Newest development in the litigation wars between the ANA and its fired executive director Christopher Cipoletti: the American Numismatic Association now says he committed civil fraud and stole thousands of dollars from the organization in papers filed with El Paso County Court on May 19.
Removal of Cipoletti as executive director of the American Numismatic Association’s board of governors on Aug. 13, 2007, set off a cavalcade of legal responses that eventually saw cross-claims filed by both sides against the other in a forum run by the American Arbitration Association in Colorado Springs, Colo., the home of both parties.
The present two-year legal wrangle brought to a head a number of other legal battles that the ANA had found itself in, which the board of governors – the functional directors of organizational policy – instituted with the hearty recommendation of Cipoletti when he was its executive director.
After Cipoletti’s discharge, which the ANA board said was “for cause,” a curtain of silence descended as the hearing of the controversy began in the murky world of commercial arbitration, which is notable for its lack of public review or oversight, the perfect forum to discretely launder dirty linen.
Evidently, a lot of discovery – the exchange of evidentiary documents – was involved over the last several months, all preparatory to a hearing or trial before a panel of arbitrators who are privately paid by the litigants to rule on the case. The administrator, instead of a court, is the American Arbitration Association.
Documentary exchanges are how parties acquire evidence that they utilize as proofs in their litigation. For example, the ANA demanded access to Cipoletti’s tax returns; it is unusual for such a request to be granted, but evidently it was. ANA used this information to lead the attack against aspects of Cipoletti’s work that it found was contrary to what the parties negotiated for.
For example, the papers filed in May by ANA allege “Claimant’s fraudulent conduct predates the parties’ signing of the Employment Agreement. Claimant fraudulently induced the ANA to hire him and pay him $195,000 based on his representation that in the event he accepted the full time position as General Counsel he would lose money. Cipoletti was the top outside counsel to ANA before becoming an employee.
Cipoletti “further alleged that it was necessary for him to maintain ‘several clients’ to offset his alleged reduction in pay,” ANA says in its papers. But then a revelation from the income tax returns filed by Cipoletti: “Actually, the income tax records show that Cipoletti made $50,000 less than his starring salary at ANA during the year preceding the start of his employment at ANA;” the particular exhibits are then cited–all coming from discovery documents.
Another allegation by the ANA: In June 2004, Cipoletti “traveled to Indianapolis to testify on June 15, 2004, at a hearing on behalf of the ANA. He was “asked to testify about a person’s membership ... and to testify about issues with regard to being a member in the ANA.””
According to Mr. Cipoletti, he notified the ANA’s Board of Governors “that he was going to act as an expert witness and that “we are being paid for it.”” The story then continues in the ANA narrative.
Cipoletti “submitted a Purchase Order to the ANA,” which the filing said “detailed travel expenses” for the Indianapolis trip. “Two days later, on June 23, 2004, Christopher Cipoletti, P.C. issued a bill to the law firm of Barnes & Thornburg for services and travel expenses relating to” the same trip, the court filing says.
Except for $18 not billed twice, ANA’s brief says, “all of the expenses charged to” the Barnes law firm “had clearly previously been paid by the ANA.” The result: a claim that Cipoletti had “converted over $6,500 belonging to the ANA, and was able to do so using his position as Executive Director-General Counsel” to conceal “the theft.”
As a result of a subpoena issued on Feb. 27, 2009 – just months ago– the ANA was able to confirm its claim that Cipoletti was paid, and had not turned over the check, or himself made payment to the ANA of the funds he in essence was given twice.
ANA claims other instances of improper accountings, and goes on to say that its discovery of how Cipoletti failed to account for double reimbursements was his “production of false or fraudulent tax returns” which prevented ANA’s own forensic experts from recognizing the problem. The returns were evidently produced under order from the arbitrators.
The ANA claims that thousands of dollars it was entitled to were never turned over to it and that Cipoletti was properly discharged for cause. In a related development, the ANA’s outside litigation counsel handling this matter has asked to amend the counterclaims asserted against Cipoletti to include a claim for civil theft.
All of the claims involved in the arbitration are also part of a larger court proceeding in El Paso County, Colo., court in Colorado Springs. Cipoletti has the right to respond to the documents that were electronically filed with the court on May 19. He had not responded by press time.