A Washington, D.C.-based consulting firm has filed suit against one of its former partners, alleging he tricked a client into making payments to his personal bank account instead of the company.
In a complaint filed yesterday at the U.S. District Court for the District of Columbia, lawyers for TD International say that Steven Fleischmann, a former diplomat and State Department analyst, began a scheme last June that ultimately diverted about $1.2 million from the firm.
According to the complaint, Fleischmann used a simple ruse that played off his firm’s abbreviated name. The “TD” in TD International stands for Tertium Datur, a Latin phrases meaning “third choice.”
In June, Fleischmann allegedly set up his own shell company called Tertium Datur International, spelling out the entire phrase. He then opened a bank account under its name, and began tampering with invoices for one of TD International’s clients, instructing them to make payments to the new account, according to the complaint.
When other members of the firm noticed money was missing, Fleischmann allegedly told them that the client was undergoing a “business reorganization,” and had yet to pay its invoices, the complaint states.
TD International, represented by Greenberg Traurig partner Sanford Saunders, has asked for an injunction against Fleischmann preventing him from accessing the account. They are demanding that Fleischmann return the money, and are asking for punitive damages. The firm, its lawyer, and Fleischmann did not return calls for comment. Fleischmann does not have a lawyer listed on the docket.
According to the complaint, Fleischmann joined TD International in 2004, and owned a 33% stake in the firm. The group advises multi-national corporations on issues such as crisis management and Foreign Corrupt Practices Act compliance.
UPDATE, MAY 19: As has become clear in court, there is a dispute over whether Fleischmann is still a partner with the firm. The firm says he is, which would bind him to the terms of his original partnership agreement, while Fleischmann says he is not.
Also, a clarification: TD International claims that Fleischmann diverted about $626,000 from their client into his personal account. But the firm believes it was cheated out of $1.2 million total, including $270,000 he was paid in salary and bonuses.
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