Norwich native Daniel Gordon, the former financial whiz kid who bilked Merrill Lynch out of $43 million, is back in business as a top executive for a New York City investment firm and is embroiled in a legal dispute with pro basketball star Eddy Curry.
The Associated Press reported Sunday that Gordon, whose $3 million mansion in Old Lyme was auctioned off to pay creditors in 2004, is now serving as managing partner of the privately held firm Rosedale Cooley & Co. and is living in an apartment on the Upper East Side of Manhattan.
Yet, according to filings in his three-year-old bankruptcy case, Gordon's financial dealings remain unclear.
Gordon's ex-wife Laura, a Norwich native whose maiden name was Lesnik, claims in documents that the 36-year-old convicted embezzler drew down more than $3.4 million on a line of credit that a separation agreement had said was forbidden to him, using some of the funds to lend $570,000 to Curry at what the basketball star claims was a "usurious" interest rate of 84 percent annually. Gordon's Las Vegas-based company, Allstar Capital Inc., was set up in a state that allows high-interest loans.
Gordon "wasted no time resuming his fraudulent behavior," his ex-wife said in a complaint related to her former husband's bankruptcy. A separate complaint, filed by the New York bankruptcy trustee, claimed that Gordon used Allstar Capital to effect fraudulent conveyances totaling more than $7 million in an attempt to keep money away from creditors.
Manhattan attorney Donald David, representing Gordon in his bankruptcy case, told the Associated Press that he is disputing the allegations made in court documents.
"To rely upon such allegations, and certainly to presume their truth, is inappropriate and reckless," David said in an email to the AP.
In addition to money sought by other parties, the Internal Revenue Service claims Gordon owes the government $44 million in taxes and interest related to his theft from Merrill Lynch. Gordon lists assets of only $10.8 million.
Curry claims that the high-interest loan that he defaulted on in September 2008 should be declared void because Gordon stole the funds and "proceeded to launder the theft through a usurious loan." A Nevada court had previously told the 7-foot NBA center - who earned a championship ring during the past season with the Miami Heat - that he had to repay Allstar Capital more than $1.2 million in principal and interest, according to The Associated Press.
Allstar Capital is the same company that in 2008 took over a $3.5 million mortgage on a 21-acre tract of land in Groton in a deal arranged by former Mashantucket Pequot Tribal Chairman Michael Thomas, who claims Gordon as a friend. Thomas, ousted as tribal leader two years ago after it was revealed that the Mashantuckets were on the verge of default, has been under investigation by the FBI for financial dealings related to the tribe.
Under the terms of a proposed Gordon bankruptcy settlement, the Groton property would be sold and most of the proceeds would go to Gordon's ex-wife and the bankruptcy trustee.
Gordon had been considered a 23-year-old wonder kid when he was named to head Merrill Lynch's energy-trading unit. The Yale University graduate made waves locally in his mid-20s after buying both Daticon, a Norwich-based document storage company that he purchased in November 2000 for $25.3 million, and Eastern Energy Group, a Norwich-based fuel business that he bought for an undisclosed price.
But he quickly fell under a cloud and in 2003 pleaded guilty to embezzling $43 million from Merrill Lynch by tricking the Wall Street investment company into transferring funds into an account he controlled. He was charged with wire fraud, money laundering and conspiracy.
Only after his arrest did it come out that Gordon had been expelled from the Williams School in New London in 1993 after hacking into the school's computer system to boost grades on his transcript.
Gordon was contrite when asked to address the court during his sentencing hearing.
"I will spend the rest of my life trying to redeem myself," he said at the time.
Cooperating with authorities, Gordon received a lighter punishment than normal, serving less than two years of a 3½-year sentence. He was released from federal prison in November 2007, spent four months at a halfway house in New York and three months in home confinement before earning his official release in May 2008.
Yet, according to his ex-wife's court filings, Gordon, by February 2008, already had been drawing down on a credit line to which he was not entitled. The New York Supreme Court ordered Gordon to pay her back more than $3.5 million, but, according to bankruptcy filings, the money has not been forthcoming.
Gordon also has fallen behind on child-support payments of $5,000 a month and spousal support of $2,500 a month, according to the complaint. Mrs. Gordon also contends that her ex-husband owes her about $150,000 in attorneys' fees related to her attempt to recoup money from the credit line she claims Gordon stole.
"It is all too clear that the plaintiff (Mrs. Gordon) was victimized by the defendant's deception and self-dealing," according to one complaint.
The Associated Press contributed to this report.