Indiana residents allege law practice guilty of Ponzi scheme

By Robbie Hargett | Aug 12, 2015

INDIANAPOLIS (Legal Newsline) - Three Indiana residents are suing a law practice, alleging it participated in a scheme of financial fraud involving DBSI Inc. and its subsidiaries.

Shirley Martin, Ron Martin and Michael Saharian, individually and for all others similarly situated, filed a class action lawsuit July 31 in U.S. District Court Southern District of Indiana Indianapolis Division against Eide Bailly, alleging multiple counts of massive financial fraud.

According to the complaint, DBSI offered investors substantial commercial real estate holdings across the country and made false claims about its history, assets, and investor success, including a claim that no investors had ever lost money on a DBSI investment.

The suit says beginning no later than 2004, insiders falsely presented the financial health of DBSI companies to the public, with the assistance of their auditor, the law firm Eide Bailly.

The lawsuit states at the end of 2008, DBSI was exposed as a Ponzi scheme. Eide Bailly also prepared misleading financial statements for several DBSI companies, actively enabling insiders to misrepresent DBSI companies' financial condition and to defraud investors, according to the complaint.

The plaintiffs allegedly invested with two DBSI investment products, first in 2006 (the Martins) and then in 2008 (Saharian), and, as a result, suffered losses and/or damages.

The plaintiffs seek compensatory and other damages in excess of $5 million for themselves and all class members, plus court costs. They are represented by attorneys David. O. Tittle, Brian. W. Welch, and Victoria Lewinski-Cain of Bingham Greenebaum Doll in Indianapolis, and by attorneys Edward P. Sheu, Thomas G. Garry, and Bradley F. Williams of Best & Flanagan in Minneapolis (pending pro hac vice to be filed).

U.S. District Court Southern District of Indiana Indianapolis Division case number: 1:15-cv-01202-WTL-DKL.

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