LEGAL – THE TRUE STORY

Milton Stanson has been involved in several legal actions with Vincent Iannazzo, a brilliant and charming young man he met in 1993. They became partners; Stanson viewed Iannazzo as a son and Iannazzo (Stanson thought) viewed him as a father. Their goal (Stanson thought) was to succeed in creative entrepreneurial ventures; Iannazzo’s goal, Stanson later discovered, was to use Stanson and his contacts and his assets to enrich himself.

 

In 1999, Iannazzo had a brilliant idea. He would buy, with funds from his partnership with Stanson, a waterfront estate in Florida to use to entertain potential investors in the partnership, such as a Saudi prince Iannazzo said he knew. Iannazzo put the title in his name. However, they did not use the property much, and in 2002 Iannazzo told Stanson that he had rented the house. Stanson later discovered that Iannazzo had sold the property for $2,795,000 and pocketed the proceeds. In the subsequent litigation (Iannazzo v. Stanson, Supreme Court of New York, New York County, Index No. 02/603807), Justice Ira Gammerman found that Iannazzo had engaged in a scheme to defraud Stanson, stemming from his belief that due to Stanson’s debilitating illness (Stanson had an inoperable, metastasized cancer and a serious heart condition), financial situation, and trust in Iannazzo, Stanson would be unable to resist his efforts. Justice Gammerman awarded Stanson damages of almost $1.1 million, representing his half of the net proceeds from the sale of the property, plus interest. New York’s Appellate Division affirmed this decision (8 A.D.3d 113), summarizing as follows: “Ample evidence supports the trial court’s findings that the Florida property was partnership property that plaintiff [Iannazzo] had sold but misrepresented to defendant [Stanson] that he had rented, that such misrepresentation was part of a fraudulent scheme by plaintiff to retain the property or the proceeds of its sale for himself.”

 

In 2004, the SEC accused Mr. Stanson and Mr. Iannazzo of having issued false press releases for EMEX, a company developing innovative gas to liquids technology. Although Mr. Stanson was not involved in day to day operations of the company or the issuance of these releases and believed them to be accurate, he was a director of the company and his lawyers advised him to settle the matter, which he did without admitting any wrongdoing, at a fraction of the cost and wasted time and effort needed for a trial.