Broker Disappears, $100M Missing

Naperville Attorney John J. Malm represented the specific legatees under a Will in a contested probate trial in a DuPage County Court, where Frank D. Gruttadauria had been serving as Executor of the multi-million dollar decedent’s estate. Gruttadauria, the Lehman Brothers broker, had previously managed money for the elderly woman during her lifetime. The trial in DuPage County was unrelated to Gruttadauria’s yet undiscovered securities fraud, but Gruttadauria’s behavior as executor of the estate appeared strange.

The issues presented at trial involved an apparent fraud surrounding two invalidly-executed deeds conveying the decedent’s California property, which were recorded before the decedent passed away. According to attorney John Malm, “we never suspected Gruttadauria had anything to do with the deeds, but we could not understand his odd behavior. As the executor of the estate, Gruttadauria was supposed to work with us in marshalling and recovering assets, especially if someone was stealing from the estate. Instead, he was ignoring compelling evidence of forgery and fraud, which we had uncovered for our clients. His testimony was, at times, particularly evasive, and I sensed he was lying about what he might have known. Why was he afraid to bring attention to what was happening inside the estate? What was he hiding?”

After the trial concerning two fraudulently-executed real estate deeds (which I, along with co-counsel, won for our clients), Gruttadauria’s attorneys placed an urgent call and advised us that “Frank” would never be seen or heard from again. The strange message was accompanied by the suggestion that we pick up a copy of a newspaper in the morning and “read all about it.”

“I recall that he made the cover The Wall Street Journal after faking his own disappearance near his Cleveland office. I was surprised -- not at the nature of his reported actions -- but that his scheme in defrauding investors had been so successful, and for so long. After all, he hadn’t held up very well to simple questions about his role as an executor. The clever, well-dressed millionaire was no longer able to perpetuate the elaborate, but fragilely-constructed, scheme of fraud that was so vital to his well-appointed lifestyle.”

“I remember that we took a copy of The Journal with us to court the very next day. It was surreal. I produced the newspaper article concerning Gruttadauria’s reported disappearance as Exhibit ‘A’ to our petition to remove Gruttadauria as executor, for good cause. His attorneys did not oppose the petition, and Frank was removed from office by order of court, immediately.”

“We later learned that Frank Gruttadauria had been hiding out near a ski resort, where he remained until he finally turned himself in to the FBI. My advice: If your broker has his own private jet, and he won’t allow you to see your account statements on-line, you should probably consider a different broker.”