Defense expert blasts plaintiff’s expert accountants in law firm fraud trial

SANTA ANA -- A forensic accountant on Tuesday told jurors in the fraud trial against Buchalter APC that a plaintiffs' expert used flawed methodology to calculate damages, including "cherry picking" transactions to support his opinion.

"He was picking all the stuff that he wanted to pick, and he was ignoring all the stuff that could have been contrary to his opinion, and that's not the way we do things as forensic accountants. We look at both sides of things. We're supposed to be evenhanded," Kim Joseph Onisko, a partner with Onisko Scholz LLP in Los Angeles, said about plaintiffs' expert Mark L. Van Buskirk, a Long Beach accountant who testified for the plaintiffs.

Testifying as the final defense witness in the six-week trial, Onisko said Van Buskirk shoddily assessed the work of Raymond "Ran" Novell and ex-Buchalter shareholder J. Wayne Allen, former estate lawyers for the Stueve family of the Alta-Dena Dairy fortune, which resulted in error-riddled numbers "completely different" from what Onisko would have calculated.

Another expert for the Stueve plaintiffs, Robert Cunnane, a retired FBI agent who owns Cunnane Forensic Accounting in Rancho Santa Margarita, used the same method, Onisko said.

"Mr. Cunnane chose to do it the way he was trained as an FBI agent: To make single-entry accounting and make accusations. That's how this all happened," Onisko said in response to questions from Buchalter's lawyer, Alan A. Greenberg of Greenberg Gross LLP.

Onisko said Van Buskirk and Cunnane didn't use the industry standard of "double-edged accounting," which involves calculating all transactions to get a full picture. Van Buskirk's calculations regarding Novell and Allen's unpaid loans don't include listed loan repayments, and he counted some transactions twice, Onisko said.

"It's just not the way things should be done," he said.

However, on cross examination by plaintiffs' attorney Robert E. Barnes of Barnes Law, LLP, Onisko acknowledged as generally accurate the approximately $4 million that Novell paid himself over the years he managed the Stueves' estate.

"It was fairly close to the numbers that would have been represented by the other experts," he said.

Following up on Onisko's comments about the FBI's accounting methods, Barnes noted the ledgers at issue were Novell's ledgers. Double-entry accounting involving trusting "someone else's ledgers," Barnes said, "and if you trust someone else's ledgers, you're trusting in some cases the fraudster's own general ledgers, right?"

"Yes," Onisko answered.

Barnes also emphasized that Onisko never fully calculated the estate, either, which prompted re-direct examination by Greenberg.

"Do you typically find that it's incumbent upon you to do the work that the plaintiffs are supposed to do regarding damages?" Greenberg asked.

"No, we would never do the work unless we were requested. And my understanding is when you're trying to prove damages, you're supposed to do the work yourself to prove the damages," Onisko said.

Greenberg rested his case after reading excerpts from an untaped deposition of Allen.

Barnes earlier also read excerpts and showed video clips to the jury of both Novell and Allen's depositions, but Greenberg found excerpts in which Allen spoke about the involvement of Harold Stueve and his brother-in-law, Boyd Clarke, two now-deceased family patriarchs who Greenberg argues supported Novell and Allen and approved of the transactions now at issue.

Allen said Harold Stueve, who founded the dairy with his two brothers in 1945 and managed the business until it sold in 1989, would have been satisfied donating his entire estate "to the Lutheran Church, lock, stock and barrel," but Allen knew his family needed money.

Novell and Allen settled the claims against them shortly before trial, as did Berger Kahn LLP, where Allen worked before Buchalter. Stueve et al. v. Novell et al., 10-00411651 (Orange Super. Ct., filed Sept. 24, 2010).

Closing arguments are expected Monday before Orange County Superior Court Judge William D. Claster.