By Casey Sullivan
NEW YORK, Dec 19 (Reuters) - A group of British investors
have sued Cozen O'Connor and Blank Rome, claiming a former
partner at the firms conspired with a landlord to "dupe" them
into throwing tens of millions of dollars into a "fictitious"
In a lawsuit filed Tuesday in Manhattan federal court, the
investors claimed they were owed at least $27 million for a 2006
investment into a falsely advertised River City, Philadelphia,
real estate development project. They said they were misled
about the project's size and value by a group of promoters,
including landlord Ravinder Chawla and business partner Richard
Zeghibe, who used the lawyer Charles Naselsky as legal counsel.
Naselsky, a former Cozen O'Connor and Blank Rome real estate
transactional partner, advised Chawla on various aspects of the
River City project, including his presentation to investors and
his purchase of the land, according to the lawsuit. The
investors are suing Cozen O'Connor and Blank Rome for conspiracy
to defraud and for aiding and abetting fraud in connection with
Naseksly's alleged role in the River City project. Naselsky is
not named as a defendant.
Naselsky is currently serving a nearly six-year prison
sentence for tax evasion, wire fraud and obstruction of justice
in a separate matter. He failed to report $365,000 in income in
2005 and 2006, according to the lawsuit.
In a statement Blank Rome said, "Blank Rome denies any fraud
on the part of the Firm, and we intend to defend the action
vigorously." Cozen O'Connor did not return a request for
The UK investors, led by real estate investor Berish Berger,
said in the lawsuit that they were "misled to believe that River
City could and would be a 12-million-square-foot mixed-use
development featuring multiple 600-foot-tall skyscrapers, when
in fact the project was legally impermissible," according to the
The investors in 2008 sued a group of promoters of the real
estate project for fraud in the Eastern District of
Pennsylvania. In 2010, they received a judgment of more than $34
million in damages from Chawla and several others involved in
the project. Naselsky was not named in the 2008 lawsuit.
In Tuesday's lawsuit, investors claimed Naselsky conspired
with Chawla, Zeghibe and others to conceal from them a pending
Philadelphia zone ordinance that, if approved, would put a
125-foot height limitation on buildings in the proposed River
City construction area.
The lawsuit details emails sent by Naselsky in November 2006
to Chawla and Zeghibe saying that the ordinance put the project
in "serious jeopardy." In December 2006, the Philadelphia city
council approved the height ordinance, but the investors were
not informed of the setback and proceeded to advance millions of
dollars toward the project, the lawsuit says.
The UK investors also claimed that Naselsky knew that the
real estate promoters had advertised the development at a higher
value than it was worth. According to the lawsuit, Chawla and
Zeghibe bought the River City site for $32.5 million in May 2006
but crafted a "sham contract" that showed a $50 million purchase
of the property "to mislead investors as to the site's actual
"Naselsky knew that the $50 million contract was a sham
because he had negotiated the true $32.5 million contract," the
The investors are also suing the real estate services firm
Cushman & Wakefield for work done on an appraisal that valued
the River City site in August 2006 at $77 million, without
factoring in the pending 125-foot height restriction. The
investors, who relied on the appraisal as reliable information,
claimed it was "erroneous" because it said the River City land
was "not subject to any height limitation."
A Cushman & Wakefield spokesperson did not respond to a
request for comment. Danielle Lesser and Brett Dockwell, lawyers
representing the UK investors, did not return requests for
The case is: Berish Berger v. Cushman & Wakefield of
Pennsylvania, Inc, Blank Rome and Cozen O'Connor, U.S. District
Court Southern District of New York, No. 12-CV-9224.
For the plaintiff: Danielle Lesser and Brett Dockwell of
For the defendants: Not immediately available.
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