A class-action lawsuit was filed against Montgomery McCracken Walker & Rhodes, LLP (MMWR) on Dec. 9 over claims that the law firm represented alleged trust fund embezzlers.
The plaintiffs include: Dr. Harvey Kalan, the Harvey Kalan, M.D., Inc. Employee Welfare Benefit Plan, Dr. Pamela K. Erdman, the Dr. Pamela K. Erdman, M.D., Inc. Employee Welfare Benefit Plan, Gretchen Castellano, Drs. Martin and Elisa Zenni, and the M&E Zenni, Inc. Welfare Benefit Plan.
John Koresko retained MMWR to represent him in multiple lawsuits pertaining to his operation of a employer welfare arrangement, REAL VEBA. Koresko and his companies were converting assets held by the REAL VEBA Trust and the Single Employer Welfare Benefit Plan Trust (SEWBPT). The trusts were meant to hold assets for the participants and their beneficiaries.
Within days of MMWR agreeing to represent Koresko, the United State District Court for the Eastern District of Pennsylvania entered a partial summary judgment against Koresko, Jeanne Bonney and PennMont Benefit Services, Inc., ruling that they had transferred trust assets to non-trust accounts. MMWR did not withdraw its appearance on behalf of any of the parties and did not stop representing Koresko, his alleged co-conspirators or his companies.
MMWR allegedly billed and accepted payments of $1.4 million from the trusts for the representation of Koresko and his alleged co-conspirators.
The lawsuit was brought under the Employee Retirement Income Security Act of 1974 and seeks reimbursement of all fees received by MMWR to the trusts.
The plaintiffs are represented by Ira B. Silverstein of Feldman Morgado, PA in New York City.
United State District Court for the Eastern District of Pennsylvania case number 2:14-cv-06985.