A former in-house lawyer in Houston who was charged in June 2012 with stealing more than $9.3 million from his company was denied bond this morning.
Judge Maria Jackson of the 339th District Court denied bond to Anthony Chiofalo, who turned himself in to authorities in December 2012, seven months after the Harris County District Attorney’s office issued an arrest warrant for him.
Paul Doyle, a criminal-defense attorney in Houston who represents Chiofalo, told reporters his client was living undetected in a garage apartment in Rhode Island but turned himself in because he is ready to “take responsibility for what he did.”
“He also wants to cooperate with the company,” Doyle told reporters after Chiofalo’s court appearance.
On Jun 7, 2012, the Harris County District Attorney’s office filed probable cause complaints against Chiofalo and his wife, Susan Chiofalo, charging both with “theft-aggregate. Susan Chiofalo is out on $100,000 bond.
The complaints allege Anthony Chiofalo started work at Tadano America Corp. (TAC) in Houston on Jan. 20, 2009, as head of legal affairs and human resources, and in that role he was responsible for managing TAC’s litigation. In April 2011, the complaints, allege, Anthony Chiofalo created a “fictitious law firm” called Maio & Cardenas LLC and filed documents with the Texas secretary of state that listed him as the registered agent and managing member.
The complaints allege that from May 6, 2011, through May 11, 2012, Anthony Chiofalo “caused a series of checks made payable to Maio & Cardenas LLC to be issued by TAC” and those “unauthorized checks” totaled $9,329,546.81.
According to the complaints, Anthony Chiofalo used $1,888,777.94 of the money to buy several items from Heritage Auctions from Feb. 7, 2012, to April 5, 2012, including “numerous paintings, sculptures, artwork, photographs, collectables, comic books, memorabilia.” Those purchases were delivered to Anthony Chiofalo at a storage unit facility in Spring on April 27, 2012, the complaints allege.
Houston lawyer Philip Hilder, who was hired by TAC in 2012 to conduct an internal investigation into what he described in June 2012 as an “uncharacteristic spike in litigation” says the company has recovered assets, including collectibles, that potentially are worth millions of dollars, but Hilder is not confident the company can recover all of the $9.3 million.
On Aug. 27, 2012, Jackson signed an order authoring the seizure of items from several storage units the order describes as controlled by Chiafalo and his wife and awarded the items to TAC as “partial restitution.” The order includes an 84-page exhibit list of items to be seized.
“We’re still pursuing leads,” says Hilder, of Hilder & Associates of Houston.
Martina Longoria, an assistant district attorney in Harris County who is prosecuting the Chiofalos, says she cannot put an estimate on the value of the items that have been recovered.
“We are going to have to determine the current market value and sell at auction. . .,” she says. “Unfortunately, a lot of the collectibles are worth what someone is willing to pay for them.”
When asked whether Chiafalo told Doyle why he did this, Doyle says it was like an “obsessive-compulsive” thing: “It started small. It got easier and got bigger,” he says.
Doyle, of Paul Doyle & Associates of Houston, told reporters that Chiofalo wants to cooperate with TAC to recover the assets.
Doyle told reporters Susan Chiofalo is “totally and completely innocent.”
Susan Chiofalo’s attorney, Houston solo Luci Davidson, did not immediately return a call seeking comment.
The complaints also allege that the New York State Bar suspended Anthony Chiofalo from the practice of law for two years beginning in October 2010. The complaints note that, according to TAC, the company thought Chiafalo was a licensed attorney the entire time he worked for TAC.
Susan Chiofalo is scheduled to be arraigned on Jan. 11, and Anthony Chiofalo’s arraignment is set for Feb. 14, according to online court records.
— Brenda Sapino Jeffreys
Editor's note: This blog has been corrected regarding the year in which Hilder was hired to conduct the internal investigation.
Comments