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Cyrus R. Vance, Jr.

District Attorney, New York County

For Immediate Release
December 11, 2013

DA VANCE: FORMER ATTORNEY AND LAW FIRM PARTNER CONVICTED OF PERJURY FOR FALSE TESTIMONY DURING CIVIL DEPOSITION

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the arrest and guilty plea of LEONARD GRUNSTEIN, 61, a former attorney with Troutman Sanders, LLP, for committing perjury while testifying at a January 2011 civil deposition arising out of a complex commercial lawsuit. GRUNSTEIN pleaded guilty in New York State Supreme Court to Perjury in the Third Degree, and is expected to be sentenced on February 4, 2014.

“Witness oaths are sacred,” said District Attorney Vance. “The administration of justice is the victim when witnesses believe that they can lie with impunity, and especially when that witness is an attorney. Falsely testifying under oath, in a civil or criminal proceeding, is a crime, and we will continue to pursue such conduct.”

According to the defendant’s guilty plea and documents filed in court, in December 2004, GRUNSTEIN devised a leveraged buyout plan to acquire Mariner Health Services Inc., a publicly traded company engaged in the nursing home business. GRUNSTEIN approached one of his clients, Rubin Schron, a New York real estate investor, to participate in and serve as the principal financier to complete the $1.3 billion transaction. The newly formed nursing home operating company was called SVCare.

In addition to arranging for financing for the transaction, Rubin Schron and his associates provided a $100 million loan from Cammeby’s Funding III to SVCare. Loan documents signed by the parties granted Schron an option to purchase up to 99.999 percent of SVCare. In June 2010, Schron gave notice to GRUNSTEIN that he wished to exercise the option to purchase SVCare. GRUNSTEIN rejected the notice, claiming the option was unenforceable because Schron had failed to fund the $100 million loan he had pledged. Schron then filed suit in New York State Supreme Court to enforce the contract.  

During depositions in the civil suit, GRUNSTEIN testified on January 25, 2011, that he had previously told several attorneys working on the financial transaction that the $100 million loan from Cammeby’s to SVCare had not been funded. GRUNSTEIN admitted that he never said to a particular attorney that the loan was not funded.
    
Senior Investigative Counsel Richard Buckheit is handling the prosecution of this case, under the supervision of Assistant District Attorney Daniel Cort, Chief of the Public Integrity Unit, Assistant District Attorney Daniel Brownell, Chief of the Rackets Bureau, and Executive Assistant District Attorney David Szuchman, Chief of the Investigation Division. Trial Preparation Assistant Jessica Laredo assisted in the investigation, as well as Senior Investigator Gerald Bergold and former Senior Investigator Eva Barriga, under the supervision of Chief Investigator Walter Alexander.

Defendant Information:

LEONARD GRUNSTEIN, D.O.B. 7/18/1952
Teaneck, N.J.

Convicted:
•    Perjury in the Third Degree, is a class A misdemeanor, 1 count
 

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