A federal agency has named a Farmingdale lawyer, Joseph Lively, as a relief defendant in an alleged $8 million investment fraud, court documents show.
No criminal conduct or fraud is alleged against Lively.
The designation as a relief defendant meant that the agency, the Securities and Exchange Commission, had named him solely "for the purposes of recovering fraudulently transferred assets" of least $120,000.
The SEC filed Wednesday in U.S. District Court in Brooklyn, seeking to have Lively and three other relief defendants pay back about a total of $2 million.
"None of the relief defendants provided any consideration for the monies they received and they have no legitimate claim to any of these funds," the SEC said. Lively was paid the money for a five-year period ending in 2009, the agency said.
The investment scheme centered on a company, E-Z Media Inc., based on Staten Island and in Florida, that falsely told investors that it had valuable patents and contracts to supply food and beverage devices -- referred to as “carriers” -- to such clients as Heineken and Anheuser Busch, the SEC said.
The devices were to be used selling drinks at stadiums, arenas and movie theaters.
In fact, though, E-Z Media's principal owners had no patents or contracts, and they misspent half the investors’ $8 million for personal loans, mortgages and their childrens’ private school tuition, the SEC said.
Lively's attorney, Gregg Grossman, of East Meadow, said in a Thursday telephone interview that his client cooperated fully with the SEC and provided receipts and other documentation showing that the $120,000 was for work performed, and for reimbursement of expenditures. Grossman said his client provided marketing assistance, and helped work on marketing contracts, for the company. He also paid in advance for the company officials' business trips and got reimbursed later, as part of the $120,000, Grossman said.
"There was no criminality," Grossman said. "He was doing work for the company. We provided copious amounts of information to the SEC and cooperated in every way. He does have justification for the funds."
Charged criminally in the case were Angelo Cuomo of Staten Island and George Garcy of Aventura, Fla. Named as additional relief defendants were Cuomo's sons Ralph Cuomo and Vincent Cuomo, Cuomo's sister Judith Guido.
Photo shows chairwoman of the U.S. Securities and Exchange Commission, Mary Schapiro.