1 – Summary:
Paul Adler along with his brother, Robert, (and an individual not related to the Adler family, Rose Marie Pelatti), are defendants in a lawsuit brought by their brother Lawrence Adler and their three sisters, Arlene Adler, Judy Adler and Elizabeth Adler Scaccio.
It is alleged that on multiple occasions Robert Adler and/or Paul Adler stole, or in the alternative, borrowed money from Thelma Adler, the Estate of Harry Adler, or other Trusts and Family Entities and did not document these transactions with the Family Entities.
The lawsuit claims the total amount due and owing to Plaintiffs amounts to at least $10,981,911.
2 – Background:
Paul Adler was the chairman of the Democratic Party organization in Rockland County when he was charged with public corruption after prosecutors said he had enriched himself by almost $375,000 through a series of real estate transactions tainted by fraud, bribery and extortion.
Recently, the impending lawsuit against him by family members was presaged in a amazingly frank and personal Facebook post by Larry Adler in September 2018 (see images below). The lawsuit subsequently appeared on the Rockland County Clerk’s website in December 2018.
In the Facebook post dated September 5, 2018, Larry Adler speaking presumably about his father and his brothers Paul and Robert wrote:
“In an effort to continue to honor him, his known desires, and his legacy – and after more that a year of patience, discussions, and pleas with our brothers – my sisters and I will be pursuing legal justice against our brothers Robert and Paul for their actions against our mother, family entities, and us.
Dad (and Mom) would be sickened to know what his two older boys did – and didn’t do – for their mother and family in his absence. He would be shaken to his core to hear their words that ‘what they did was morally questionable but legally ok’.
In our recent times, where more and more people are standing up for themselves and others that have been wronged … and where the truth is disregarded, we are not going to be bullied or quieted about the truth.”
3 – Paul Adler And The Palisades Mall:
Federal prosecutors accused Mr. Adler of having threatened local politicians with the loss of their jobs if they did not cooperate with him on several deals, including one involving the controversial and gigantic Palisades Center mall in West Nyack.
In one secretly tape-recorded conversation, he argued that he had not assumed the party chairmanship to ”lose money,” said Mary Jo White, the former United States Attorney for the Southern District of New York.
”If you can’t help your friends, then why get into some of these positions?” Mr. Adler was quoted as saying in an eight-count complaint filed against him.
Adler eventually spent time in a federal prison and has since returned to the real estate business in Rockland County.
4 – The Lawsuit:
So what is it that Paul and Robert Adler are accused of doing that caused their brother to indicate he and his sisters will not longer be “bullied or quieted about the truth”?
The lawsuit states that Paul and Robert managed their father’s (Harry) estate after his death and until their mother’s (Thelma) death and they also managed various trusts that were set up by Harry’s will.
Here are a few of the allegations in the lawsuit as described in the paragraph numbers as noted below …..
57 – At Harry’s death, the HATRT (trust) owned the following assets:
100% of stock of 303 Erie Street Realty Corp., a New York Corporation and Family Entity
Property at 16 – 18 Bobby Lane West Nyack, NY 10994
64 – In December 1995, the stock of 303 Erie Street was sold to Pyramid.
65 – The proceeds of sale of the stock equaled approximately $3.25 million.
66 – The stock sale proceeds were due to be paid over to the Remainder Trust.
67 – The stock sale proceeds were not paid over to the Remainder Trust.
68 – In December 1995, the Bobby Lane Property was sold to Pyramid.
69 – The proceeds of the sale of the Bobby Lane Property, approximately $500,000, were to go to the HARTR (trust), however Robert and Paul caused an unearned “commission” to be paid to Paul from the proceeds of the sale.
The Unauthorized Transactions:
73 – Shortly after Harry’s passing, Paul Adler and Robert Adler began to misuse, misappropriate, and/or convert assets of the Trusts, and Thelma Adler personally, by forming various commercial entities (the “Non-Family Entities”) and using these assets for their personal benefit or the benefit of their family members.
74 – At the time of formation of the Non-Family Entities, Robert and Paul were in the fiduciary relationship with the Thelma Adler and the beneficiaries of the HAT, HATUCT, HATGST and HATRT and other Family Entities, which required Robert and Paul to act in the best interest of the Trusts, including growing in investing the principal to produce income for the benefit of the beneficiaries.
75 – Additionally, at the time of the transactions, Robert Adler held a Power of Attorney for Thelma Adler.
76 – Robert used the power of attorney granted by Thelma to make transfers from her to himself and/or caused the transfers of money.
77 – The use of these funds did not benefit Thelma Adler personally, or the beneficiaries of the Estates, Trusts or other Family Entities.
78 – Moreover, Paul and/or Robert did not request or obtain a majority vote to authorize the use of the funds pursuant to the terms of Harry’s Will for any of the transactions appearing below.
The Non Family Entities:
79 – Paul and Robert formed the following Non-Family Entities of which they are each 50% owners:
a. Harry A’s Estate Corp.
b. Let’s Lease Associates / Let’s Lease Group, LLC (“Let’s Lease Group)
c. RRIS, Corp.
80 – Harry A’s Estate Corp., was created on or about March 11, 1994.
81 – In order to fund the purchase and operation of a commercial property located at 50-56 Snake Hill Rd., West Nyack, New York, Robert and Paul took the following funds from the name persons and entities:
(Three sources of withdrawal are indicated in the lawsuit with a total of six withdrawals amounting to a total taken by Robert and Paul of $565,968).
82 – Despite contributing all of the required equity for the purchase of the property, and despite supporting most, if not all, of the development and/or operational costs, none of the Estates, Trusts or Family Entities own any interest in Harry A’s Estate Corp.
83 – Most of the transactions were taken in 1994, however, most of the amounts repaid did not occur until 2010-2012 approximately 16-18 years later.
84 – $719,932 has been repaid.
85 – Additionally, despite already owing money to Trusts, Estates and Family Entities, Robert and Paul refinanced the property, took the proceeds and used it for their own benefit.
86 – If Robert and Paul classify the funds they took as loans, Robert and Paul owe ….. interest and unpaid principal.
88 – Using the statutory 9% interest rate running from the date of the taking, Robert and Paul owe at least $342,987 in unpaid interest and at least $405,212 in unpaid principal.
(The lawsuit then speaks about the Let’s Lease Group)
89 – Let’s Lease Group was created on or about January 29, 1998.
90 – In order to fund the purchase and operation of four parcels of property across from the Palisades Center located at 11 – 21 Bobby Ln., West Nyack, New York Paul and Robert took the following funds from the named persons and entities:
(Six sources of withdrawal are indicated in the lawsuit with a total of twelve withdrawals amounting to a total taken by Robert and Paul of $1,690,000)
91 – Despite contributing all of the required equity for the purchase of the property, and despite supporting most, if not all, of the development and/or operational costs, none of the Estates, Trusts or Family Entities own any interest in Let’s Lease Group.
92 – Most of the transactions were taken …. in 1998-1999.
93 – $669,167 has been repaid.
94 – Additionally, to make up the remainder of the purchase price of the property held by Let’s Lease Group, Robert and Paul mortgaged the property to three of the sellers.
95 – Robert and Paul then caused the HATRT (trust) to take an assignment of the mortgage, with a principal amount of $390,458.
96 – Robert and Paul then did not honor the terms and commitments of the assigned mortgage, and did not make the required monthly payments to the HATRT, therefore causing further damage to the HATRT.
97 – Moreover, in negotiating the lease of the property, Robert and Paul did not disclose that the purchase of these properties were not for the benefit of Family Entities or for the benefit of the beneficiaries of the family Trusts.
98 – Robert and Paul used the same attorney that represented the Family Entities and Trusts in their sale with the same individuals and company.
99 – Upon information and belief, this façade misled a tenant into believing that the benefit of the transaction was for the Family Entities or Trusts, and thus that the transactions were authorized.
100 – If Robert and Paul classify the taken funds as loans, Robert and Paul the persons and entities … interest and unpaid principal.
101 – Because Robert and Paul did not document the loans indicating the amount taken, the interest rate and the correct application of payments, the full amount of unpaid interest and principal cannot be determined without an accounting.
102 – Using the statutory 9% interest rate running from the date of the taking, Robert and Paul owe at least $2,019,002 in unpaid interest, based upon a 9% interest rate running from the date of the “loan” and at least $1,525,458 in unpaid principal.
The lawsuit continues in part:
AS AND FOR A FIRST CAUSE OF ACTION (AGAINST PAUL AND ROBER ADLER FOR CONVERSION)
226 – Defendants Paul Adler and Robert Adler intentionally undertook control of the assets of the (trusts) HAT, HATUCT, HATGST and HATRT, the Estates of Harry and Thelma Adler and other Family Entities and engaged in unauthorized transactions including:
a- Stealing funds from the Trusts and Family Entities to use for their own benefit or for the benefit of their Non-Family Entities,
b- Stealing funds from the Estate of Harry and Thelma Adler, the Trusts, and other Family Entities to fund trusts left for the benefit of their own families, and
c- Stealing funds from the Trusts to fund independent real estate developments.
227 – In the alternative, Defendants Paul and Robert borrowed funds from the Estate, Trusts, and Family Entities without the required vote or approval of the Co-Trustees and documenting such loans.
228 – Defendants Paul and Robert have either not repaid the loans, or have repaid the loans without any interest, or without the proper payment of interest to the detriment of the Plaintiffs.
230 – Upon information and belief, Defendants Paul and Robert continue to engage in unauthorized transactions from the funds of the Trusts, further harming the Plaintiffs’ interests therein.
AS AND FOR A SECOND CAUSE OF ACTION (AGAINST PAUL AND ROBERT ADLER FOR BREACH OF FIDUCIARY DUTIES)
234 – Instead of abiding by their duties, Paul and Robert stole the Trusts’ funds to invest in properties which they would have been unable to purchase without use of the Trusts’ funds, thereby benefiting themselves in violation of their fiduciary duties.
239 – Defendants Paul and Robert have engaged in several actions in violation of their fiduciary duties, including:
a. Stealing funds from the Trusts to use for their own benefit or for the benefit of the Non-Family Entities, or in the alternative, borrowing funds which have not been repaid or have been repaid without interest;
b. Stealing funds from the Trusts to fund trusts left for the benefit of their own families, or in the alternative, borrowing funds which have not been repaid or have been repaid without interest;
c. Stealing funds from the Trusts to fund independent real estate developments or in the alternative, borrowing funds which have not been repaid or have been repaid without interest;
d. With respect to Robert, using the power of attorney for Thelma Adler as a way to make undetected transfers of funds for his benefit and with disregard for the benefit of Thelma and other beneficiaries;
e. With respect to Paul, knowingly participating, aiding and abetting Robert’s misuse of the power of attorney granted to Robert for personal gain:
240 – Additionally, on multiple occasions Robert Adler and/or Paul Adler stole, or in the alternative, borrowed money from Thelma Adler, the Estate of Harry Adler, or other Trusts and Family Entities, did not document these transactions with the Family Entities.
251 – At Harry’s death, Harry’s gross the state was valued at approximately $8.1 million exclusive of the amounts placed in the HAT.
252 – Currently, the balance remaining in the Estates, Trusts and Family Entities bank accounts is approximately $1.75 million collectively.
253 – Moreover, of the twenty-six (26) assets in Harry’s estate upon his death, only seven (7) assets remain, while Paul and Robert Adler, in conjunction with Rose Marie Pelatti, have increased their collective assets from virtually nothing to owning twenty-one Non-Family Entities and/or real estate developments.
254 – The growth of Paul and Robert’s assets are solely as a result of the unauthorized withdrawls of funds from the Estates, Family Entities and Trusts as family money has entirely funded Paul, Robert and Rose Marie’s scheme.
257 – Upon information and belief, Defendants continue to engage in unauthorized transactions from the funds of the Trusts , further harming the Plaintiffs’ interests therein.
The plaintiffs state:
220 – In conclusion, based upon the limited amount of information in Plaintiff’s control, the total amount due and owing to Plaintiff’s amounts to at least $10,981,911.
(The investigation is continuing and a full accounting has only been undertaken by the Plaintiffs, based upon the information in their control. This number only represents the Plaintiffs’ current belief as to the amount owing. However, it is anticipated that more will be uncovered as due and owing. This number was calculated by using a 9% interest rate running from the date of the “loan” and using the correct application of principal and interest based on the amounts and timing of the payments made by Paul Adler, Robert Adler, and/or Rose Marie Pelatti and their related entities.)
The complete lawsuit can be downloaded from this link:
5 – Paul Adler’s Past History As Reported In Various News Media:
The Palisades Mall case was not Adler’s first interaction with the justice system. Prior to his Federal conviction and prison sentence we are informed by the NY Post that Paul Adler has been in hot water before – but always emerged clean enough to re-enter politics.
“He’s had many brushes with the law,” sighed one associate who knows him well.
Adler became a political activist while still a teenager, and was soon hired as an aide in the state Legislature.
He moved through a series of political and lobbyist positions, but the scent of scandal seemed to follow him wherever he went.
He was an Albany-based lobbyist in 1987 when he went on trial in Manhattan in a case stunningly similar to (the later federal charges in Rockland County,)
Adler was accused of helping arrange a sweetheart deal for the renovation of a lower Manhattan building that overbilled the state by $20 million.
Adler fought the case and won an acquittal in state court. The two men tried with him, a real-estate developer and a former state official, were acquitted of the most serious charges but convicted of lying to state authorities.
According to the Rockland County Times in an article titled ‘The Return of Adler’ we read that a decade after doing time in federal prison on corruption charges, Paul Adler is all-the-way back.
While he never completely lost his influence behind the scenes, in the past few years Adler has reestablished himself publicly as a major fixture in Rockland County’s power grid of business, philanthropy and politics. The once malignant aura of Adler has abated, apparently, and he is now at ease flaunting his connections with the highest levels of power in New York and beyond.
How high does his influence reach? Lest we forget, Adler was reported in NYC newspapers as the man whom brokered the infamous Clinton pardon of the New Square Four: Benjamin Berger, David Goldstein, Jacob Elbaum and Kalman Stern.
Those were the four who took the fall for New Square’s scheme to defraud $30 million from federal, state and county taxpayers through the RCC Judaic Studies Program.
Adler was known as the go-between for the Clintons and New Square at the time.
Ultimately, following a special meeting with the grand rabbi, Hillary received the New Square bloc vote and The Four were “coincidentally” pardoned by President Bill Clinton.
Adler’s big connections couldn’t get him off the corruption charges, however. The feds nailed the former party chief in 2000 for failure to report taxes on wages from a consulting job for the Pyramid Group during construction of the Palisades Mall, as well as mail fraud, for bribing a Clarkstown official with a job in return for favored votes on a land swap, and other charges. In 2002, he pled guilty to the two charges mentioned, and served over a year in federal prison.
For several years following his release, Adler was known to be a mover and shaker behind the scenes in Rockland County, but he maintained a low public profile. That low profile has steadily become not-so-low in the last three years. His big coming out party may have been when he was named the 2011 Philanthropist of the Year by the Rockland Development Council.
While we haven’t seen Adler cavorting with the Clintons recently, it seems Governor Andrew Cuomo is unashamed to be in his close stead. At a recent Tappan Zee Bridge event held in Tarrytown, attended by Governor Andrew Cuomo, House Rep. Nita Lowey, and other political luminaries, Adler helped People to People Executive Director Diane Serratore to gain a one-on-one audience with the governor.
Serratore posted a picture of Cuomo and herself to Facebook and wrote, “Honored as all get-out to speak with Governor Cuomo at a recent event held in Tarrytown. Thank you, Paul Adler!”
Only two years ago when Adler donated a mere $500 to David Carlucci’s political fund, Gannett’s Politics on the Hudson blog reported that the act “raised eyebrows.” Now, in the blink of a political eye, we see Adler as an open escort to none other than Governor Cuomo, and this is an apparently casual and uncontroversial occurrence.
More and more, the outer reality is growing to reflect the inner truth: Paul Adler is one of the most powerful men in Rockland County. And at a mere 52-years-old, Adler is in the prime of political life.
It would seem Adler worked his way back into the good graces of Rockland’s insider community through philanthropy. One positive philanthropic work Adler accomplished in recent years was bringing money in for the JCC headquarters in West Nyack.
But Adler remains controversial. Just as he had his hand in the Palisades Mall cookie jar in the 1990s, Adler is rumored to have been a key player in making the Provident Bank Ballpark project come to fruition in the Town of Ramapo.
At this time Adler serves on the board of directors of the following organizations: Rockland Community Foundation, Holocaust Museum & Studies Center, Nyack Branch of the NAACP, Rockland Jewish Family Services & State of Israel Bonds.
Adler’s Facebook profile notes that in 2013, “Paul was awarded the prestigious Prime Minister’s Award by State of Israel Bonds for his three decades of service.” The business community also has recognized Adler, as he received the 2012 Pinnacle Award for Service to the Rockland Business Association.
Adler is presently a VP at Rand Commercial Services and has been the focus of public criticism over the controversial proposed sale of the Grace Baptist Church in Nanuet. The pastor of the church was the subject of some public ridicule when he claimed he was unaware of Adler’s felonious past when he was engaged as the church’s agent to sell the property. Subsequently, confusion about the sale spread when it became known several widely divergent appraisals were involved with the attempt to sell the church.
We await to learn the eventual outcome of both the Adler family’s court battle and the eventual settlement of his sale of Grace Baptist Church. Paul and Robert Adler‘s response to the lawsuit is due in mid-February 2019.