A Nassau County attorney knew there were investment risks when he approached two local businessmen about placing their pension plans with financier Bernard Madoff, a new lawsuit claims.
Attorney Frederick Z. Konigsberg of East Hills suspected as early as 1991, when the investing began, that something was wrong with Bernard Madoff Securities Inc., the lawsuit states, but still placed the plaintiffs' investments in what was later revealed as a mammoth Ponzi scheme.
The lawsuit, filed Jan. 20 in State Supreme Court in Mineola, estimates plaintiffs' losses at not less than $1 million. They are suing for legal malpractice, undue enrichment and breach of fiduciary duty.
The lawsuit says the plaintiffs pooled money to invest with Madoff because he required investment minimums. Together, they reached the minimum, which was not specified.
Plaintiff Jan Stahl of Glen Head would not comment. Attorney John Lawlor of Mineola, who represents Stahl and the other plaintiffs, also declined to comment Wednesday.
Konigsberg earned 5 percent of the earnings stream generated by plaintiffs' investments, the suit states.
Konigsberg, dismissing the suit as "nonsense," said that he hasn't practiced law in 15 years and that Stahl is a former friend. Konigsberg said he personally lost $8 million to Madoff and was investing family money when Stahl and others "requested to come in."
The lawsuit says Konigsberg never told Stahl and the others that investing pooled money would rule out protection by the Securities Investor Protection Corp. SIPC protects accounts up to $500,000 and has denied the plaintiffs' claims.
Konigsberg and his wife, Susan, are both defendants. Several businesses - APO Health, Buyer's Alternatives, Inc. and PJS Trading, Inc. - are listed as plaintiffs. Stahl said APO Health no longer exists. Peter Steil of APO is also a plaintiff.