A team of Reed Smith lawyers led by Steven Cooper has helped secure a trial win that exceeds $50 million, after persuading a federal judge that money lent for an agricultural project in Russia instead had been used for fraudulent purposes.
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For more than a decade, British billionaire businessmen and philanthropists David and Simon Reuben pursued investment advisor and manager Elliot Daniloff for failing to pay back a $25 million loan the Reuben brothers provided for the purpose of developing a major agricultural infrastructure project in Bashkiria, Russia.

Reed Smith partner Steven Cooper, along with senior associates Zachary Kaye and Casey Olbrantz, last fall conducted a trial in the Southern District of New York before Judge Victor Marrero. Cooper’s full day cross-examination of Daniloff led the court to describe him as “not a credible witness” whose “testimony was often inconsistent or contradictory” and whose explanations were “unpersuasive.”

Daniloff had asserted that the brothers’ money was an investment in one of his funds and didn’t need to go to the agricultural project. The Reubens, helped by Cooper, Kay and Olbrantz, showed that much of the brothers’ investment went to fund Danilov’s lavish personal lifestyle.

What made this victory remarkable was that, according to Cooper, the parties had no loan documents: "David Reuben entered into this agreement with Elliott Daniloff on a handshake, there were no written loan documents, no promissory note, no contract. Despite the fact that we had no loan documents, and in fact the money had gone into Mr. Daniloff's hedge fund, the judge nonetheless found that it was a loan and that not only was there a breach of the loan agreement, that there was a fraud."

David and Simon Reuben are former commodity traders with sizeable real-estate and hospitality holdings in the United Kingdom.

Judge Marrero found Daniloff’s fraudulent misconduct to be “gross, wanton and willful,” meriting an award of compensatory and punitive damages to remedy the Reuben brothers. The court even instructed the Reuben brothers to apply for an award of attorneys’ fees and costs.

The court’s decision is a total victory for the Reuben brothers, who feel vindicated after being defrauded and misled for years. See coverage in Law360.

The case is Bloomfield Investment Resources Corp. v Daniloff; 1:17-cv-04181-VM-SLC (S.D.N.Y. May 23, 2023).