Founder of New York Litigation Finance Firm Pleads Guilty to Multi-Million Dollar Securities Fraud Scheme | USAO-SDNY

Audrey Strauss, United States Attorney for the Southern District of New York, and Philip R. Bartlett, Inspector in Charge of the New York Division of the United States Postal Inspection Service (“USPIS”), announced that JAESON BIRNBAUM, an attorney and founder of Cash4Cases, Inc., a bankrupt litigation finance company headquartered in New York, New York, pleaded guilty to securities fraud today before U.S. District Judge Paul A. Crotty. BIRNBAUM admitted in its plea that it used investor funds for its own purposes and promised the same case recovery as collateral to multiple parties.

US lawyer Audrey Strauss said: “Jaeson Birnbaum has duped investors through a series of lies about his litigation finance company, Cash4Cases. He used Cash4Cases to steal money for himself, then tried to cover up his scheme by ordering a subordinate to forge books and records. Birnbaum is now awaiting conviction for his fraudulent conduct.

USPIS Inspector Philip R. Bartlett said: “Everything Mr. Birnbaum told his investors was a lie based on the idea of ​​a good investment. Postal inspectors see these cases all the time and remind investors to carefully check the fine print of any investment offer, and if the return seems too lucrative or unreal, skip it to make sure your money is used to fund your investment. lifestyle and not that of the criminal. “

According to information and statements made in court:

From at least in or around 2017 until or around 2019, BIRNBUAM has secured more than $ 3 million in investments for Cash4Cases on the basis of fraudulent misrepresentation. These investments were in the form of promissory notes, known as “Investor Security Agreements” (“ISA”), which purported to provide affected investors with security over recoveries associated with certain specified lawsuits which were ostensibly purchased by Cash4Cases. In fact, in some cases lawsuits that were never funded by Cash4Cases or BIRNBAUM had already promised their recovery to other parties.

To help perpetrate his fraud, BIRNBAUM ordered an employee to falsify his company’s books and records to make it appear that recoveries from already paid lawsuits were still available to be pledged as collateral to new investors.

BIRNBAUM has also embezzled a substantial portion of investor funds for its personal use and to make promised payments to previous investors. As an example, BIRNBAUM secured a $ 1 million investment for Cash4Cases in September 2019. Prior to this investment, BIRNBAUM told the investor that Cash4Cases would use the money exclusively for advances to litigants. However, contrary to this depiction, on the same date that Cash4Cases received the $ 1 million investment, BIRNBAUM used the money to send a wire transfer of $ 530,000 to purchase a home in New Jersey. .

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BIRNBAUM, 47, of Boca Raton, Florida, faces a maximum sentence of 20 years in prison.

The potential maximum sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any conviction of the defendant will be determined by the judge. BIRNBAUM is to be sentenced before Judge Crotty on January 6, 2022, at 12:00 p.m.

Ms. Strauss praised the investigative work of the USPIS. Ms Strauss also thanked the Securities & Exchange Commission, which today filed a civil action against BIRNBAUM in federal court in Manhattan.

This case is being handled by the Bureau’s Securities and Commodities Fraud Working Group. US Assistant Prosecutor Daniel Loss is in charge of the prosecution.

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