biden & Belair, which earned $1.76 million in lobbying revenue in the first half of 2006, according to Congressional Quarterly's CQ MoneyLine. One of its biggest clients is the National Association of Shareholder and Consumer Attorneys, a District-based group representing law firms specializing in investment and corporate law.
Hunter Biden is one of many children and relatives of prominent members of Congress who have made their careers as lobbyists. He returned to lobbying after less than a year with Paradigm.
Lotito's lawsuit alleges that James Biden called him in January 2006 to arrange a job for Hunter Biden. It says James Biden told him that his brother (Sen. Biden) "was concerned with the impact that Hunter's lobbying activities might have on his expected campaign for the 2008 Democratic presidential nomination," and, "Biden told Lotito that, in light of these concerns, his brother had asked him to seek Lotito's assistance in finding employment for Hunter in a non-lobbying capacity."
Lotito does not provide any direct evidence of the senator's involvement and offers no witnesses to the assertion.
The campaign of Sens. Barack Obama and Biden declined to comment on the case, referring questions to Nicholas Gravante Jr., a lawyer representing Hunter and James Biden. Gravante said assertions that Joseph Biden told his brother he was concerned about his son's lobbying are "absolutely false."
"This lawsuit has nothing to do with Joe Biden, and there is absolutely no truth to those allegations," Gravante said. "It is a business dispute between former partners. The suit is baseless."
Brian C. Wille, an attorney for Lotito, said the lawsuit alleges no wrongdoing by Sen. Biden, only that his concerns set in motion the business deal.
"There was a concern that Hunter Biden's role as a lobbyist would have an impact on the senator's proposed presidential run," Wille said. "That's what James Biden told Mr. Lotito. . . . Was it true? Who knows? There is no allegation the senator was involved in any of these events."
In an affidavit, Hunter Biden said his father had nothing to do with the deal and that it is Lotito who swindled the Bidens.
He said Lotito lied about being a "fully licensed and accredited securities professional" with hedge fund experience.
In addition, he said Lotito recommended a lawyer to vet the business deal who was under investigation and was ultimately convicted on several felony charges of conspiracy and wire and mail fraud in a scheme to steal millions from a computer company.
In the hedge fund business deal, Lotito and the Bidens created a company called LLB Holdings USA and together agreed to pay $21.3 million for 54 percent interest in Paradigm.
In the lawsuit, Lotito said that soon after creating LLB, the Bidens crafted a "secret deal" to create their own company that was designed to buy out his shares in Paradigm for a low rate, to which he agreed. He said he knew nothing of the secret deal until later and now believes he was defrauded out of millions of dollars and his share in the company.
In the second lawsuit against the Bidens, which was filed in June, Lotito is also named as a defendant. Stephane Farouze, now an executive with Deutsche Bank, seeks $10 million, saying the Bidens and Lotito promised to buy his shares in the hedge fund company but reneged.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
