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Thursday, June 28, 2012

Former Tax Attorney's Spending Spree Will Cost Him -- and Taxpayers

GoldfarbThe Recorder, Former Tax Attorney's Spending Spree Will Cost Him -- and Taxpayers:

It seemed as if the worst was behind him. But a former tax attorney and hedge fund manager who had settled investment fraud charges is back in court fighting the feds.

Lawrence Goldfarb, accused of misusing funds at his company, BayStar Capital Management, is supposed to be paying $14 million to investors as part of a deal with the SEC. Instead, he's spent lavishly on basketball tickets, chartered flights and a Pottery Barn shopping spree, court records say.

That didn't sit well with U.S. District Judge William Alsup, who recently held Goldfarb in civil contempt and even contemplated, but decided against, locking up the Marin County man. "The record is clear that, at least since entry of the final judgment in March 2011, defendant Goldfarb has spent hundreds of thousands of dollars on various personal indulgences, instead of paying down the outstanding balance on the final judgment," Alsup wrote in a June 20 order. The judge detailed spending on luxury hotels, an $11,666 engagement party at Goldfarb's San Anselmo home and more than $100,000 on Golden State Warriors tickets.

Goldfarb has paid only $80,000, plus interest, toward the SEC judgment, and instead used his resources "to continue to support his luxurious lifestyle," Alsup's order says. And now he's apparently so broke that taxpayers will have to pick up his legal bills. ...

Goldfarb had previously worked at Skadden, Arps, Slate, Meagher & Flom and at Milbank, Tweed, Hadley & McCloy, his website says.

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