A partner in a Georgia law firm swiped $3.35 million from the firm’s accounts to gamble at The Cosmopolitan of Las Vegas, the law firm claims in a lawsuit against the hotel-casino.
Morris Schneider Wittstadt LLC sued Nevada Property I LLC dba The Cosmopolitan of Las Vegas in federal court on June 19.
The case is part of a much larger picture, in which the firm’s former partner Nathan Hardwick IV was accused of embezzling $30 million from the law office.
Pro golfer Dustin Johnson, ranked No. 3 in the world, sued the law firm last year in Atlanta Federal Court, claiming Hardwick persuaded him to “loan” the firm $3 million, with promises it would pay him back $4 million, but that “Mr. Johnson’s lawyers stole his money.”
Morris Schneider Wittstadt was formerly known as Morris Hardwick Schneider, according to Johnson’s complaint.
In the law firm’s recent complaint against the casino, it claims that in early 2012 The Cosmopolitan “solicited Hardwick to create a casino account” to use for gambling there, and he began wiring it money from the law firm’s interest on lawyers trust accounts and other accounts.
Money in interest on lawyer trust accounts must be segregated from other accounts.
“The funds Hardwick caused to be wired to The Cosmopolitan were not his own; rather, they were funds Hardwick misappropriated from the firm’s (interest on lawyers trust accounts) accounts and other firm bank accounts,” the complaint states.
The law firm says Hardwick sent “no fewer than 12 wire transfers” from its accounts to the casino, beginning on June 29, 2012, totaling $3,350,000.
Hardwick directly oversaw the firm’s corporate accounting and was in charge of its financial management, the law firm says. It says it had no prior business dealings with The Cosmopolitan, did not owe it any money when Hardwick wired it the money, and says the casino “had no right to retain the $3.35 million.”
Because of information contained in the wire transfers, The Cosmopolitan “should have known that the transfer of the $3.35 million was improper and unauthorized,” the law firm says.
“Despite having knowledge of the improper nature of the wire transfers from the firm’s accounts, The Cosmopolitan elected to retain the transferred funds” and “allowed Hardwick to withdraw some of the funds from his Cosmopolitan account for his personal use and benefit, thus aiding Hardwick in his scheme to defraud the firm,” according to the complaint.
Morris Schneider Wittstadt, which calls itself the “nation’s largest real estate closing firm,” has 50 offices and more than 85 attorneys practicing law in 13 states, and owns and operates the LandCastle Title company, according to publicly available information.
The law firm in 2014 accused Hardwick of embezzling more than $30 million from it and its title company, $4 million of which it claimed were wired to casinos.
Hardwick’s attorney, Ed Garland, called the embezzlement accusations “false” and told the Atlanta Journal-Constitution that Hardwick “looks forward to clearing his name.”
Morris Schneider Wittstadt seeks damages from The Cosmopolitan for unjust enrichment, conversion, aiding and abetting breach of fiduciary duty, and money had and received. It is represented by Aaron Maurice with Kolesar &Leatham, who did not return a call seeking comment. Nor did The Cosmopolitan.