A half-dozen people who say they were conned into investing their money with a Beverly Hills broker who later pleaded guilty to running a Ponzi scam are suing the brokerage firm where he worked, alleging it aided him in stealing a total of $2.74 million from them.
Michael McCready worked in Beverly Hills as a registered Brookstreet broker from August 2005 to June 2007, according to the lawsuit, which says he left the company at a time it was suffering heavy financial losses in mortgage-backed securities.
A Brookstreet Securities Corp. representative could not be immediately reached for comment on the suit filed Monday in Los Angeles Superior Court. The plaintiffs' allegations include fraud, negligence and civil conspiracy.
Writer Brad Markowitz, Mark and Catherine Lisson and their son, Justin Lisson, school teacher Jacqueline Develle and San Diego County resident David Ransil have been "psychologically and emotionally traumatized" by their ordeals and been forced to "defer their dreams or give them up entirely," their suit states.
"Plaintiffs were unsophisticated investors who relied on Brookstreet to safeguard their investments which, for many of them, comprised their entire life savings," according to the suit. "Plaintiffs are simply devastated, both financially and emotionally, and bring this action to obtain some recompense for their losses."
Markowitz says he was repeatedly assured by McCready that his money was safe and regarded the broker as his financial adviser. He invested $1.7 million and lost $1.22 million, according to the suit.
"He is looking for work, but has not been successful and is now living entirely off of borrowed money," the suit says. "His only hope is to sell his home in a short-sale, no doubt at a substantial loss."
Develle invested $548,000 she inherited after her father's death and lost $478,000. Meanwhile, the Lissons are struggling to pay for the remaining three years of their daughter's college education and Mark Lisson has had to end his retirement and and return to work, according to the complaint.
"Three days after McCready informed the Lissons that they had no money, Catherine's mother died, leaving Catherine with no money to pay for her mother's medical bills or even to give her mother the burial she wanted," the suit says.
"Instead, Catherine had to find the cheapest way to cremate her mother and to date has not even had time to grieve because she is too busy trying to figure out how she and her family will live."
In April 2010, McCready was sentenced to nine years in prison by U.S. District Court Judge George King. A year earlier, he pleaded guilty to defrauding more than two dozen clients out of $8 million to $9 million in his five-year long Ponzi scheme, in which he used client money for personal uses and to finance the production of a movie, prosecutors said.