A lawsuit filed over a series of investments that include $20 million invested in the IEAH racing stable has been ordered to mediation by a federal district court in North Carolina.
The suit was filed in U.S. District Court in North Carolina on behalf of Matthew J. Szulik, as the trustee of various family trusts, and claims that money manager James Tagliaferri and other defendants defrauded the plaintiffs out of about $60 million as a result of the investments.
Included in the investments made by Tafliaferri’s TAG Virgin Islands entity was a $20 million invested in IEAH. Szulik contends that the defendants, which also includes Tagliaferri’s company, Patricia Cornell, and attorney Barry B. Feiner, "were able to hide their illicit activities by providing fraudulent, inadequate, and incomprehensible documentation to the Szuliks and to the financial institutions which acted as custodians" of the family’s accounts.
In addition to IEAH investments, the suit lists TAG investments in securities in other entities, including Conversion Services, Protein Polymer Securities, and property in a Nevada partnership. In all, the suit contends the total of $60 million in such investments was approximately half the total in the Szuliks’ investment portfolio.
As a result of the decision by the court to send the case to mediation, the next steps in the lawsuit will be argued in private.
Unlike arbitration, in which an independent third party hears both sides of a case and renders a decision that is binding, mediation is a non-binding form of dispute resolution in which a third party works to achieve an outcome acceptable to both parties.