Merrill Lynch embezzler now faces bankruptcy woes

By Dave Collins

Associated Press

Published: Sunday, July 22 2012 12:00 a.m. MDT

HARTFORD, Conn. — After getting out of prison in 2007 for stealing $43 million from Merrill Lynch, Daniel Gordon quickly was back in business, loaning hundreds of thousands of dollars to pro athletes at interest rates topping 75 percent per year and on his way to making multimillion-dollar business deals, according to court records.

The Norwich, Conn., native is now managing partner of a New York City-based, privately held investment firm, Rosedale Cooley & Co., and lives in a posh apartment building on Manhattan's Upper East Side, according to court records and documents filed in Delaware, where Rosedale Cooley is incorporated.

But Gordon's return to the business world from prison has been a bumpy ride. He's faced several lawsuits over his business dealings and remains mired in a Chapter 7 bankruptcy case he filed nearly three years ago that includes allegations of theft and fraud against him made by his ex-wife, Laura Gordon, and pro basketball player Eddy Curry.

After prison, Gordon "wasted no time resuming his fraudulent behavior," according to a document filed in the bankruptcy case by Laura Gordon. She accused Gordon of illegally drawing $3.5 million from her home equity line of credit on her Manhattan apartment beginning in February 2008, only four months after being released from prison. A court ordered Gordon to pay back the money.

The bankruptcy trustee has also accused Gordon of hiding more than $7 million in assets from creditors through fraudulent transfers.

Gordon, 36, who was sentenced in 2005 to 3 1/2 years in prison for the Merrill Lynch embezzlement, didn't return messages seeking comment. He was released from prison in October 2007 after serving half his sentence.

Manhattan attorney Donald David, who is representing Gordon in the bankruptcy case, declined to comment on specific allegations against Gordon and his businesses made by Laura Gordon, Curry and others, citing pending litigation.

"Quite obviously, allegations are made in litigation that we have disputed and which will ultimately be decided by a court," David wrote in an email to The Associated Press. "To rely upon such allegations, and certainly to presume their truth, is inappropriate and reckless."

Gordon listed $10.8 million in assets and $41 million in liabilities in his bankruptcy filing. He's been fighting the Internal Revenue Service, which claims Gordon owes $44 million in taxes and interest on the money he stole from Merrill Lynch.

Curry, a 7-foot center for the current NBA champion Miami Heat who is now a free agent, took a $570,000 loan with an 84 percent interest rate from Gordon's company, Las Vegas-based Allstar Capital, on Feb. 22, 2008, the same day Laura Gordon alleges her ex-husband started racking up her credit line, court records show. Nevada law allows such high interest rates.

Curry defaulted on the loan in September 2008 and was later ordered by a Nevada court to repay Allstar more than $1.2 million in principal and interest. But Curry has filed documents in Gordon's bankruptcy case seeking to stop Gordon from collecting the loan repayment and have the loan deal declared void.

"Daniel Gordon ... stole funds from his ex-wife, Laura Gordon, and proceeded to launder the theft through a usurious loan to an innocent party, Mr. Curry," said Curry's filing in the bankruptcy case.

Laura Gordon and Curry's agent didn't return messages.

Another pro athlete, Miami Dolphins defensive back Jonathan Wade, also got into trouble after taking a loan from Allstar, which is controlled solely by Gordon. The firm gave Wade a $48,500 loan in January 2008 with a 76 percent annual interest rate on any balance remaining after eight months. Wade ended up defaulting and was ordered by a court to repay Allstar $122,000 in principal and interest.

A representative for Wade could not immediately be located for comment.

Try out the new DeseretNews.com design!
try beta learn more
Get The Deseret News Everywhere