Accountant for family suing firm challenged on assertions

SANTA ANA -- Jurors in a fraud trial against Buchalter APC on Wednesday heard from an accountant who detailed years of bookkeeping by attorneys that he described as "fraudulent" and said it depleted a multimillion-dollar dairy farm family's fortune.

Mark L. Van Buskirk, a sole practitioner in Long Beach, detailed what he labeled "circular transactions" in which the family's attorneys took money from some accounts then replaced it with money from other accounts.

His testimony followed nearly a day of testimony from another certified public accountant, Andrew William Bryant, who detailed the family's finances before and after a wealth management plan was implemented, which a lawsuit contends essentially was a Ponzi scheme.

Bryant and Van Buskirk's testimony dominated the second and third days of the trial, which spotlights Buchalter's hiring and oversight practices as the family behind the Alta-Dena Dairy empire seeks tens of millions in damages for what they say was a yearslong fraud perpetuated by two lawyers, Raymond A. Novell and J. Wayne Allen.

Novell was a sole practitioner and longtime family friend; Allen was a veteran of trusts and wealth management who worked at Berger Kahn LLP, then Buchalter, before the firm ousted him in 2010 for rule violations involving personal loans from the Stueves.

Buchalter is the only remaining defendant in the 8-year-old case after Novell, Allen and Berger Kahn settled last week. Novell stipulated to a non-collectable judgment of $200 million, which jurors learned of on Tuesday from Bryant.

Both Allen and Novell will testify for the Stueves, according to plaintiff's attorney Robert E. Barnes of the Barnes Law Firm LLP. Barnes is representing the Stueve family with Michael S. Cooper, Douglas M. Hanchar and Tony J. Nasser.

Alan A. Greenberg of Greenberg Gross LLP is defending Buchalter with his co-founding partner, Wayne R. Gross, and two associates, Stephanie S. Elder and Claire-Lise Y. Kutlay. Stueve et al. v. Novell et al., 10-00411651 (Orange Super. Ct., filed Sept. 24, 2010).

Bryant detailed the family's finances before and after Novell and Allen took over. He said the family had nearly $35 million in capital accounts in 2000, but 10 years later, they had just $40,000, despite Novell's promises of triple returns on their investments.

Under cross-examination, Bryant acknowledged to Greenberg that accounts typically didn't hold much money because the family had several promissory notes that paid regularly, and Novell distributed $18 million to the family between 2001 and 2009. He also acknowledged that the Stueves still had many assets when Novell was removed as trustee in early 2010 and the $40,000 was discovered.

Greenberg also emphasized Buchalter "had absolutely nothing to do with the Stueves choosing to put Raymond Novell in charge of the trusts," which Bryant acknowledged.

On re-direct from Barnes, Bryant told jurors that the trusts that paid the $18 million actually generated $40 million during that time.

On re-cross, Greenberg asked Bryant how much of the $40 million went to Buchalter and if Bryant was saying $22 million had been stolen. He also emphasized that Buchalter received only $155,000 in fees from the Stueves and that some of the $40 million would have been spent on administrative costs, which Bryant acknowledged.

"So you're not here to say that somebody stole $22 million, correct?" Greenberg asked.

"Money's been diverted," Bryant answered.

"Are you saying $22 million was stolen, yes or no? I don't want to hear something was diverted. Was $22 million diverted, is that what you're saying?"

"The [younger and older Stueves] received the $18 million amount. However, the estate generated an excess of $40 million," Bryant said.

At Greenberg's request, Orange County Superior Court Judge William D. Claster struck Bryant's answer as nonresponsive. Greenberg asked the question again.

"I don't know the exact number. I don't know," Bryant answered.

The trial continues on Monday.