Monticello broker sued for $2 million

Narrowsburg man charges fraud

By FRITZ MAYER

WHITE PLAINS, NY — According to court-filed documents, Frank Owens, a Tusten resident, has filed a lawsuit against local stockbroker Lloyd Barriger, the Gaffken Barriger Fund and other parties seeking at least $2 million in restitution. The complaint, filed in federal court in White Plains by a New York City law firm, alleges that Barriger and his associates defrauded Owens by investing $2 million of Owens’ money in a high-risk fund. According to the complaint, Owens’ investments in the fund were frozen in March, interest payments were stopped and Owens has not been able to access any of his money since.

The complaint says that Owens, who worked for 27 years as a fashion photographer in Manhattan, sold some property in the city and had some funds to invest. On the advice of his lawyer, Owens met with Barriger once on September 27, 2007 and said that he was seeking a “safe, low-risk investment.”

Barriger suggested that Owens move his money into the Gaffken-Barriger Fund and said that he would personally guarantee that Owens would receive an eight percent return and that he could gain access to the principal at any time with 48 hours’ notice. The next day, Owens instructed his lawyer to wire $2 million to Barriger.

The interest payments came as promised for a few months, but then, as previously noted, the fund came into serious trouble and assets were frozen. Barriger, according to the complaint, should have known about the trouble facing the fund when he accepted Owens’ $2 million in September 2007.

The complaint alleges that there was fraudulent misrepresentation. It says, “Defendants represented to Owens that the investment Lloyd intended to put Owens’ money in was a safe, highly liquid investment vehicle.” Instead, it claims “Defendants failed to disclose that the fund was investing heavily in real estate and most notably in the sub-prime mortgage market, which at the time of Owens’ investment, was already very publicly in crises…”

A March 5 letter from the fund revealed that “the bulk of the fund’s portfolio was comprised of commercial real estate loans… and that the fund was not receiving payments on many of the loans and was foreclosing on properties and reselling them in order to collect the outstanding debt at a time when the real estate market was slow.”

Further, the complaint alleges that Owens never received any documents explaining the fund and he did not sign any papers allowing anyone to invest his money in the fund.

Another defendant who was named throughout the lawsuit was Andrew McKean who, according to an obituary, was a mortgage loan officer with Gaffken Barriger and had previously worked as a loan officer for the First National Bank of Jeffersonville. McKean died on September 27 and the details of his death have not been made public.

The lawsuit was filed on October 1. Owens’ lawyer, Lanie Cohen, told The River Reporter that when she filed the suit she was not aware that McKean had died. She said she and her client have not yet determined how that might change the lawsuit going forward.

Barriger said that he had been advised by legal counsel that because the Gaffken-Barriger Fund is a private company and not a public one, he should not comment on the case.