Fraud claims against Biden's son, brother settled

Chris Rizo Jan. 14, 2009, 3:56am

Joe Biden

NEW YORK - Claims have been settled that U.S. Vice President-elect Joe Biden's youngest son and brother defrauded a former business partner in a hedge fund deal that went sour.

Court papers say the case was ended last week "without cost to any party."

The case involved former lobbyist Hunter Biden and SimmonsCooper, which ranks as a top campaign contributor of Sen. Joe Biden, D-Del.

Hunter Biden and Joe Biden's brother, James Biden, had, at the time the senator was campaigning for the Democratic presidential nomination, tried to gain 10 percent interest in the New York hedge fund Paradigm Capital Management Inc.

SimmonsCooper of East Alton committed $2 million to the deal but withheld half of the money amid concern that investment adviser Anthony Lotito Jr. was mismanaging the earlier funds.

Part of the deal was that Hunter Biden would be installed as the fund's chief executive officer, at an annual salary of $1.2 million. Hunter Biden is a former senior vice president of Wilmington, Del.-based credit card company MBNA Corp.

Lotito sued the Bidens in 2007, claiming that he was cheated out of fees connected with the deal. Meanwhile, the Bidens accused Lotito of misrepresenting his expertise in hedge funds.

In May, New York County Justice Bernard Fried rejected the Bidens' claims.

"These counterclaims, conditionally pleaded, do not rest on a justiciable controversy, but seek only to foment uncertainty and chaos between the parties in the event that plaintiff is successful in presenting the main claims," Fried wrote.

A month later, the men appealed Fried's decision. The settlement, announced Jan. 8, is confidential, lawyers said.

Nicholas Gravante Jr. of the New York law firm of Boies, Schiller & Flexner LLP represented Hunter and James Biden. Attorney Brian Wille of New York's Kostelanetz & Fink, LLP represented Lotito.

More News