DA Investigates Claims $40 Million Business "Stolen" With Forged Contracts

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What's more, even though the prospective investor had only filed a claim for 50% ownership of one business, Caring Home Care, the arbitrator awarded him 100% ownership, more than $2 million in cash, and claims against a second Persaud business, records show.

[Black Star News Investigation]

Businesswoman Says American Dream Turned to "Nightmare"

Part One of a Series

Following inquiries by The Black Star News, the District Attorney in Queens County has confirmed that his office is investigating allegations by a Guyanese immigrant that forged signatures on contracts she never signed were used to wrest control of her multi-million dollar businesses by a money lender who was at one time a prospective partner.

The immigrant, Christine Persaud, who's in her 40s, says she never signed partnership agreements with the prospective partner because of several clauses she didn't like in the proposed agreement, including one in which the money lender wanted future disputes to be arbitrated before an individual who had done some work for him in the past.

"Why would I sign a contract where someone says disputes should be taken to someone who has done some work for his family in the past?" says Persaud. She says control of her businesses, which brought in more than $10 million annually, was fraudulently snatched from her.

What's more, even though the prospective investor had only filed a claim for 50% ownership of one business, Caring Home Care, the arbitrator awarded him 100% ownership, more than $2 million in cash, and claims against a second Persaud business, records show.

"They don't even have original copies of these alleged contracts I signed," Persaud adds, referring to the documents used at arbitration to take away her businesses. "I challenge them to produce them so a forensics expert can review them."

"This is robbery," Persaud says, in an interview with The Black Star News. "I will not stop fighting until I expose the robbery and get my businesses back. This can't be allowed to happen in America. They are trying to turn my American dream into an American nightmare," she says, adding that she reported the alleged forgeries to the DA's office a year ago and provided documentation to Jonathan D. Scharf, an assistant district attorney in the Economic and Environmental Crimes Bureau.

She says her former finance manager also misappropriated nearly $200,000, according to an accountant Persaud hired; this manager is now working for the money lender who now controls the businesses Persaud founded.

"There is an ongoing investigation into the Christine Persaud case," says Helen Peterson, spokesperson at DA Richard Brown's Office, when asked about Persaud's allegations of the use of forged contracts to steal her business. "But it would be inappropriate to comment at this time."

Peterson declined to say whether the DA's office had already interviewed Persaud, the forensics expert who compared her signatures to those on the contracts, or any of the lawyers who have handled the case for her. "I am ready and willing to cooperate with the District Attorney or the U.S. Attorney," Persaud says.

Persaud estimates that her three businesses, which she built from scratch, are worth over $40 million. Caring Home Care, which provides nursing and home care services for the elderly, sick people, or those incapacitated, was founded in 1997. Persaud later started Liberty Home Care, as the business expanded, and Christine Nursing Center, for training home care
and nursing aides.

She says she now regrets the day she placed an advertisement in The New York Post in 2007, seeking payroll funding for Caring Home Care. Through the ad placement, she was introduced to a businessman named Abraham Klein.

Even though Caring alone brought in almost $9 million a year, payments for her clients took several weeks; in the meantime there was pressure to meet bi-weekly payroll, she says.

Persaud, a single mother, says at the time she was introduced to Klein, she had a new born --she now has a two and a half year old, and six month old twins, born by a surrogate mother-- so much of the negotiations for the payroll funding was done between Klein and Melquisedec Escobar, Caring's financial manager, a Philippines native whom Persaud sponsored for work papers, records show.

Klein agreed to fund the payroll, retaining 66% of the profit after all expenses cleared, while Persaud got 33%. Some financiers familiar with this line of business say these terms were overly-generous in Klein's favor.

Persaud says things initially went smoothly so she and Klein started negotiating a possible 50/50 partnership in Caring, which had about 300 employees. In addition to the payroll funding, Klein injected $100,000 as down payment on the proposed partnership, Persaud says. Since the health care industry is highly regulated, the partnership was contingent upon
Klein getting licensed by the State Department of Health, Persaud says.

However, if Klein wasn't licensed by the DOH within two years, then his $100,000 would be returned, with a 4% interest, Persaud says, and a copy of the proposed partnership agreement she says she never signed, shows.

Klein then brought his son Joel Klein and brother in law, Philip Gottehrer, to work at Caring, at his own expense, Persaud says. "I did not know they were planning to take my businesses," she says.

Persaud claims even Klein's attorney, Mendel Zilberberg, of Mendel Zilberberg & Associates, P.C., knows that the agreements enforced at arbitration were forgeries because she and an attorney who represented her during the negotiations, Samuel Rieff, had gone to Zilberberg's office at one point to sign the papers; she says she ultimately declined when Zilberberg wouldn't remove the terms she objected to.

When contacted by The Black Star News, Zilberberg declined to speak and through a spokesperson said: "We don't comment about ongoing cases." Through the spokesperson, he also declined to have questions submitted via e-mail message.

Persaud says her dispute with Klein began when he approached her in October 2008, for a $7 million line of credit through Caring Home Care, to finance expansion of a business he said he operated in China. Since she knew nothing about the business, she declined, she says.

A few months later, she learned that Klein had contacted some of her clients and identified himself as Caring's owner, she says. When she objected, he sent her a letter asking that the pair appear before the arbitrator named by Klein in the proposed contract, she says. "I was shocked when I then received the letter. I would have been happy to return his $100,000 with interest. He was not a partner or owner."

Klein has claimed the parties had signed one of the agreements on May 11, 2007, court papers show.

Rieff, the lawyer who represented Persaud during contract negotiations with Klein, later submitted an affidavit dated April 20, 2009 stating that he represented her and Caring Home Care through the end of 2008, during which time she never signed a partnership agreement.

"I was still negotiating terms of a proposed Agreement after May 17, 2007. These negotiations lasted an additional several months without an Agreement being signed," Rieff, the lawyer who represented Persaud, wrote in his affidavit.

Rieff, when contacted by The Black Star News on April 28, 2010, declined to comment about his affidavit, saying: "I don't represent her any longer and I don't comment to the media. I'm not going to answer any questions."

At the time the dispute started, Persaud had also hired another lawyer, Queens-based Eugene Levy, to handle Klein's attempt to take her to the arbitrator, Marvin Neiman, of Neiman & Mairanz, P.C., in Manhattan, whom she says Klein had proposed.

Neiman did not return a telephone message from The Black Star News seeking comment.

Levy had raised questions about the arbitration clause on what Persaud maintains was merely a proposed contract, records show. That section, referring to Persaud and Klein, said that the "parties acknowledge that Mr. Nieman represented some members of the Klein family in the past and hereby waive any conflict of interest." In yet another version of what Klein claims was also a signed document --and Persaud refutes-- the arbitration clause states that the "members acknowledge that Mr. Neiman may have represented some members of the Klein family in the past, and thereby waive any conflict of interest."

"Who in her right mind would sign a contract with that kind of language?" Persaud says. "I'm not that stupid."

Levy, the Persaud attorney wanted the issue addressed. "Unless there is a full disclosure as to your firm's representation of the Klein family we again strongly object to any 'arbitration proceeding' being held," Levy wrote to Neiman, in a letter dated March 17, 2009, and added, "There are serious jurisdictional and ethical issues involved in these contemplated
proceedings. Until the jurisdictional defects of this arbitration have been resolved our client does not submit to the authority of your office as arbitrator."

Nevertheless, in a letter dated March 18, 2009, Neiman countered: "I have reviewed the contents thereof and discovered that the statement in the arbitration clauses of the parties' agreement, that I represented members of the Klein family was incorrect as related to the Klein family in this matter, and was based on a similarity of names with former clients of
mine, so that when the issue was broached to me to serve as arbitrator in this matter, I informed the parties that I believed that I represented the Kleins in the past and that this should be known to all of the parties at the time of the execution of the agreement."

"So first he had represented the Klein family then, after my lawyer objects, suddenly he discovered that he had not represented Abraham Klein's family but another Klein? Who can believe that?" Persaud says.

Neiman also warned Levy in his letter that "if your letter is meant to convey to me that you will default in appearing at the arbitration, please be advised that you do so at your client's peril. The matter will proceed tomorrow as scheduled."

The records show that the arbitration hearing did proceed the next day, on March 19, 2009, at the offices of Neiman & Mairanz. In attendance were Neiman; Abraham Klein and his attorneys, Mendel Zilberberg, and Marvin L. Tenzer, of Tenzer & Lunin, LLP; and, by telephone was Paul Salazar, also of Zilberberg's firm.

The records also show that Zilberberg had asked that the transcripts be sealed. Persaud and her attorney Levy, who had challenged Neiman's qualification to be a neutral arbiter, were not there.

In addition to being awarded control of Caring, the most lucrative of Persaud's three businesses, Klein was also awarded $2,172,607.58, which he claimed he was owed by Caring even though he testified that he had put in about $800,000 in Caring and about $180,000 in Liberty Home Care, records show.

Klein was also awarded 50% claim on Liberty Home Care; he told Neiman during the arbitration that Persaud had also verbally agreed that he would be a partner in Liberty.

"Liberty was not even part of the dispute," Persaud says. "Klein loaned me about $150,00 to launch Liberty when things were still going well. There was no partnership agreement for Liberty because it was a loan. But Neiman gave him Liberty too, without even the benefit of a forged contract," Persaud says. "At least Caring was taken away with forged contracts. This is not nice."

During the arbitration, according to the transcript, Neiman had asked Klein how the money he said he took from Caring to give Persaud, for Liberty, was accounted for, the record shows. Neiman said, "if the money came out of Caring, how is it recorded on Caring's books? Is it recorded as an accrual of your--as a reduction of your liability or is it recorded as investment from Caring?"

"I don't exactly know" Klein had responded.

At the arbitration, three documents were presented as constituting the partnership agreement.

The Black Star News has reviewed copies of the disputed documents. None of the three documents' signature page refers to an agreement between Klein and Persaud; but rather, Persaud and "X1". Presumably the signatures next to "X1" belongs to Klein.

On the final page of one of the documents, "Minutes of Meeting of Board of Directors of Better Hope Home Care Agency, Inc." the typed entity above Persaud's purported signature is identified as "Better Hope Home Care Agency, Inc" and not Caring Home Care.

Even Better Hope is then crossed out with a pen and substituted with "All Borough Community Home Care Inc." Then, there's a signature Persaud maintains is not hers; and there is a signature next to "X1"; presumably Klein's. The space underneath "Attest," presumably where a witness would have signed, is blank. There is no date; there is no notary stamp or

What's more, the three signatures attributed to Persaud, in the three different documents, all look different from each other. "Maybe they were forging by committee," Persaud says.

Robert F. Bey, president of ALR Forensics, in Rockville Centre, New York, examined the three documents against samples of her signature provided by Persaud and wrote, in a report dated May 11, 2009, that the "range of variation" in
the signature on the documents "contains some significant differences" compared to Persaud's known handwriting, he said.

He concluded, after reviewing additional Persaud signatures that it was "probable" that Persaud was "not the author of the signature" on the documents.

Bey also wondered, in an interview, why no originals of the three documents exist. "These are pretty important documents I must say--all of a sudden all three of them disappear and we just have copies? That's not logical to me."

"There are some indications in the questioned signatures that there may be some hesitation; maybe some slow writing which would be indicative of a forged signature," he said.

Bey, has been subpoenaed by Klein's attorney, Zilberberg, to produce the notes of all the work he's done on behalf of Persaud, on May 18, 2010 at Zilberberg's offices. He said when he asked Zilberberg about originals of the disputed documents, he was told they would be produced if needed.

Separately, Persaud says she informed the Department of Health (DOH) about the alleged fraud but that officials she spoke with took no action. Since Klein wasn't licensed by DOH, Neiman granted him power of attorney to sign Persaud's name, on documents that required DOH licensing, and for anything that he required to operate Caring.

"I'm sorry, but at this time we at the State Health Department will not be able to comment on the questions you have raised about Caring Home Care," said Tom Allocco, a department spokesman, when told by The Black Star that Persaud's allegations about the forged contracts was being investigated by the DA in Queens County.

With respect to the licensing, the Public Health Council had approved a change in Caring's ownership from Persaud to Caring LHCSA, LLC dba Caring Home Care "with Abraham Klein as the sole member of the LLC." He declined to comment when asked how the DA's probe might affect the matter. "How can they make such an approval based on fraud and while my case has now been appealed?" Persaud says.

After the March 19, 2009 session before Neiman, he returned his ruling in Klein's favor on March 31, and Klein moved  to have the award confirmed in State Supreme Court in King's County. A hearing date of April 17 was set before Justice Arthur M. Schack.

On April 15, Levy, the Persaud attorney, left a message on the voicemail system in Zilberberg's office, which was closed for Passover observance, asking for an adjournment because he had another case to handle on April 17.

On the day before the hearing before Judge Schack, Levy had his secretary April Fischer, fax an affirmation of actual engagement to the judge's chambers stating that Levy was arguing another case, Pena vs. Occhiogrosso, on April 17, in State Supreme Court in Queens. (It later turns out that Levy had made a mistake; the proper title on his case was actually Pena vs. Pena, a matrimonial matter, on that same date before Judge Sidney Strauss, Index 025075/2006, records show).

Fischer later filed a sworn affidavit stating that she spoke with a member of Judge Schack's staff and was told that the proceeding would be adjourned until June 19, 2009.

Records also show that Zilberberg knew of Levy's request for an adjournement by the morning of April 17; he told his secretary to inform Levy that he was declining.

So, on April 17, 2009, the hearing did proceed before Judge Schack; a judgment was entered on default. Schack later wrote that Levy's affirmation of actual engagement had been defective because it had the incorrect case, no caption, and it didn't provide the name of the judge on the case.

Levy filed a motion to have the default vacated, with corrected papers; Judge Schack declined.

"So I lost my business, twice, without even having my day in court," says Persaud. "Why are they afraid of the evidence? Why not let it be decided on its merits through a trial?"

The Black Star News did not get a response to questions sent via e-mail message to the Unified Court System's spokesperson.

Persaud believes that Klein was assisted in seizing control of her business by Melquisedec Escobar, her former financial manager. She says an accountant discovered that Escobar, who wrote an affidavit claiming that he witnessed Persaud signing a partnership agreement with Klein, had allegedly embezzled at least $191,573 from Caring and Liberty. "Based on
the results of our examination, these actions, if proved in a court of law, could constitute a violation of criminal and/or civil law," the certified public accountant, Ibe Moses Nwankpa, wrote in a report dated March 19, 2009.

According to the accountant, Escobar had been authorizing checks and withdrawal slips to himself. The accountant wrote that Escobar had allegedly diverted $45,073 from Caring; $125,000 from Liberty; and an additional $21,500 were payments made to himself through an account he opened at Citibank, Liberty Ave., Richmond Hill, N.Y., 11419, under the name Mel Escobar/Caring. Most of these alleged thefts occurred between January 2007 and December 2008, the accountant wrote.

Nwankpa did not return a phone message seeking comment from The Black Star.

Escobar was made monitor at Caring by Neiman, and given a raise; he now works for Klein at Caring. Separately, Rabbi Jacob Spitzer, who is heavily involved in healthcare issues, was made the receiver shortly after the Neiman award.

"I don't know about it. You have to speak with our lawyer," Escobar said, when contacted by The Black Star News by telephone and asked about Persaud's allegations that her signatures had been forged on the contracts.

When reminded that he had signed an affidavit dated April 14, 2009, submitted to State Supreme Court in King's County in support of Klein's motion to have the Neiman award confirmed, he said, before hanging up the phone: "I don't know what you're asking. Goodbye."

Persaud says Escobar had been able to use her signature without her knowledge because he had once had her sign a one-page power of attorney, so he could handle Caring's taxes with the Internal Revenue Service. She says when she discovered the alleged Escobar thefts, she wrote to the Department of Homeland Security's U.S. Citizenship and Immigration Services on April 20, 2009, asking that Escobar's work papers be revoked.

Homeland Security wrote back on April 29, 2009 to inform Persaud that Escobar's work visa had been revoked, the record shows.

"Then I got a contempt order from Judge Schack saying I should have Escobar's work status restored within 24 hours," Persaud says, adding that she did not comply. "I thought the right thing to do is to report a theft."

"This judge is totally against me," Persaud said. "I don't know why he won't recuse himself. Don't I have any rights?"

During a recent hearing in his chambers, in the presence of Persaud and the opposing counsel Judge Schack noted that Persaud had filed a complaint about him so everything would now have to be done by the book, she said. He was referring to a letter a friend wrote on her behalf, complaining about the judge to Ann Pau, the chief Administrative Judge, New York Unified Court System, Persaud said.

Persaud has been holed up at Liberty Home Care since Klein took total control of Caring a year ago. She says in the last few weeks, Klein's attorneys have been garnishing money from Liberty's clients --even though Neiman had awarded him a 50% claim and total control was to revert to Persaud once Klein was in control of Caring, which is now the case. She says Klein has been sending letters to Liberty's clients, garnishing funds for services that her workers have already performed.

One of the notices to garnishee that Persaud says is being sent to Liberty's clients bears the letterhead of a City Marshall in Queens, Bruce Frankenberg; with Christine Persaud, and Caring Home Care Agency, as the debtor; Abraham Klein, as the creditor; and, Mendel Zilberberg & Associates, as attorneys for the creditor.

Persaud says if Judge Schack ordered an accounting, the records would show that Klein has more than recovered the $2,172,607.58 "wrongfully awarded" to him, through Caring's revenue. "There was $2.5 million in receivables when the business was taken from me, which more than pays for the gift Neiman gave to Klein," Persaud says. "Why is Judge Schack still allowing Klein to divert my clients when he should have no more interest in Liberty Home Care?"

Neiman's March 31, 2009 decision and award states, "..at such time that Klein is approved as the operator of Caring by the agencies with jurisdiction, Persaud shall then become the owner of Liberty free and clear of any equity claims of Klein therein."

It's unclear under what jurisdiction or authority that Klein continues to interfere with Liberty's business, Persaud says. "He places illegal garnishes on money due to Liberty," she says. "He is making me more determined to expose the truth."

Another attorney who is working on Persaud's case, Lawrence E. Kaye, says, of Schack, "The judge is essentially punishing her for the mistakes of her lawyer."

Persaud says the year-long tussle with Klein has ruined her health. She says since having intestinal surgery last July, she hasn't been able to heal due to the stress. Persaud takes 650 milligrams of Percocet (oxycodone) every four to six hours, to deal with acute severe pain. Still, even though her doctor, Usukumah E. Usukumah, wrote a note on May 10, 2010, Judge Schack has ordered Persaud to appear for deposition before Klein's attorney Zilberberg, who is seeking to uncover assets; the deposition, which started last week, continues tomorrow at the court house in King's County.

Dr. Usukumah, an obstetrician and gynecologist, wrote that "the medication, a narcotic, will definitely interfere with her sensorium and ability to rationally reason. She should be excused from any legal responsibilites until she is clinically well to do so."

In the meantime, another attorney, Stephen Preziosi, filed an appeal on May 3, 2010 to the Second Department, seeking a reversal of Judge Schack's refusal to vacate his confirmation of the Neiman award to Klein.

"He issued a default judgment saying the other side didn't show up when the other side had sent a sworn statement saying I'm engaged in the court room," Preziosi said. "Generally any judge or another attorney would extend the courtesy to
another attorney saying 'okay, you're engaged in anther case, okay so we'll adjourn. We'll put it over to another date when you can be here and litigate on the merits rather than find by default.' Default judgments are frowned upon by all the courts in New York. The courts prefer to judge and decide cases on their merits based on the arguments of both parties not by
default. That's right out of the case law."

Persaud is popular in the Richmond Hill, Queens, neighborhood where she runs her businesses and a few years ago, she started a food pantry, handing out groceries to needy families every Friday afternoon, in front of her business. She says in the beginning, about 20 people showed up; now she hands out food to about 500 people each Friday afternoon.

Last Friday, several of these families showed up to demonstrate in her support, with some men and women on wheelchairs, holding signs that read "Hands off Liberty," and "Stop Feasting On Other People's Labor."

Persaud said: "I don't know how I can help them if they steal all my businesses."

The Black Star News is an investigative newspaper. Please send e-mail messages to milton@blackstarnews.com or call (212) 481-7745 if you have documentation about cases that need to be investigated.

"Speaking Truth To Empower."

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