Facts

Mr. Gilbert is an accountant. Ms. Goldblatt came to him for investment advice of her life savings of $880,000. Mr. Gilbert advised Ms. Goldblatt to take her money out of Solomon Smith Barney and invest it with Financial Advisory Consultants owned and operated by James Lewis. FAC was the oldest and largest Ponzi scheme in the country. Mr. Lewis had taken over 2,700 investors for more than $160 million. Ms. Goldblatt lost her entire life savings and retirement.

PLAINTIFF'S CONTENTIONS:
Plaintiff contended that Mr. Gilbert breached his fiduciary duty and was in league with James Lewis to defraud Ms. Goldblatt out of her money.

DEFENDANT'S CONTENTIONS:
Mr. Gilbert claimed that he was also a victim of the Ponzi scheme and that Ms. Goldblatt came to him with the idea to invest in FAC.

Settlement Discussions

Mr. Gilbert offered Ms. Goldblatt $5,000 during a settlement conference.

Damages

Ms. Goldblatt lost her entire life savings and retirement.

Result

Settled the day of trial for $150,000. The settlement involved an initial payment of $10,000, and the balance to be paid in one year, secured by a deed of trust.

Other Information

Mr. Gilbert did not carry E&O insurance. Mr. Lewis was convicted of RICO violations and is serving a 30-year sentence in federal prison. According to defendant, Mr. Gilbert also lost his entire life savings and retirement as a result of the Ponzi scheme. The fraud allegations were dismissed by demurrer.