A judge has thrown out a plea by Alex Rodriguez to squash racketeering and embezzlement allegations against him in his $50million court battle with his former brother-in-law, DailyMail.com can reveal.
The baseball legend filed to have the claims dismissed after bombshell legal papers accused him of ‘criminal activity’ during his alleged fraudulent takeover of the property empire he built with Constantine Scurtis.
But a Miami judge Thursday ruled the allegations contained in an amended complaint by Scurtis will remain – saying: ‘Defendants’ motion to dismiss is denied.’
Rodriguez, 45, will now have to answer to those allegations at a civil jury trial set for August 2.
The move is a stunning blow to the former New York Yankee turned business tycoon, who could face a maximum 30 years in jail if he ever faced a criminal investigation over the civil racketeering claims.
Alex Rodriguez is being sued for $50million by his ex-wife Cynthia’s brother Constantine Scurtis (right). A-rod is pictured with Scurtis (far right) meeting with Jose Gomez and Warren Buffett in Omaha in 2006
A-Rod met Scurtis’s sister Cynthia, 47, in a Miami gym in 1999 and the couple wed in 2002, but they divorced in 2008 after allegations of affairs – which he has consistently denied
DailyMail.com revealed last month that Scurtis accused A-Rod of embezzlement and racketeering in a court filing Now we can reveal that a judge has thrown out a plea by A-Rod to squash the racketeering and embezzlement allegations against him. A-Rod and fiancee JLo are pictured together
A-Rod could also have a huge chunk of his $350million fortune seized if convicted under the Racketeering and Corrupt Organizations Act (RICO).
DailyMail.com has reached out to A-Rod’s lawyers for comment regarding the judge’s ruling.
When DailyMail.com revealed A-Rod was facing the racketeering allegations, his lawyers said: ‘After six years, Scurtis recently terminated his team of four lawyers and engaged new counsel to amend his complaint for the fourth time.
Scurtis alleges the former Yankee fraudulently cut him out of the real estate empire they built together after A-Rod and Cynthia divorced in 2008
‘Sadly, Scurtis expanded his claims yet again to include and publicly sensationalize additional allegations as part of his scheme to impugn and shakedown Rodriguez for money which Scurtis is not entitled to and to escape repayment of substantial monies owed which is the subject of a countersuit against him.
‘To be clear, we view Scurtis’ claims as baseless and absolutely dispute liability for all claims asserted.’
A source close to the case told DailyMail.com: ‘Legal experts often say RICO is a catch-all area and can be hard to prove. The judge has just shown he is taking this very seriously and these are not frivolous accusations.’
New lawyers for Scurtis made the civil racketeering allegations in a fourth amended complaint to the court last month in a case that has been rumbling since 2014.
Judge Michael Hanzman said in his latest ruling: ‘This was the plaintiffs’ last opportunity to amend and the issues to be tried will be framed by, and only by, the claims raised in plaintiffs’ current complaint. No further amendments will be permitted.’
Less than a week after the racketeering allegations were filed, Rodriguez’s legal team hit back asking for them to be dismissed.
They said the amended complaint ‘continues to contain impertinent and scandalous statements clearly intended to harass and prejudice the defendants.’
‘In amending his pleading, Scurtis has taken the opportunity to sensationalize this litigation solely to publicly humiliate, impugn, and disparage Mr. Rodriguez and others.’
Documents show a judge’s dismissal of A-Rod’s plea. A-Rod will have to answer to those allegations at a civil jury trial set for August 2
Scurtis’s legal team had said: ‘This case arises out of (Rodriguez’s) breaches of fiduciary duty, breaches of contract, and illegal and fraudulent pattern of criminal activity.’
This allegedly included ’embezzlement, obtaining property by fraud, insurance fraud, forgery, mail fraud and wire fraud’
‘Through their racketeering, Rodriguez and his co-conspirators have caused Scurtis many millions of dollars in damages.’
They also accused the sports hero fiancé of superstar Jennifer Lopez of being a ‘serial cheater and liar.’
But Hanzman blasted them for those remarks in his latest ruling and ordered them to be withdrawn – saying the court would not ‘devolve into a soap opera’.
Scurtis also accused the sports hero fiancé of superstar Jennifer Lopez of being a ‘serial cheater and liar’
He said it was ‘fair game’ for them to allege Scurtis felt he was being cut out of the $1billion business after the breakdown of his sister Cynthia’s marriage to Rodriguez in 2008.
However he added: ‘But plaintiffs’ pleading goes further – indeed much further – than necessary to make this point alleging that: (a) Mr Rodriguez is a ‘serial cheater’ who lied to his spouse about alleged ‘affairs’ … (b) that ‘in the beginning of 2007 rumors of Mr Rodriguez’s infidelities began to jeopardize (his) marriage’… (c) that ‘in January 2007 the New York Post reported that Rodriguez had been caught entering a hotel room with a stripper’… (d) that Rodriguez’s ‘full-throated denial of the allegations of marital infidelity… gave Scurtis confidence that Rodriguez was telling the truth’ about his marital fidelity.’
The judge concluded: ‘These allegations of alleged marital infidelities are wholly irrelevant to the question of whether Mr Scurtis has been wrongfully cut out of the real estate venture(s) formed between himself and Mr Rodriguez.’
He said they were ‘for purposes of embarrassing Mr. Rodriguez and teeing up the argument that because Mr. Rodriguez has a ”propensity” to cheat, he likely ‘cheated’ Mr. Scurtis out of his rightful ownership interest(s).
‘In sum, these scandalous and sensationalized allegations are irrelevant to the issues pled in this commercial dispute.
‘This case will not devolve into a soap opera.’
Cynthia alleged in her Miami court filing that the marriage was ‘irretrievably broken because of extra-marital affairs and other marital misconduct’. Pictured in 2012 with their daughters
A-Rod met Scurtis’s sister Cynthia, 47, in a Miami gym in 1999 and the couple wed in 2002, but they divorced in 2008 after allegations of affairs – which he has consistently denied.
The legendary slugger – a celebrity investor on ABC’s Shark Tank for two seasons – set up in business with real estate expert Scurtis a year after his wedding in a partnership ‘done on a handshake’.
The star put in all the money for a 95 percent stake, according to their original agreement. Scurtis was given five percent because of his expertise, plus a three percent acquisition fee on properties.
Their Miami-based business, whose operating arm was called Newport Property Ventures, exploded. By 2008 the pair were handling 5,000 apartments and other units in a $1billion empire, according to court documents.
But Scurtis claims that in 2005 A-Rod convinced him to defer the three per cent acquisition fees he was due so the money could remain as liquid cash in the business. He says that alone cost him $8million.
He also claims Rodriguez later cut him off from massive earnings by taking his name off some of the individual LLC companies they had created for each project without his knowledge.
It was after A-Rod’s 2008 divorce from psychology graduate Cynthia that Scurtis alleges he was fraudulently shoved out of the real estate empire and denied profits.
His lawyers say they uncovered the alleged criminal acts during investigations for the long-running civil case.
They say A-Rod took into the business Stuart Zook and childhood friend Jose Gomez, who is not individually listed as a defendant in the case.
The attorneys alleged in their court filing last month that ‘quickly and unbeknownst to Scurtis at the time, Rodriguez, Zook and Gomez had corrupted the business and began to operate through a pattern of criminal racketeering activity.
If A-Rod loses he could face a criminal investigation and lose a huge chunk of his $350million fortune, legal sources have told DailyMail.com
‘They immediately implemented two fraudulent schemes, which Scurtis only learned of due … to this litigation.’
The court filing claimed A-Rod and his ‘co-conspirators’ then ‘devised a scheme to deprive Scurtis of control of the general partnership entities that he alone controlled.’
The document also claimed Rodriguez and Zook embezzled real estate assets from the partnership by selling then to themselves at knockdown prices.
They are also accused in the legal papers of filing false K-1 forms with the IRS, which records each partner’s share of a partnership’s earnings.
A-Rod has filed a counter claim to the Miami court, saying Scurtis took $1.4million out of the business without authorization in 2004 and 2005.