More than two years after discovering an office manager and other employees allegedly embezzled more than $10 million, a Queens, N.Y., dealership group can now go after its former longtime accounting firm for the money, a federal judge has ruled.
U.S. District Judge Edward Korman said in a March 25 ruling that the group can pursue a $10 million professional malpractice suit against the accounting firm, Voynow, Bayard, Whyte and Co., accusing it of failing to notice that "key accounting employees" were embezzling millions of dollars.
In his ruling, Korman said the complaint "sufficiently alleges that Voynow departed from industry standards. It is plausible that Star Auto would not have suffered damages but for this negligence." He dismissed a breach-of-contract claim, saying it duplicates the malpractice claim.
The judge's decision rebuffed a request to dismiss the suit from the Trevose, Pa., accounting firm, which had provided accounting services to the dealership group since 1996, according to the suit.
The group, which does not have its own corporate name, has seven dealerships: Star Toyota, Star Subaru, Star Hyundai, Star Nissan, Star Chrysler-Jeep-Dodge, Star Fiat and Star Mitsubishi.
Accounting firm partner Hugh Whyte and firm lawyer Nicholas Chrysanthem of New York City, declined to comment. The Star group's lawyer, Barry Friedberg of New York City, said he couldn't discuss pending litigation.