On Monday, Judge Steven Seeger granted summary judgment to Gair Gallo’s client, First Eagle Bank, on a $5 million RICO conspiracy claim. The case, Glen Flora Dental Center et al. v. First Eagle Bank, alleged that the two top managers of a chain of dental offices embezzled millions of dollars from the companies’ accounts for their own benefit. The plaintiffs contended that the bank ignored red flags and was an active participant in the embezzlement conspiracy by cashing checks written by the dental practice managers to buy personal items, pay college tuition for a child, and cover their own credit card debts. The court firmly rejected the contention that the bank agreed to join a conspiracy and put the blame on the owner of the dental practices, who hired the two managers with full knowledge that each had previously been convicted of bank fraud and nevertheless totally failed to supervise them or even review bank statements. All that is left of the case is a rump claim under the Fiduciary Obligations Act which itself has been gutted by the court’s finding that half the claimed damage period is barred by the statute of limitations because of the dental practices owner’s lack of diligence in the face of his own knowledge of misconduct.
See the LinkedIn post for more details.