California woman's lawsuit accuses Chicago lawyer of conspiring to con her out of millions

By Scott Holland | Oct 21, 2016

A California woman who says she was swindled out of more than $6 million as the victim of a plot worthy of a television drama has filed a Cook County Circuit Court complaint against a Chicago firm and one of its attorneys.

A California woman who says she was swindled out of more than $6 million as the victim of a plot worthy of a television drama has filed a Cook County Circuit Court complaint against a Chicago firm and one of its attorneys.

Carrie Birkel introduced her complaint against Edward McNicholas and the Chicago firm Sidley Austin LLP by alleging “a truly bizarre set of circumstances that would seem more appropriate for an episode of ‘Law and Order’ than in reality.” 

Birkel traces the issue to late January 2014. She said she was in a restaurant near her California home when a man identified as Joseph Dean Garcia approached her, praising his company, Strategic Investigative Services, and his experience as a Navy SEAL. Within two weeks, “unprompted and unrequested” — although she said she told him she believed her husband of 17 years was unfaithful — “Garcia produced photographs of Birkel’s husband in a compromising position with another woman.” 

Garcia, whom Birkel said had an office at Sidley Austin’s office in Washington, D.C., later introduced Birkel to McNicholas. Birkel also said Garcia had “a Sidley Austin business card, and his company, Strategic Investigative Services, was listed as protected by Sidley Austin’s work-product privilege” in the engagement letter McNicholas sent requesting a $250,000 retainer for Sidley Austin to represent her nephew in a criminal matter in Marin County, Calif. 

While Birkel didn’t retain McNicholas or the firm for that case, she did pay a $25,000 retainer and have McNicholas arrange “for representation by a Chicago family law attorney who conducted private mediation of Birkel’s divorce, which was concluded in October 2014.” That lawyer was identified as Saundra Rice. Birkel, who said she had limited knowledge of her finances while married, learned she was in line for a $10 million divorce settlement. 

Birkel said Garcia arranged for a meeting at Sidley Austin’s Washington office “with McNicholas and others concerning Birkel’s potential investment” in a venture identified as ToyBox Technologies. She said McNicholas never told her Sidley Austin represented ToyBox and incorporated it on Garcia’s behalf in July 2014. She said the men pressured her to invest in ToyBox based on a Department of Defense contract “that would pay out millions in profits.” 

On Oct. 17, 2014, Birkel alleged she spent $5 million to buy 1,250 ToyBox shares and also provided a $1 million loan. But on Nov. 17, 2014, Garcia and his wife, Karen Kay, were indicted in federal court in Georgia for wire and mail fraud schemes dating to 2009. They eventually pleaded guilty, and Garcia got a 37-month prison sentence; Kay was given 12 months. Birkel said Garcia never told her of prior convictions for wire and mail fraud. 

Birkel, who on Feb. 11, 2015, gave ToyBox an additional $300,000 for its legal expenses, alleged “the purported DOD contract was a complete work of fiction from start to finish,” used only to get money from Birkel. Her complaint detailed the way Garcia spent Birkel’s money, such as renting an expensive home and buying “numerous luxury automobiles,” and said she’s recovered almost $4.8 million of her ToyBox investment but still seeks more than $1.5 million. 

The complaint includes one count of legal malpractice, in that McNichols revealed information to Garcia that led directly to her financial damages, failed to disclose his relationship with Garcia and ToyBox and continued to provide her legal advice after their client relationship should have terminated. It also includes counts of aiding and abetting fraud, conspiracy to commit fraud and breach of fiduciary duty. Birkel seeks actual and exemplary damages, as well as legal fees. 

Birkel’s attorney is Edward X. Clinton Jr., of Clinton Law Firm, of Chicago.

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Sidley Austin LLP The Clinton Law Firm

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