New York Daily News
ONE PITCH HE CAN’T FIGHT OFF
A-Rod’s battle with ex-bro-in-law could end up in Florida court showdown
Like a modern-day Forrest Gump, former Yankee Alex Rodriguez seemed to be anywhere and everywhere in the nation’s capital Wednesday, when Joe Biden was sworn in as the 46th president.
There was A-Rod in a (what else?) pinstriped suit, aviator sunglasses and a mask taking a selfie in front of the Capitol, an image he posted on social media with the hashtag “inauguration2021.” When Biden stood at the lectern, Rodriguez was seated with fiancée Jennifer
Lopez (who performed at the ceremony) behind the new commander-in-chief and to his left.
One photo showed Rodriguez giving a fist bump to former President Barack Obama while another image had the starcrossed slugger lounging on the Capitol steps with Lopez.
45, has put his sordid past in the rearview mirror — lying to radio personality Mike Francesa in 2013 about his performance-enhancing drug use in the Biogenesis scandal, front-page tabloid headlines involving a dalliance with a stripper, kissing himself in a mirror for a “Details” magazine spread, suing Major League Baseball and the players’ union before serving a year-long doping suspension in 2014 are some of those personal and professional pockmarks. He’s transitioned into a broadcast career and has multiple other business pursuits. He and Lopez even made a run at buying the Mets last year before Steve Cohen used his billions and financial clout to take the ownership reins of the Queens baseball club.
But one legal matter continues to dog Rodriguez over five years after the original civil complaint against him was filed in Florida state court. The plaintiff is Constantine Scurtis, the younger brother of A-Rod’s ex-wife, Cynthia, and the dispute stems from a real estate venture the two men started in 2003. That year, Rodriguez was still playing for the Texas Rangers and won his first of three MVP awards, although he later admitted to using banned substances during the three seasons he played for Texas (2001-03).
By 2008, Rodriguez was divorcing Cynthia, the mother of their two daughters, and that same year, Scurtis was ousted from ACREI (Alex Constantine Real Estate Investments), according to the complaint. Only a couple months after Rodriguez finished serving his suspension for the entire 2014 season, Scurtis filed his complaint, accusing A-Rod of breach of fiduciary duty and unjust enrichment, among other claims.
“This is the last thing in the world I want to do,” Scurtis told the Daily News in 2015, when discussing the lawsuit. “I’m not trying to draw attention to myself. But what’s right is right.”
Since those remarks, the complaint has survived Rodriguez’s multiple motions to dismiss. The ex-Yankee’s 2018 rebuke that the suit is “frivolous,” and that Scurtis “has gotten absolutely nowhere with it in court,” has proven hollow. In perhaps one of the most explosive developments, A-Rod is accused of racketeering and civil theft in a recent claim added to the complaint. A Florida civil RICO (Racketeer Influenced and Corrupt Organizations Act) claim is one of 59 counts in the filing.
Scurtis has also hired a new legal team to represent him, and two of the attorneys that are part of his counsel, Katherine Eskovitz and Eric Rosen of Roche Cyrulnik Freedman LLP (RCF), are former federal prosecutors. Rosen led the federal case — the college admissions bribery scandal dubbed “Operation Varsity Blues” — that ensnared celebrity actresses Lori Loughlin and Felicity Huffman.
Meanwhile, the current judge presiding over the Scurtis/Rodriguez case, Michael Hanzman, has set a firm trial date for early August, and has signed an order that there be no further delays. There is a mediation hearing scheduled for March, although there has been no indication of any settlement talks in the years since Scurtis first filed.
If the case goes to trial and Rodriguez were to lose, the former slugger stands to take a significant financial hit, not to mention the potential dent it would cause to his reputation. But Scurtis has significant challenges ahead of him, too, including successfully proving the RICO claim. His legal team potentially introducing a mountain of complex financial information to jurors in trial could prove daunting as well.
Rodriguez’s attorney for this matter, John Lukacs Sr., called the latest claims against his client nothing more than a “shakedown.”
“After six years, Scurtis recently terminated his team of four lawyers and engaged new counsel to amend his complaint for a fourth time,” Lukacs said in a statement to the News. “Sadly, Scurtis expanded his claims yet again to include and publicly sensationalize additional allegations as part of his scheme to impugn and shakedown Rodriguez for money which Scurtis is not entitled to and to escape repayment of substantial monies owed which is the subject of a countersuit against him. To be clear, we view Scurtis’ claims as baseless and absolutely dispute liability for all claims asserted.”
Scurtis declined comment. Cynthia Rodriguez, A-Rod’s ex, did not return a call seeking comment, nor did John Scurtis, the family patriarch.
The latest amended complaint opens with a tabloid-worthy salvo — “Defendant Alex Rodriguez, a
former Yankees baseball player, is a serial cheater and liar,” reads the first sentence. The second page of the complaint has a photo of Scurtis and Rodriguez seated with billionaire investor Warren Buffett and Rodriguez associate Jose “Pepe” Gomez, from 2006. The News featured the same photo in a 2015 story on the case, in addition to including portions of the 2006 letter Buffett wrote to A-Rod, praising his, Scurtis’ and Gomez’s investment skills.
“What kind of case is this? Scurtis makes incendiary personal allegations that Rodriguez is a bad guy and cheated him. So does that mean Scurtis is entitled to a lot of money? If you look past the sensationalized allegations to the legal substance, it looks like a boring old accounting and valuation case,” said Chris Manderson, a Los Angeles-based corporate attorney who is not connected to this case. “Scurtis essentially alleges that Rodriguez and his cronies wrongfully sold assets at deflated values, failed to make distributions, and thereby deprived Scurtis of what he deserved. These are questions of valuation and accounting, not telenovela.”
The complaint outlines how Scurtis was bilked out of his “financial interests in the partnership” through alleged misconduct by Rodriguez and his “co-conspirators,” which include Stuart Zook, another defendant. The complaint also details the alleged mortgage and insurance fraud carried out by Rodriguez and Zook in the wake of Hurricane Ike pounding western Florida in September 2008.
According to the complaint, Newport Property Ventures (the operating arm of ACREI) employees “fraudulently” wrote rent checks for Newport properties in Tampa, in an effort to inflate tenant rolls there. The complaint states how Zook allegedly ordered two sets of accounting records to be set up after Ike’s devastation — “the first set of records would reflect the actual damage caused by the Hurricane, and the second set of records would reflect inflated damages that the Partnership would report to its insurance broker, Marsh & McLennan,” reads the complaint.
The complaint says that when the business partnership was formed, Rodriguez “proposed that he would own 95% of the Partnership’s equity and Scurtis would own the other 5%.” But Manderson says there might be some challenges for Scurtis’ legal team with regard to some of the claims of financial wrongdoing.
“If you’re a member of an LLC (Limited Liability Company), you can actually have income attributed to you, which you have to pay taxes on, without ever getting the money,” said Manderson. “The reason is the LLC itself is a partnership for tax purposes and is not a taxpayer. Rodriguez holds 95% of this LLC and Scurtis has 5%, according to the complaint.
“However, if that LLC’s governing agreements did not require minimum distributions to pay taxes, then Rodriguez didn’t necessarily do anything wrong,” added Manderson. “The LLC members would have an obligation to pay taxes on their share of partnership income, not the amount actually received.”
Racketeering is a crime people most often associate with the Mafia. Why did Scurtis add a RICO claim at this juncture? One reason may have been to raise the anxiety factor for Rodriguez.
“What (the plaintiff) has alleged is essentially a white collar criminal case in civil court. It seems pretty clear that the strategy is to increase exposure by adding a treble damages claim,” said John Floyd, a partner at the Atlanta law firm Bondurant Mixson & Elmore LLP, and a leading authority on racketeering in this country. “(The plaintiff and his counsel) have taken those original claims to the next level by saying, ‘This was actual calculated criminal conduct.’ It seems they’ve added a more threatening claim on top of an existing body of facts. They will have to prove it by clear and convincing evidence, a higher burden than usually applies in civil cases.
“It will be challenging, and will require presenting a lot of complicated financial information,” added Floyd, who is also not connected to the Scurtis/Rodriguez matter.
Scurtis’ new counsel declined comment beyond the statements released earlier this month.
“Mr. Rodriguez will face a jury on August 2, 2021, to answer claims that he and his co-conspirators engaged in a pattern of racketeering and embezzlement, gravely damaging a legitimate and successful family real estate business that Constantine Scurtis built through hard work and savvy investment decisions, as laid out in the complaint,” said Eskovitz, an RCF partner.
It’s possible that Rodriguez could be deposed between now and the start of trial — if no settlement is reached — which could lead to many aspects of his past being made public in court filings or perhaps in testimony during trial. A courtroom setting would be a long way from the Capitol steps and inauguration hashtags.