A former Washington County district attorney is entangled in lawsuits by investors in an allegedly fraudulent business scheme who claim his former clients induced some two dozen people to part with their savings.
The most recent case was filed Wednesday for Darren Burrow, a steel fabrication plant manager from Guernsey County, Ohio, who in 2017 gave Alternative Energy Holdings, a limited liability company, $100,000 from his retirement account. Similarly to lawsuits filed recently by other investors, Burrow’s case asserts he was guaranteed fast and lucrative returns on his investments in AEH – which had addresses in Ohio and Florida – but instead have yet to see any of that money.
Attorneys for Burrow, one of at least 23 total investors in AEH who purportedly never got their money back or saw returns, accuses AEH manager Jonathan Freeze of Geauga County, Ohio, and chief executive officer Kevin Carney of Robinson Township, Allegheny County – of failing to follow through on provisions of a membership agreement.
Burrow was supposed to get back the principal, plus $20,000, two months after he made a cashier’s check for the money out to them in August of that year, according to the agreement. He allegedly handed over the money at the recommendation of Freeze, his longtime financial adviser.
“Plaintiff Burrow did not receive the payments promised in the AEH Note at the end of the (60-)day period,” wrote his attorneys, “nor has he received any payments to date relating to his investment in the AEH Note, despite repeated requests to (Freeze).”
The same month Burrow turned over most of his retirement savings, Freeze, who was a registered stockbroker for more than two decades, was consenting to being permanently banned from the securities industry. He refused to cooperate with an investigation by the Financial Industry Regulatory Authority, a body set up in an attempt by the securities industry to police itself.
In 2015, Freeze was suspended for 10 days and fined $5,000 by FINRA because he borrowed money from a customer.
The various plaintiffs’ attorneys are Scott Lane, Alice Stewart and Michael Nagy.
The lawsuits name two Washington County lawyers – Steve Toprani, who was District Attorney from 2008 to 2012, and his colleague Michael Hammond – who represented AEH’s officers for a time.
The lawsuit accuses the two lawyers of failing to disclose “red flags” – including Freeze’s run-ins with FINRA, Carney’s 2016 guilty plea to charges of grand theft and forgery in Geauga County, Ohio, his home county, and signs of fraud on the part of AEH – that “a reasonable attorney in the same circumstances” would have discovered.
“I obviously don’t have the complaints in front of me, but I believe them to be materially false,” Toprani said Friday.
The suit names Dodaro, Matta & Cambest, the firm where they were working, and DMC Bradley, a joint venture of DMC and another Canonsburg law firm, as defendants.
Asked about specifics of the allegations, Toprani said he had to be careful about confidentiality when discussing former clients. He said he was “not familiar with Mr. Freeze’s background.”
As for Carney, Toprani said “I really can’t speak to that relationship at this point, but I’m not familiar with him.”
He said he hadn’t “represented any of the parties” in the lawsuits in “probably at least two or three years.”
Toprani left DMC in the spring and became general counsel for W.G. Tomko. He said his departure was a matter of pursuing different opportunities and unrelated to events at issue in litigation.
Burrow’s claims match those of four other people – Donald Porreca, 75, of Raleigh County, W.Va.; Ryan Seifert, 32, of North Carolina, who lived in Canonsburg during the period at issue; Michael Geller, 56, of Canonsburg; and Ronald Schmeiser, 89, of Pittsburgh – who are suing the same defendants, plus Robert Irey, another manager of AEH.
Irey didn’t return a message left at his company, the Irey Group. Valid phone numbers for Carney and Freeze couldn’t be located immediately Friday.
Irey was previously married to Washington County Commissioner Diana Irey Vaughan.
He now lives on the same street in Robinson as Freeze does, according to court papers. Irey and Freeze allegedly solicited at neighbors to invest in their company when they lived in the same Canonsburg apartment building.
With Carney, they allegedly started seeking investments in June 2016, around the same time as Carney’s indictment on the charges that later led to his guilty plea in Ohio. Late in May, AEH had entered a joint venture agreement with an entity called D4 Energy Group, whereby AEH would help fund alternative energy plants.
The AEH officers ostensibly expected the first plant in Greenville, S.C., to be fully operational by the end of this year. Some investors were allegedly told $130 million or more had already been secured for the project.
“Carney and Freeze represented to (Burrow) prior to his investment that his investment would be used as ‘seed money’ for operations and that Defendant AEH had fuel contracts ‘worth millions of dollars’ with some of the world’s largest energy companies, including BP, and that he would be repaid from the ‘up front’ payments by those companies,” according to Burrow’s lawsuit.
The contracts evidently didn’t exist. AEH is now classified by the state of Florida as being in “administrative dissolution.”
By early 2017, investigators began to complain they had not received payments, so Carney began providing periodic “updates” to placate them. Meanwhile, Toprani and Hammond allegedly helped to assure clients the scheme was legitimate. Investors like Burrow now also accuse the lawyers of intimidating them by threatening legal action against investors.
Joseph Luvara, the Pittsburgh attorney representing Toprani, Hammond, DMC and DMC Bradley, didn’t return a message Friday.