Investors sue Florida attorney, allege $150 million PE fund theft scheme

A Florida attorney and his alleged co-conspirators face claims they stole approximately $150 million from private equity fund investors through a years-long fraud scheme. 

A group of investors filed a federal lawsuit on February 2 against David J. Feingold—described in the filing as a Florida businessman and Florida-licensed attorney—and nine other individuals, accusing them of orchestrating an elaborate conspiracy to hijack, divert, and commingle assets from three private equity funds: L3 Capital Income Fund, LLC, L3 Capital Hotel Fund, LLC, and L3 Capital Special Opportunity Fund, LLC. 

The case, filed in the U.S. District Court for the Southern District of Florida, paints a troubling picture of fund managers who allegedly turned on the very investors who trusted them with their retirement savings. 

According to the lawsuit, the L3 Funds are private equity funds that purportedly raised money from investors to invest in various investments including merchant cash advance portfolios, land infrastructure projects, debt settlement businesses, restaurants, home developments, four hotels, and two specific outparcels of land for commercial real estate development. But plaintiffs allege that Feingold, who was instrumental in developing and structuring the L3 Funds and served as a co-managing member, took undisclosed fees and commissions while owning, managing, and/or controlling many of the underlying investments and/or the entities operating the business lines—all unbeknownst to investors. 

The lawsuit describes what it calls an "excessively complicated investment structure and ongoing deceptive scheme" allegedly designed to allow Feingold and his alleged co-conspirators—Michael Dazzo, Richard Cardinale, Joseph Baldassarra, Steven Baldassarra, Todd Sanders, Daniel Amaniera, Ford Elliott, Josh Howard, and Carlos Salgado—to improperly seize control over investor funds and assets, line their own pockets, and unjustly enrich themselves and entities they own and control. 

The plaintiffs allege that Feingold, Dazzo, Sanders, Amaniera, and Cardinale siphoned away at least $24.6 million to bank accounts controlled by them without investors' knowledge or permission. Investments were then allegedly transferred to entities including Broadstreet and the Blackstream Entities, while investors were actively blocked from receiving returns. 

A demand letter dated October 24, 2024, outlined the amounts allegedly owed: $79,094,089 in outstanding investment plus $23,087,137 in interest for the Income Fund (totaling $102,181,226); $47,100,000 in outstanding investment plus $1,912,500 in interest for the Hotel Fund (totaling $49,012,500); and $17,000,000 for the Special Opportunity Fund—for a combined total of $168,193,726. 

The human cost outlined in the filing is striking. Lead plaintiff Anthony Siriani, described as an 81-year-old former business owner and Vietnam veteran of the United States Army who retired in South Florida, alleges he was forced at 80 years old to sell his home and move his wife and himself into a much smaller home because they are no longer receiving the retirement income from the money they invested in the L3 Funds. The filing states he is now looking into re-entering the workforce. Another investor, Dr. Patrick Ciccone, died on September 19, 2023, at the age of 82, while waiting to recover his invested funds, and his estate cannot be closed until the matter is resolved. 

The lawsuit brings claims including conversion, civil theft, violations of the Securities Exchange Act of 1934 (15 U.S.C. § 78j) and Rule 10b-5, violations of the Florida Deceptive and Unfair Trade Practices Act, fraud, racketeering in violation of 18 U.S.C. § 1964, negligence, and civil conspiracy. 

The case remains in its early stages, and no determination has been made on the merits of the allegations.