Beleaguered Developer Caught Attempting to Deceive NY Court

The beleaguered real estate developer, Jacob Frydman, a man with an extensive history of being the target of fraud and embezzlement lawsuits, has been ruled against in his latest episode of courtroom drama. The plaintiff, 8430985 Canada Inc. had commenced the special proceedings, seeking to enforce a $2,603,927.77 judgment that had previously been awarded against Mr. Frydman.

Defrauding Creditors

Frydman has a prodigious number of lawsuits already under his belt, having been involved in over 150 of them before 8430985 Canada Inc. initiated their own. In this Case,8430985 Canada Inc. was alleging that the defendant had signed a note and “a personal guarantee”, as it was described to the court, for a company Frydman had founded, apparently with the intent of defrauding his creditors. The company wasregistered as United Realty Advisors L.P.before Frydman sold it to First Capital Advisors.

Licensed to Practice Law in Ohio

From the outset of proceedings,8430985 Canada Inc. has asserted that Frydman, who is licensed to practice law in Ohio, is a businessman with an extensively documented history of running various companies, in both the public and private sectors, that have existed for the sole purposes of allowing Frydman to defraud his creditors. Furthermore, they asserted that another company owned by Frydman, JFURTI, received the necessary funds to allow repayment of the loan from the buyer of United Reality Advisors LP.

In summarizing the case, the Honorable Judge Arthur F. Engoron stated that Frydman has orchestrated what was referred to as an “asset protection plan”, which was operated with the explicit goal of placing First Capital Advisors’ assets beyond the reach of the petitioner’s. In this scenario,Frydman was acting as transferor, and his acting with a lack of good faith was, in itself, reason enough to regard the transfer as fraudulent.

Defendant Pocketed the Money

Referring to the scheme Frydman had operated, the Judge stated that the record would reflect that the defendant had pocketed the $2,500,000 necessary to repay the judgment awarded against First Capitol Advisors. He accomplished this by transferring the funds to his other company, JFURTI. The Judge went on to say that, despite Frydman’s best efforts, he had not succeeded in deceiving the court, although he had claimed that he was unaware that the transfer would impact the ability of First Capital Advisors to pay the judgment previously rendered against them.

Frydman had also asserted that ownership of First Capital Advisors was more complex than it in fact was; he claimed that it was “an array of entities” who ultimately held ownership of the company, among these, was his own wife, Monica LibinFrydman.

As Frydman was the judgement debtor (the individual against whom a judgement has been made and who has yet to comply with the order mandating the transfer of money to another party as a means of repayment) and, also, the sole trustee of both trusts, it was determined by the court that the petitioner in the case had the right to seek repayment of the money owed using funds from the Trusts. Frydman’s tax returns for the fiscal year 2012-2014 were used to show that he had received enough money from the Trusts to repay, at least partially, the judgments against him.

Frydman opted to represent himself in court and has subsequently filed a motion to re-argue the case. 8430985 Canada Inc. were represented by Andrew J. Ryan of The Ryan Law Group.