Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 1 of 40 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

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1 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 1 of 40 IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ABBY LEIGH, individually and as executrix for the ESTATE OF MITCH LEIGH, THE VIOLA FUND, and ABBY LEIGH LTD., AND DAVID LEIGH Plaintiffs, CIVIL ACTION NO.: -against- ALAN S. HONIG, JURY TRIAL DEMANDED Defendant. COMPLAINT Plaintiffs, ABBY LEIGH, individually and as executrix for the ESTATE OF MITCH LEIGH, THE VIOLA FUND, ABBY LEIGH LTD., and DAVID LEIGH, by and through their attorneys, Cozen O Connor, hereby allege the following: THE PARTIES 1. Plaintiff Abby Leigh (hereinafter Ms. Leigh ) is an adult individual and citizen of the State of New York, residing at 49 East 68th Street, New York, New York. 2. Ms. Leigh is the executor of the estate of her late husband, Mitch Leigh (hereinafter the Leigh Estate ). 3. Plaintiff The Viola Fund (hereinafter Viola Fund ) is a charitable organization duly organized and existing under the New York Estates, Powers and Trusts Law of the State of New York, with its registered address at 49 East 68th Street, New York, New York.

2 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 2 of Plaintiffs Abby Leigh and David Leigh are the Trustees of Viola Fund and authorized to act on its behalf. 5. Plaintiff Abby Leigh Ltd. (hereinafter Limited ) is a domestic corporation duly organized and existing under the laws of the State of New York with its principal place of business located at 49 East 68th Street, New York, New York. 6. Abby Leigh is the Chief Executive Officer of Abby Leigh Ltd. and authorized to act on its behalf. 7. Plaintiff David Leigh is an adult individual and citizen of the State of New York, residing at 200 West 72nd Street, New York, New York, Upon information and belief, Defendant Alan S. Honig is an adult individual citizen of the State of Florida, residing at Bocaire Way, Boca Raton, Florida, He is a certified public accountant and maintains a business address at 1501 Broadway, Suite 1313, New York, New York, JURISDICTION AND VENUE 9. The jurisdiction of this Court is invoked pursuant to 28 U.S.C as an action between citizens of different States where the amount in controversy, exclusive of interest and costs, exceeds the sum of seventy-five thousand dollars ($75,000). 10. Venue in this action is properly laid in the Southern District of New York pursuant to 28 U.S.C. 1391, as the events or omissions giving rise to the claims at issue occurred within this district and Defendant is subject to personal jurisdiction within this district. 2

3 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 3 of 40 FACTUAL ALLEGATIONS 13. Plaintiff incorporates, by reference, the allegations set forth in the preceding paragraphs as if fully set forth at length herein. Background 11. Plaintiff Abby Leigh is a talented artist whose work is displayed at the Metropolitan Museum of Art, the Guggenheim Museum, and the Whitney Museum, among others. For 42 years, she was married to Mitch Leigh (hereinafter Mr. Leigh ), a Tony-award winning musician who, among his many accomplishments, composed the score for Man of La Mancha, as well as a number of other Broadway musicals and advertising messages, including the jingle Nobody doesn t like Sara Lee. Mr. Leigh passed away on March 16, Plaintiff David Leigh (hereinafter David ) is the son of Mitch Leigh and Abby Leigh, and works as an opera singer in New York. 13. Beginning in 1995, Defendant Alan S. Honig provided accounting and other services related to the Leighs personal, professional, and charitable endeavors until his employment was terminated in Mr. Honig is a Certified Public Accountant licensed in the State of New York. He does not hold any other registration, certification, or license. 15. Over the years, Mr. Honig became a trusted and confidential advisor to the Leigh family with access to and control over the assets and interests of the Leighs, and, immediately after the death of Mitch Leigh, the assets in Mr. Leigh s estate. 3

4 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 4 of Mr. Honig knew that as a certified public accountant, Ms. Leigh relied on him to review and reconcile her bank accounts. 17. Mr. Honig also knew that Ms. Leigh did not review her bank and financial statements herself but, rather, relied on him to do so. 18. Mr. Honig controlled the online access to certain accounts and Mr. Honig alone knew the password. He manipulated the accounts such that all inquiries should be directed to him. 19. But in early 2015, Ms. Leigh was notified by Bank of America that she was required to remove Mr. Honig from access to all of her family s accounts there for reasons the bank declined to disclose. 20. This alarming instruction prompted Ms. Leigh to terminate Mr. Honig s engagement in April 2015 and hire a forensic accounting firm to review her financial records and Mr. Honig s transactions on her behalf. 21. Because Mr. Honig concealed his true intentions and controlled the flow of information prior to this investigation, Ms. Leigh did not discover his massive scheme to defraud her and her charitable endeavors until it was uncovered by her new accountants. 22. Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh and her famly for over nine years, including the very month that Mitch Leigh died. 4

5 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 5 of 40 Alan Honig Pays Himself Nearly Nine Hundred Thousand Dollars in Unauthorized Compensation from Viola Fund, Limited, and Abby Leigh 23. Over the course of his relationship with the Leigh family, Mr. Honig abused his position as a trusted advisor, and in breach of this trust and of his fiduciary obligations, to pay himself significant amounts of unauthorized compensation from the Leigh Assets. 24. Mr. Honig provided accounting and financial advisory services to Limited from 1995 until he was terminated in In 1995, Ms. Leigh and Mr. Honig orally agreed to a fee of $1500 per month for his services to Limited. 26. In October 2006, Ms. Leigh and Mr. Honig orally agreed to increase his monthly fees to $3000 if he would provide accounting and financial services to the Viola Fund as well as Limited. At that time, Mr. Honig s total compensation for the services he rendered to Limited and Viola was to be $3,000, per month. 27. In February 2009, Mr. Honig again approached Ms. Leigh and claimed that the services he was performing for Limited and Viola deserved greater compensation. Ms. Leigh and Mr. Honig agreed that she would increase his monthly fee to $5,000 in exchange for his accounting and advising services to her personally, for Limited, and for Viola Fund. Again, this increased monthly fee was agreed to cover all financial and accounting services provided by Mr. Honig to Ms. Leigh, Limited and Viola. It was agreed that this monthly sum would be paid to Mr. Honig from one of Ms. Leigh s personal accounts that Mr. Honig had set up for her. 5

6 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 6 of Contrary to their agreement and unbeknownst to Ms. Leigh, Mr. Honig continued to take monthly payments in the account of $1,500 from the Limited bank account collecting approximately $109,500 in unauthorized compensation between October 2006 and April Also in violation of his agreement and unbeknownst to Ms. Leigh, Mr. Honig continued to take $3000 per month from Viola Fund. 30. In February 2014, Mr. Honig unilaterally and without the consent of Ms. Leigh began to pay himself an additional $2500 monthly from Viola Fund. 31. Accordingly, and in breach of the trust and confidence reposed in him and in breach of his fiduciary duties, Mr. Honig took unauthorized payments from Viola Fund of at least $288,000 between February 2009 and February Further, in January 2011, Mr. Honig added $10,000 monthly payments to himself from accounts held by Abby Leigh without authorization. 33. Thus, in violation of the trust and confidence reposed in him and in violation of his fiduciary duties, Mr. Honig took unauthorized payments from Ms. Leigh of at least $490,000 between January 2011 and February In sum, Mr. Honig took unauthorized payments of at least $887,500 from Ms. Leigh, Limited, and Viola Fund. Alan Honig Pockets Over $300,000 in Unauthorized Payments from the Estate 35. Mr. Honig also collected approximately $301,000 in unauthorized compensation for services rendered to the Estate of Mitch Leigh. 6

7 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 7 of Ms. Leigh engaged Mr. Honig to provide administrative and advising services for the Estate. Mr. Honig served in this capacity for approximately one year, from March 2014 until his services were terminated in March Mr. Honig and Ms. Leigh orally agreed that he would receive $20,000 each month for any and all services provided to the Estate (hereinafter the Covered Services ). 38. There were no other agreements, written or oral, with respect to compensation for Mr. Honig and his services to the Estate. 39. As part of the Covered Services, Mr. Honig sold a property owned by the Estate known as Olympic Gardens on August 7, Mr. Honig collected $63,000 from proceeds of that sale without authorization from the Estate and in violation of the trust and confidence reposed in him and in breach of his fiduciary duties. 40. As part of the Covered Services, Mr. Honig arranged for the Estate to pay the balance of an outstanding loan on October 21, As compensation for his efforts, Mr. Honig issued himself a check for $23,000 from the Estate without authorization and in violation of the trust and confidence reposed in him and in breach of his fiduciary duties. 41. Prior to the death of Mitch Leigh, Mr. Honig had been withdrawing substantial quarterly payments from an account owned by Mr. Leigh and associated with real estate in Jackson, New Jersey (hereinafter Jackson Account ). 42. After Mr. Leigh s death and without the knowledge or consent of Ms. Leigh, and in violation of the trust and confidence reposed in him and in violation of his fiduciary duties, 7

8 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 8 of 40 Mr. Honig withdrew $200,000 in quarterly payments of $50,000 over the course of the year from the Jackson Account owned by the Estate. 43. Mr. Honig issued himself four additional checks from the Estate account totaling $15,764, without authorization or explanation. 44. In sum, Mr. Honig paid himself at least $301,000 from the Estate without authorization and in violation of the trust and confidence reposed in him and in violation of his fiduciary duties. Alan Honig Repeatedly Engages in Self-Dealing 45. As part of his financial services, Mr. Honig had control of the investment accounts for the Estate, the Leigh family, Viola Fund, and Limited. He abused this trust and confidence by engaging in self-dealing, investing in assets in which he and his family had substantial interests. 46. Mr. Honig caused Viola Fund to suffer over $800,000 in losses through an investment in Spherix stock. 47. In March 2014, Mr. Honig s son, Barry Honig gifted 300,000 shares of Spherix stock to Viola Fund with a value of approximately $1.3 million. At the time, Mr. Honig s family held significant interests in Spherix. 48. Upon information and belief, prior to the gift, Mr. Honig s son Barry owned approximately 388,185 shares of common stock in Spherix, and the right to convert preferred stock in Spherix into 2.93 million shares of common stock. 8

9 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 9 of Upon information and belief, prior to the gift, Barry Honig was unable to convert his preferred stock into common stock without selling or otherwise relieving himself of the common stock he already held. 50. Upon information and belief, the convertible preferred stock contained a blocker provision prohibiting conversion if it would result in the holder having an interest in excess of 9.99% of Spherix. Converting his preferred shares without disposing of his existing common stock would have given Barry Honig 3.32 million shares of Spherix, or approximately a 12.8% interest. 51. Upon information and belief, Spherix shares plunged precipitously after the gift to Viola Fund due to, among other things, dilution from conversion of convertible preferred stock held by major shareholders including Barry Honig. 52. Upon information and belief, during the continued fall of Spherix stock resulting in part from this dilution, Mr. Honig completely divested himself of any interest in Spherix but did not divest Viola Fund s interest or advise Ms. Leigh of the risk of loss to Viola Fund. 53. The eventual sale of Viola Fund s interest in Spherix yielded $473,233.07, or a loss of over $800,000 in value to Viola Fund. 54. Mr. Honig also caused the Leigh family to invest in the Rant Media Network (hereinafter Rant ). 55. At Mr. Honig s request, Ms. Leigh gave him $106,710 to invest in Rant. Mr. Honig has never provided any stock certificates or other proof of ownership, financial performance, or valuation for Ms. Leigh s purported interest. 9

10 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 10 of At Mr. Honig s request, David gave him $100,000 to invest in Rant. Mr. Honig has never provided any stock certificates or other proof of ownership, financial performance, or valuation for David s purported interest. Network. 57. Mr. Honig s son, Barry Honig, is an investor and strategic advisor to Rant Media 58. Mr. Honig also caused the Leigh family to suffer losses in excess of $80,000 from investments in BroadVision, a self-service web application vender. 59. Barry Honig invested in BroadVision immediately before a 600% price rally in 2012 and Upon information and belief, before and during that price rally, BroadVision stock was trumpeted by the National Inflation Association ( NIA ). 61. Upon information and belief, NIA was founded by Jonathan Lebed, who was prosecuted in 2001 for using the internet to encourage investors to buy penny stocks that he owned to artificially inflate the price. 62. Mr. Honig s investment in BroadVision caused $30, in losses to Ms. Leigh. Leigh. 63. Mr. Honig s investment in BroadVision caused $25, in losses to David 64. In sum, Mr. Honig s self-dealing cause over one million dollars in losses to the Leigh Family and the Viola Fund. 10

11 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 11 of 40 The Egg Harbor Fraud 65. Mr. Honig used his position as accountant and trusted advisor to acquire property of the Estate for his family at less than fair market value, and place the Estate at risk for committing tax fraud (hereinafter the Egg Harbor Fraud ). 66. In 2014, Mr. Honig informed Ms. Leigh that the Estate had cash flow issues that needed to be resolved. He proposed a solution involving certain property held by the Estate in Egg Harbor Township, New Jersey ( EHT Land ) that would later be revealed as the Egg Harbor Fraud. 67. At the time of his death, Mr. Leigh owned a large number of properties which passed to the Estate. Many of these properties were purchased by Atlantic Realty Management after Mr. Leigh s death. 68. According to Mr. Honig, the Estate should distribute the EHT Land to Ms. Leigh, on the theory that Mr. Honig would then sell the property and obtain a tax benefit for Ms. Leigh. 69. At the time, the land in Egg Harbor had a fair market value of approximately $2,500,000 according to an appraisal by an independent real estate appraiser. 70. Mr. Honig represented to Ms. Leigh and other Leigh family members that he was unable to find a buyer for the land, and thus proposed that an entity in which his children had a significant interest would purchase the property at the greatly reduced price of approximately $500,

12 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 12 of Mr. Honig falsely represented that Ms. Leigh could take a loss on the sale to offset any taxes she might owe by submitting the $2.5 million appraisal to the IRS for purposes of establishing the tax basis on the EHT Land, but using the sale to his children at $500,000 to justify a tax loss. 72. Mr. Honig then convinced David Leigh that he must invest $100,000 to fund the purchase, paying nearly 20% of the purchase price for only 4% of the eventual ownership. 73. Mr. Honig had not, however, fully marketed the property. He failed to offer it to Atlantic Realty Management, the primary buyer of the Estate s other real estate holdings. 74. Upon information and belief, Atlantic Reality Management or another third-party buyer would have purchased the EHT Land at a much higher price if properly marketed. 75. Mr. Honig also represented that Ms. Leigh could realize a loss against the appraised value that would help offset any taxes owed but, as a Certified Public Accountant, Mr. Honig should have known that reporting the $2.5 million appraisal with the $500,000 sale to his children would constitute a tax fraud. 76. Mr. Honig knew that David Leigh relied upon Mr. Honig in financial matters and would trust that he acted in their best interests. 77. Preying on their inexperience in financial matters and trust in his guidance, Mr. Honig convinced David Leigh to pay nearly 20% of the purchase price for a 4% interest in the purchase entity based on Mr. Honig s misrepresentations that it would benefit the Estate and Ms. Leigh. 12

13 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 13 of To avoid any fraud, Ms. Leigh was unable to utilize any tax loss and received no benefit from selling the EHT Land for $500,000 to Mr. Honig s children, and indeed suffered losses because the EHT Land could have been sold a much higher value to a third-party if properly marketed, and Plaintiff David Leigh was falsely persuaded to pay a disproportionate portion of the purchase price to the benefit of Mr. Honig s children. 79. Mr. Honig s self-dealing caused $2.1 million dollars in losses arising from both the diminished purchase price and any unrealized losses. COUNT I BREACH OF CONTRACT (Abby Leigh, as Executor for the Estate of Mitch Leigh v. Alan Honig) 80. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 79 inclusive, with the same force and effect as though fully and at length set forth herein. 81. In or about March 2014, Plaintiff Abby Leigh, as executrix for the Estate of Mitch Leigh, and Defendant Alan Honig made an agreement for Defendant Alan Honig to provide financial and accounting services to the Estate of Mitch Leigh in exchange for a monthly fee of $20, Defendant Alan Honig breached that compensation agreement by taking unauthorized payments, causing losses to the Estate in excess of $300, On August 7, 2014, Defendant Alan Honig made an unauthorized payment to himself of $63,

14 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 14 of On October 21, 2014, Defendant Alan Honig made an unauthorized payment to himself of $23, In 2014, Defendant Alan Honig collected $200, in eight unauthorized payments of $50, each in $15, In 2014, Defendant Alan Honig wrote four unauthorized checks totaling 87. Defendant Alan Honig s breach of his compensation agreement caused losses to the Estate in the amount of $301, Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her to hide his unauthorized payments. WHEREFORE Plaintiff ABBY LEIGH, as Executrix of the ESTATE OF MITCH LEIGH, demands judgment in her favor and against Defendant, ALAN HONIG, in an amount in excess of THREE HUNDRED AND ONE THOUSAND, SEVEN HUNDRED AND SIXTY FOUR DOLLARS and 00/100 ($301,764.00), together with pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT II BREACH OF FIDUCIARY DUTY (Abby Leigh, as Executor for the Estate of Mitch Leigh v. Alan Honig) 89. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 88 inclusive, with the same force and effect as though fully and at length set forth herein. 14

15 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 15 of The Estate of Mitch Leigh reposed its trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters. 91. The Estate of Mitch Leigh trusted Defendant Alan Honig with authority over its financial matters and affairs. Mitch Leigh. 92. Defendant Alan Honig was under a duty to act for the benefit of the Estate of 93. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to the Estate of Mitch Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters. 94. Defendant Alan Honig engaged in misconduct that breached his duty as a fiduciary by issuing unauthorized checks from the Estate for his personal financial benefit. 95. On August 7, 2014, Defendant Alan Honig made an unauthorized payment to himself of $63, On October 21, 2014, Defendant Alan Honig made an unauthorized payment to himself of $23, In 2014, Defendant Alan Honig collected $200, in eight unauthorized payments of $50, each in In 2014, Defendant Alan Honig wrote four unauthorized checks totaling $15, Defendant Alan Honig s unauthorized checks caused $301, in losses to the Estate. 15

16 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 16 of Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh in the year after her husband s death Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her to hide his unauthorized payments. WHEREFORE, Plaintiff ABBY LEIGH, as Executrix of the ESTATE OF MITCH LEIGH, demands judgment in her favor and against Defendant, ALAN HONIG, in an amount in excess of THREE HUNDRED AND ONE THOUSAND, SEVEN HUNDRED AND SIXTY FOUR DOLLARS and 00/100 ($301,764.00), together with punitive damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT III FRAUDULENT INDUCEMENT (Abby Leigh, individually and as Executrix for the Estate of Mitch Leigh, and David Leigh vs. Alan Honig) 101. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 100 inclusive, with the same force and effect as though fully and at length set forth herein Upon information and belief, the Estate of Mitch Leigh owned property with a fair market value of $2,500, located in Egg Harbor Township, New Jersey Defendant Alan Honig falsely stated that he would market the Estate s property in Egg Harbor Township if the property was distributed to Plaintiff Abby Leigh. 16

17 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 17 of Defendant Alan Honig falsely stated that he was unable to find a buyer for the property in Egg Harbor Township Defendant Alan Honig falsely stated that because he could not find a buyer, an entity in which he and his children held a significant majority interest would purchase the property for $500, to provide a tax benefit to Ms. Leigh Defendant Alan Honig falsely stated that Plaintiff David Leigh must invest $100, to purchase the property in order to benefit the Estate and Ms. Leigh, paying 20% of the purchase price despite being given only a 4% interest in the purchasing entity Defendant Alan Honig intended to deceive Plaintiffs Ms. Leigh, the Estate of Mitch Leigh, and David Leigh with respect to the property in Egg Harbor Township Defendant Alan Honig knew that he had not adequately marketed the Egg Harbor Township property Defendant Alan Honig knew that Ms. Leigh could not properly claim a tax benefit on the sale Defendant Alan Honig proposed Defendant Alan Honig knew that David Leigh would be paying 20% of the purchase price for only a 4% interest in the purchase entity based on Mr. Honig s misrepresentations that it would benefit the Estate and Ms. Leigh The Estate of Mitch Leigh distributed the Egg Harbor Township property to Ms. Leigh in reliance on Defendant Alan Honig s misrepresentations. 17

18 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 18 of Ms. Leigh authorized the sale of the Egg Harbor Township property to an entity owned by Defendant Alan Honig s children in reliance on his expertise in accounting and financial matters and his misrepresentation that the sale would provide a tax benefit to Ms. Leigh David Leigh paid $100, to the entity of Alan Honig s choosing in reliance on Mr. Honig s misrepresentation that the transaction would provide a benefit to the Estate and Ms. Leigh Absent Defendant Alan Honig s misrepresentations, the Estate of Mitch Leigh or Ms. Leigh would have sold the property to a buyer at fair market value Absent Defendant Alan Honig s misrepresentations David Leigh would not have invested $100, in the Egg Harbor Township entity Defendant Alan Honig s fraud caused $2,200, in losses Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh and her children in the year after her husband s, and David s father s death Defendant Alan Honig prevented Plaintiffs Abby Leigh, and David Leigh from discovering of his breach by controlling the flow of financial information to them. WHEREFORE, Plaintiff ABBY LEIGH, individually and as Executrix of the ESTATE OF MITCH LEIGH, and DAVID LEIGH demand judgment in their favor and against Defendant, ALAN HONIG, in an amount in excess of TWO MILLION ONE HUNDRED 18

19 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 19 of 40 THOUSAND DOLLARS and 00/100 ($2,100,000.00), together with punitive damages, prejudgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT IV MALPRACTICE (Abby Leigh, individually and as Executrix for the Estate of Mitch Leigh, and David Leigh vs. Alan Honig) 119. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 118 inclusive, with the same force and effect as though fully and at length set forth herein Defendant Alan Honig deviated from accepted standards of professional practice through the Egg Harbor Transaction as described in Count III hereof In 2014, the Egg Harbor Township property had a fair market value as appraised at $2,500, In the Egg Harbor Fraud, Defendant Alan Honig falsely stated that Ms. Leigh could take a tax benefit if the Estate of Mitch Leigh distributed the Egg Harbor Township property to her, and Defendant Alan Honig sold the property for $500, to an entity owned in significant part by his children As a certified public accountant, Defendant Alan Honig knew or should have known that completing such a transaction could not have the intended tax consequences, and that the promised tax deduction could not be properly claimed Defendant Alan Honig s malpractice caused losses of at least $2,100,

20 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 20 of Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh in the year after her husband s death Defendant Alan Honig prevented Plaintiffs Abby and David Leighs discovery of his breach by controlling the flow of financial information to her. WHEREFORE Plaintiffs ABBY LEIGH, individually and as executrix for the ESTATE OF MITCH LEIGH, and DAVID LEIGH demand judgment in their favor and against Defendant, ALAN HONIG, of TWO MILLION ONE HUNDRED THOUSAND DOLLARS and 00/100 ($2,100,000.00), together with pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT V BREACH OF CONTRACT (Abby Leigh vs. Alan Honig) 127. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 126 inclusive, with the same force and effect as though fully and at length set forth herein In or about February 2009, Plaintiff Abby Leigh and Defendant Alan Honig made an agreement for Defendant Honig to provide accounting and financial services to Plaintiffs Abby Leigh, The Viola Fund, and Abby Leigh Lrd. in exchange for a monthly payment of $ Beginning in January 2011, Defendant Alan Honig also collected an additional $10, each month without authorization, breaching his compensation agreement. 20

21 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 21 of Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN HONIG in an amount in excess of FOUR HUNDRED AND NINETY THOUSAND DOLLARS and 00/100 ($490,000.00), together with pre-judgment and postjudgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT VI BREACH OF FIDUCIARY DUTY (Abby Leigh vs. Alan Honig) 131. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 130 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff Abby Leigh reposed her trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff Abby Leigh trusted Defendant Alan Honig with authority over her financial matters and affairs. Leigh Defendant Alan Honig was under a duty to act for the benefit of Plaintiff Abby 135. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff Abby Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters. 21

22 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 22 of Defendant Alan Honig engaged in misconduct that breached his duty as a fiduciary by issuing unauthorized checks from accounts owned by Abby Leigh for his personal financial benefit Beginning in January 2011, Defendant Alan Honig issued unauthorized checks for $10, each month for forty-nine months Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh over four years, including the year following her husband s death Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN HONIG in an amount in excess of FOUR HUNDRED AND NINETY THOUSAND DOLLARS and 00/100 ($490,000.00), together with punitive damages, prejudgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT VII FRAUDULENT INDUCEMENT (Abby Leigh vs. Alan Honig) 140. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 139 inclusive, with the same force and effect as though fully and at length set forth herein. 22

23 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 23 of In or about February 2009, Plaintiff Abby Leigh and Defendant Alan Honig made an agreement for Defendant Alan Honig to provide accounting and financial services to Plaintiffs Abby Leigh, The Viola Fund, and Abby Leigh Ltd. in exchange for a monthly payment of $ To induce Plaintiff Abby Leigh to agree, Defendant Alan Honig falsely represented that such amounts would represent the entirety of his compensation Plaintiff Abby Leigh justifiably relied on Defendant Alan Honig s promise From February 2009 until February 2015, Defendant Alan Honig paid himself each month in the amounts of $ from Plaintiff The Viola Fund and $ from Plaintiff Abby Leigh Limited As a result of Defendant Alan Honig s misrepresentations, Plaintiff Abby Leigh was induced to pay compensation to Defendant Alan Honig that he was already collecting from Abby Leigh Ltd. and The Viola Fund Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh for over six years, including the year following her husband s death Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE, Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN S. HONIG in an amount in excess of THREE HUNDRED AND TWENTY- 23

24 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 24 of 40 FOUR THOUSAND DOLLARS and 00/100 ($324,000.00), together with punitive damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT VIII BREACH OF FIDUCIARY DUTY (Abby Leigh vs. Alan Honig) 148. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 147 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff Abby Leigh reposed her trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff Abby Leigh trusted Defendant Alan Honig with authority over her financial matters and affairs. Leigh Defendant Alan Honig was under a duty to act for the benefit of Plaintiff Abby 152. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff Abby Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Defendant Alan Honig engaged in misconduct that breached his duty as a fiduciary by issuing unauthorized checks from accounts owned by Abby Leigh for his personal financial benefit. 24

25 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 25 of From February 2009 until February 2015, Defendant Alan Honig paid himself each month in the amounts of $ from Plaintiff The Viola Fund and $ from Plaintiff Abby Leigh Limited Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh for over six years, including the year following her husband s death Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE, Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN S. HONIG in an amount in excess of THREE HUNDRED AND TWENTY- FOUR THOUSAND DOLLARS and 00/100 ($324,000.00), together with punitive damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT IX BREACH OF FIDUCIARY DUTY (Abby Leigh vs. Alan Honig) 157. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 156 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff Abby Leigh reposed her trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters. 25

26 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 26 of Plaintiff Abby Leigh trusted Defendant Alan Honig with authority over her financial matters and affairs. Leigh Defendant Alan Honig was under a duty to act for the benefit of Plaintiff Abby 161. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff Abby Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Defendant Alan Honig caused Abby Leigh to invest in BroadVision Defendant Alan Honig s son Barry Honig owned an interest in BroadVision at the time Defendant Alan Honig made the investment. losses As a result of this investment, Plaintiff Abby Leigh suffered at least $30, in 165. Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN HONIG in an amount in excess of THIRTY THOUSAND ONE HUNDRED AND NINETEEN DOLLARS and 70/100 ($30,119.70), together with punitive damages, pre- 26

27 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 27 of 40 judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT X BREACH OF FIDUCIARY DUTY (David Leigh vs. Alan Honig) 167. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 166 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff David Leigh reposed his trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff David Leigh trusted Defendant Alan Honig with authority over his financial matters and affairs. Leigh Defendant Alan Honig was under a duty to act for the benefit of Plaintiff David 171. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff David Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Defendant Alan Honig caused Plaintiff David Leigh to invest in BroadVision Defendant Alan Honig s son Barry Honig owned an interest in BroadVision at the time Defendant Alan Honig made the investment. 27

28 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 28 of 40 in losses As a result of this investment, Plaintiff David Leigh suffered at least $25, Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Plaintiff David Leigh Defendant Alan Honig prevented Plaintiff David Leigh s discovery of his breach by controlling the flow of financial information to him. WHEREFORE Plaintiff DAVID LEIGH demands judgment in his favor and against Defendant ALAN HONIG in an amount in excess of TWENTY-FIVE THOUSAND SEVEN HUNDRED AND FIFTY ONE DOLLARS and 48/100 ($25,751.48), together with punitive damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XI BREACH OF FIDUCIARY DUTY (Abby Leigh vs. Alan Honig) 177. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 176 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff Abby Leigh reposed her trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff Abby Leigh trusted Defendant Alan Honig with authority over her financial matters and affairs. 28

29 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 29 of Defendant Alan Honig was under a duty to act for the benefit of Plaintiff Abby Leigh Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff Abby Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters In April 2014, Defendant Alan Honig claims to have invested $106, for Ms. Leigh in Rant Media Network. Media Defendant Alan Honig s son, Barry Honig, is an investor and advisor to Rant 184. Defendant Alan Honig has never provided Plaintiff Abby Leigh with any stock certificate or other proof of ownership or valuation for her investment Defendant Alan Honig s breach benefitted only the Honig family and caused losses to Plaintiff Abby Leigh for the full value of her purported investment Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh less than a month after her husband s death Defendant Alan Honig prevented Plaintiff Abby Leigh s discovery of his breach by controlling the flow of financial information to her. WHEREFORE Plaintiff ABBY LEIGH demands judgment in her favor and against Defendant ALAN HONIG in an amount in excess of ONE HUNDRED AND SIX THOUSAND SEVEN HUNDRED AND TEN DOLLARS and 00/100 ($106,710.00), together with punitive 29

30 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 30 of 40 damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XII BREACH OF FIDUCIARY DUTY (David Leigh vs. Alan Honig) 188. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 187 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff David Leigh reposed his trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff David Leigh trusted Defendant Alan Honig with authority over his financial matters and affairs. Leigh Defendant Alan Honig was under a duty to act for the benefit of Plaintiff David 192. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff David Leigh, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Defendant Alan Honig claims to have invested $100, for Plaintiff David Leigh in Rant Media Network. Media Defendant Alan Honig s son, Barry Honig, is an investor and advisor to Rant 30

31 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 31 of Defendant Alan Honig did not reveal that conflict of interest to Plaintiff David Leigh Defendant Alan Honig has never provided Plaintiff David Leigh with any stock certificate or other proof of ownership or valuation for her investment Defendant Alan Honig s breach benefitted only the Honig family and caused losses to Plaintiff David Leigh for the full value of his purported investment Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon David Leigh less than a month after his father s death Defendant Alan Honig prevented Plaintiff David Leigh s discovery of his breach by controlling the flow of financial information to him. WHEREFORE Plaintiff DAVID LEIGH demands judgment in his favor and against Defendant ALAN HONIG in an amount in excess of ONE HUNDRED THOUSAND DOLLARS and 00/100 ($100,000.00), together with punitive damages, pre-judgment and postjudgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XIII BREACH OF CONTRACT (Abby Leigh Ltd. v. Alan Honig) 200. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 199 inclusive, with the same force and effect as though fully and at length set forth herein. 31

32 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 32 of In or about February 2009, Plaintiff Abby Leigh Ltd. and Defendant Alan Honig made an agreement for Defendant Alan Honig to provide accounting and financial services to Plaintiff Abby Leigh Ltd., among others, in exchange for a monthly payment of $ made by Plaintiff Abby Leigh Beginning in February 2009, and until March 2015, Defendant Alan Honig also withdrew $ each month from the Abby Leigh Ltd. account without authorization. agreement Defendant Alan Honig s monthly withdrawals breached his compensation 204. In January 2014, Defendant Alan Honig made an unauthorized wire transfer to himself for an additional $ agreement Defendant Alan Honig s unauthorized withdrawals breached his compensation 206. Defendant Alan Honig s unauthorized withdrawals caused $111, in losses to Abby Leigh Ltd Defendant Alan Honig prevented Plaintiff Abby Leigh Ltd. s discovery of his breach by controlling the flow of financial information to it to hide his unauthorized payments. WHEREFORE Plaintiff ABBY LEIGH LTD. demands judgment in its favor and against Defendant, ALAN S. HONIG, in an amount in excess of ONE HUNDRED AND ELEVEN THOUSAND NINE HUNDRED DOLLARS and 00/100 ($111,900.00), together with pre- 32

33 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 33 of 40 judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XIV BREACH OF FIDUCIARY DUTY (Abby Leigh Ltd. v. Alan Honig) 208. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 207 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff Abby Leigh Ltd. reposed its trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff Abby Leigh Ltd. trusted Defendant Alan Honig with authority over its financial matters and affairs. Leigh Ltd Defendant Alan Honig was under a duty to act for the benefit of Plaintiff Abby 212. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff Abby Leigh Ltd., as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Beginning in February 2009, and until March 2015, Defendant Alan Honig also withdrew $ each month from the Abby Leigh Ltd. account without authorization In January 2014, Defendant Alan Honig made an unauthorized wire transfer to himself for an additional $

34 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 34 of Defendant Alan Honig s unauthorized withdrawals breached his fiduciary duties to Abby Leigh Ltd Defendant Alan Honig s unauthorized withdrawals caused $111, in losses to Abby Leigh Ltd Defendant Alan Honig s misconduct was an intentional, willful, and malicious scheme preying upon Ms. Leigh, as Chief Executive Officer for Abby Leigh Ltd., for over six years, including the year after Mitch Leigh s death Defendant Alan Honig prevented Plaintiff Abby Leigh Ltd. s discovery of his breach by controlling the flow of financial information to it to hide his unauthorized payments. WHEREFORE Plaintiff ABBY LEIGH LTD. demands judgment in its favor and against Defendant, ALAN S. HONIG, in an amount in excess of ONE HUNDRED AND ELEVEN THOUSAND NINE HUNDRED DOLLARS and 00/100 ($111,900.00), together with punitive damages, pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XV BREACH OF CONTRACT (The Viola Fund v. Alan Honig) 219. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 218 inclusive, with the same force and effect as though fully and at length set forth herein. 34

35 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 35 of In or about October 2006, Plaintiff The Viola Fund and Defendant Alan Honig made an agreement for Defendant Alan Honig to provide accounting and financial services to Plaintiff The Viola Fund for $ Between October 2006 and February 2009, Defendant Alan Honig also withdrew an additional $ each month from Plaintiff The Viola Fund s accounts without authorization In or about February 2009, Plaintiff The Viola Fund and Defendant Alan Honig made an agreement for Defendant Alan Honig to provide accounting and financial services to Plaintiff The Viola Fund, among others, in exchange for a monthly payment of $ made by Plaintiff Abby Leigh Between February 2009 and March 2015, Defendant Alan Honig also withdrew $ each month from Plaintiff The Viola Fund s Accounts without authorization to do so In 2014 and 2015, Defendant Alan Honig withdrew an additional $30, in unauthorized payments in monthly payments of $ agreement Defendant Alan Honig s unauthorized withdrawals breached his compensation 226. Defendant Alan Honig s unauthorized withdrawals caused losses to Plaintiff The Viola Fund of at least $288, Defendant Alan Honig prevented Plaintiff The Viola Fund s discovery of his breach by controlling the flow of financial information to it to hide his unauthorized payments. 35

36 Case 1:15-cv GHW Document 1 Filed 09/02/15 Page 36 of 40 WHEREFORE Plaintiff THE VIOLA FUND demands judgment in its favor and against Defendant, ALAN S. HONIG, in an amount in excess of TWO HUNDRED AND EIGHTY- EIGHT THOUSAND and 00/100 ($288,000.00), together with pre-judgment and post-judgment interest, attorneys fees, the costs of this suit, and other such relief as this Court may order and deem just and equitable. COUNT XVI BREACH OF FIDUCIARY DUTY (The Viola Fund v. Alan Honig) 228. Plaintiffs repeat each and every allegation contained in those paragraphs of the Complaint marked and numbered 1 through 227 inclusive, with the same force and effect as though fully and at length set forth herein Plaintiff The Viola Fund reposed its trust and confidence in Defendant Alan Honig and relied upon his superior expertise in financial matters Plaintiff The Viola Fund trusted Defendant Alan Honig with authority over its financial matters and affairs. Viola Fund Defendant Alan Honig was under a duty to act for the benefit of Plaintiff The 232. Defendant Alan Honig owed a duty of undivided loyalty and the utmost good faith to Plaintiff The Viola Fund, as a result of his position as a trusted advisor and his expertise in the area of accounting and financial matters Between October 2006 and February 2009, Defendant Alan Honig withdrew $ each month from Plaintiff The Viola Fund s accounts without authorization. 36