by Denise Civiletti
A Wading River attorney has been disbarred under a cloud of allegations that she misused millions of dollars being held in her escrow account.
Alice Phillips Belmonte, of Wading River, the subject of eight separate investigations being conducted by a state grievance committee, acknowledged in an affidavit filed with the court "that she could not defend herself on the merits" against the charges, according to a Feb. 27 decision of the Appellate Division in a disciplinary proceeding against Belmonte.
Belmonte tendered the resignation of her license, the court said in the decision published yesterday in the New York Law Journal.
Belmonte, whose law practice was in New York City, is the defendant in an $8.5 million federal lawsuit brought by 11 Florida plaintiffs alleging racketeering, fraudulent misrepresentation, breach of fiduciary duty, wire fraud, breach of contract and knowingly issuing bad checks.
The complaint, filed in federal district court last August, accuses Belmonte of improperly disbursing $7.1 million she held in trust on behalf of the 11 plaintiffs in connection with the purchase and sale of real estate portfolios. The plaintiffs say that in March and April last year, Belmonte issued $7.1 million worth of checks and wire transfers against accounts that contained no funds.
"On or about April 12, 2012, at a meeting in Orlando, Florida, Defendant admitted to Plaintiffs that all of Plaintiffs’ funds that had been held in the Trust Accounts had been released from the Trust Accounts and disbursed to other unknown persons in violation of the Agreements and that those funds could not be recovered," according to the complaint, which also alleges Belmonte "signed a notarized confession of judgment" in the amount of $8.5 million" on May 2, 2012.
The complaint names 10 "John Doe" co-defendants as unknown "persons who are agents or affiliates of" Belmonte.
The plaintiffs also filed an involuntary bankruptcy petition against Belmonte last fall. The federal racketeering suit has been adjourned pending the resolution of the bankruptcy case, according to online court records. The bankruptcy action is still pending.
In a separate but similar lawsuit brought in New York State Supreme Court in October, Belmonte, along with her sister Regina Phillips Munster, brother Robert Phillips, an associate, Steven Lifton, Lifton Financial Group LLC, Hamilton Capital Group LLC and 10 "John Does," are accused of "swindling" two Manhattan residents of hundreds of thousands of dollars in "a fraudulent investment scheme."
The complaint details alleged solicitations by Belmonte inducing "no risk" investments by the plaintiffs and alleged broken promises to repay their investments with interest — "double your money."
The plaintiffs accuse the defendants of making unauthorized transfers of the money that was to be held in escrow and of issuing bad checks to the plaintiffs, offered as repayment of their investments.
Belmonte's brother and sister as well as Lifton have all denied having any part in the alleged scheme.
Belmonte's husband and mother were active in Riverhead town politics. Her husband, William, was a Democratic town board candidate and the running mate of Supervisor Phil Cardinale in his first re-election campaign in 2005. He received 17 percent of the vote in a seven-way race for two council seats, losing to incumbent Barbara Blass and newcomer John Dunleavy. He was later hired as executive director by the Riverhead Industrial Development Agency, a job he left in October 2008.
Belmonte's mother, Lois Phillips, also an attorney, mounted two unsuccessful campaigns for Riverhead Town Justice, in 2000 against Allen Smith and in 2003 against Richard Ehlers. Phillips passed away in July 2008.
Belmonte was admitted to the bar in 1992 following her graduation from Fordham University School of Law.
Belmonte could not be reached for comment. Phone calls to her home and office were not answered.
Editor's note: A previously published version of this article incorrectly stated the name of the defendant Hamilton Capital Group LLC in the state lawsuit.