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Cry about this Joe? (How come this isn’t on the front page of the NYT?)
Biden’s Son, Brother Named in Two Suits
By Kimberly Kindy and Joe Stephens
Sunday, August 24, 2008; Page A09

A son and a brother of Sen. Joseph R. Biden Jr. (D-Del.) are accused in two lawsuits of defrauding a former business partner and an investor of millions of dollars in a hedge fund deal that went sour, court records show.

The Democratic vice presidential candidate’s son Hunter, 38, and brother James, 59, assert instead that their former partner defrauded them by misrepresenting his experience in the hedge fund industry and recommending that they hire a lawyer with felony convictions.

The legal actions have been playing out in New York State Supreme Court since 2007, and they focus on Hunter and James Biden’s involvement in Paradigm Companies LLC, a hedge fund group. Hunter Biden, a Washington lobbyist, briefly served as president of the firm.

A lawsuit filed by their former partner Anthony Lotito Jr. asserts in court papers that the deal was crafted to get Hunter Biden out of lobbying because his father was concerned about the impact it would have on his bid for the White House. Biden was running for the Democratic nomination at the time the suit was filed.

Hunter Biden was made president with an annual salary of $1.2 million, despite his inexperience in the hedge fund industry, the lawsuit said. Before that, he had been part of the Washington law firm Oldaker, Biden & Belair, which earned $1.76 million in lobbying revenue in the first half of 2006, according to Congressional Quarterly’s CQ MoneyLine. One of its biggest clients is the National Association of Shareholder and Consumer Attorneys, a District-based group representing law firms specializing in investment and corporate law.

Hunter Biden is one of many children and relatives of prominent members of Congress who have made their careers as lobbyists. He returned to lobbying after less than a year with Paradigm.

Lotito’s lawsuit alleges that James Biden called him in January 2006 to arrange a job for Hunter Biden. It says James Biden told him that his brother (Sen. Biden) “was concerned with the impact that Hunter’s lobbying activities might have on his expected campaign for the 2008 Democratic presidential nomination,” and, “Biden told Lotito that, in light of these concerns, his brother had asked him to seek Lotito’s assistance in finding employment for Hunter in a non-lobbying capacity.” …

In the hedge fund business deal, Lotito and the Bidens created a company called LLB Holdings USA and together agreed to pay $21.3 million for 54 percent interest in Paradigm.

In the lawsuit, Lotito said that soon after creating LLB, the Bidens crafted a “secret deal” to create their own company that was designed to buy out his shares in Paradigm for a low rate, to which he agreed. He said he knew nothing of the secret deal until later and now believes he was defrauded out of millions of dollars and his share in the company.

In the second lawsuit against the Bidens, which was filed in June, Lotito is also named as a defendant. Stephane Farouze, now an executive with Deutsche Bank, seeks $10 million, saying the Bidens and Lotito promised to buy his shares in the hedge fund company but reneged.