Businessmen wrangle with former lawyers in alternative-energy fraud case
Two businessmen accused of involvement in a fraud scheme centering on an alternative energy company are asking a federal judge not to let their former lawyers – including a onetime district attorney of Washington County – off the hook in a lawsuit by investors.
In nearly identical filings, Robert Irey, of Robinson Township, Allegheny County, and Kevin Carney, of Euclid, Ohio, pushed back on an attempt by their co-defendants Steve Toprani, the former DA, and other lawyers from the firm Dodaro, Matta and Cambest to avoid liability in the securities fraud lawsuit.
The responses by Carney and Irey are part of a tangled knot of litigation surrounding Alternative Energy Holdings LLC, the now-defunct company that Carney, Irey and another man, Jonathan Freeze, allegedly began soliciting investors for in 2016. Six of their investors are now suing the trio and AEH, claiming that they never recovered their money or received any of the lucrative returns they were promised.
The members of the company supposedly told investors that the money would go toward building alternative energy facilities, the first of which would be in Greenville, S.C. No such plant appears to have been built, and it is unclear what happened to the money.
The plaintiffs allege that Toprani was representing AEH and its members starting in 2016, and that another attorney from the firm, Michael Hammond, joined him later. They’re suing those attorneys and DMC for a purported failure to warn them of “red flags” suggesting the venture was fraudulent.
Joseph Luvara, the attorney who represents Toprani, Hammond and DMC, said on Wednesday that his clients “vigorously dispute” both the plaintiffs’ case and the version of events that Carney and Irey offered in their most recent responses.
Toprani left DMC last year and is now employed by W.G. Tomko, a mechanical contractor in Union Township. He served as DA from 2008 to 2012.
The plaintiffs say Toprani and Hammond allegedly helped to draft and review the agreements that AEH made with its investors.
The case is assigned to U.S. District Judge Robert Colville.
Luvara has filed what’s known as a “cross-claim,” which essentially argues that if anyone is liable for damages in the case, it should be the other defendants and not Luvara’s clients. He maintains DMC lawyers were not involved in drafting the investor agreements.
In their latest responses, Carney and Irey deny wrongdoing. Still, they assert that their former lawyers shouldn’t be allowed off the hook for their role.
For example, Carney’s filing says that lawyers from the firm “allowed Defendant Kevin Carney to use a portion of their offices located at Southpointe Town Center … as AEH LLC’s temporary corporate offices until such time as AEH established permanent corporate offices within the same property, therefore demonstrating ongoing knowledge of the activities of Defendant Carney giving all parties direct access to all services provided by Defendant DMC and allowing for direct access to the day to day operations of AEH, and Kevin Carney (sic throughout).”
Among the documents each of them submitted to the court is a copy of the contract that Hammond and Irey signed on April 20, 2017, for the firm to represent AEH. At least some of the investors executed their own agreements with AEH in the ensuing months.
Luvara said that the new filings by the non-attorneys are “unsophisticated” and hard to interpret. He added that they appear to be inconsistent with the pair’s previous version of events. Earlier in the case, they said in court papers that DMC and its lawyers weren’t involved in drafting the agreements with investors. Now, they assert that DMC “has failed to prove they had no knowledge of the existence” of the promissory notes executed with investors.
“We’re in the process of preparing a responsive pleading,” Luvara said.
Michael Nagy, one of the attorneys representing the plaintiffs, previously said he doesn’t typically comment on pending litigation.