Benistar Troubles Leave Twisted Trail Simsbury tax attorney sued, indicted over bankrupt business Ray B. Burton III, The Connecticut Law Tribune May 3, 2004 Print Reprint Email Linkedin Facebook Twitter Google+
After more than 20 years of building and operating more than a dozen financial planning firms, tax attorney Daniel E. Carpenter, a Simsbury resident, tried his hand trading stock options in the go-go tech boom of the late 1990s.
But when the millennium turned, so did his luck.
Seven clients of his Newton, Mass.-based Benistar Property Exchange Trust Co. were left holding the bag -- to the tune of more than $9 million.
Nearly three years later, Carpenter, whose co mpanies list the city of Bridgeport and the Fairfield School District among its clients, is in heaps of trouble. Since the collapse of Benistar Property, Carpenter has lost a multimillion dollar civil suit in Massachusetts, was indicted by a federal grand jury in Massachusetts on 19 counts of mail and wire fraud, and faces disbarment in Connecticut.
To his attorneys, Carpenter is a victim of the stock market collapse who is being hounded by former clients disgruntled over the investment losses. "At most this is a breach of contract case," said Carpenter's longtime outside counsel, Richard S. Order, of Axinn, Veltrop & Harkrider's Hartford office. "Mr. Carpenter has been devastated by all of this. I'm surprised he hasn't had a heart attack with all the stress."
Those who trusted him with their retirement savings and other funds, however, claim Carpenter converted their money to his personal use, lost it all and is now trying to hide behind attorneys and a web of shadow corporations.
MISPLACED TRUST?
Carpenter started handling so-called "1031" transactions in 1998 after meeting Martin L. Paley of Newton. Paley, who was running his own company, joined with Carpenter and formed Benistar Property Exchange Trust Co.
Named after the section of the tax code that allows it, a 1031 is a way to avoid capital gains taxes when selling one investment property to buy another. To qualify, the original seller cannot have control of the money between the sale and the subsequent purchase. The money must go to a third party, an intermediary, where it remains until the replacement property is bought. The purchase must happen within 180 days.
Benistar Property's mission was to be that intermediary. Client
Benistar Troubles Leave Twisted Trail
ReplyDeleteSimsbury tax attorney sued, indicted over bankrupt business
Ray B. Burton III, The Connecticut Law Tribune
May 3, 2004
Print Reprint
Email Linkedin Facebook Twitter Google+
After more than 20 years of building and operating more than a dozen financial planning firms, tax attorney Daniel E. Carpenter, a Simsbury resident, tried his hand trading stock options in the go-go tech boom of the late 1990s.
But when the millennium turned, so did his luck.
Seven clients of his Newton, Mass.-based Benistar Property Exchange Trust Co. were left holding the bag -- to the tune of more than $9 million.
Nearly three years later, Carpenter, whose co
mpanies list the city of Bridgeport and the Fairfield School District among its clients, is in heaps of trouble. Since the collapse of Benistar Property, Carpenter has lost a multimillion dollar civil suit in Massachusetts, was indicted by a federal grand jury in Massachusetts on 19 counts of mail and wire fraud, and faces disbarment in Connecticut.
To his attorneys, Carpenter is a victim of the stock market collapse who is being hounded by former clients disgruntled over the investment losses. "At most this is a breach of contract case," said Carpenter's longtime outside counsel, Richard S. Order, of Axinn, Veltrop & Harkrider's Hartford office. "Mr. Carpenter has been devastated by all of this. I'm surprised he hasn't had a heart attack with all the stress."
Those who trusted him with their retirement savings and other funds, however, claim Carpenter converted their money to his personal use, lost it all and is now trying to hide behind attorneys and a web of shadow corporations.
MISPLACED TRUST?
Carpenter started handling so-called "1031" transactions in 1998 after meeting Martin L. Paley of Newton. Paley, who was running his own company, joined with Carpenter and formed Benistar Property Exchange Trust Co.
Named after the section of the tax code that allows it, a 1031 is a way to avoid capital gains taxes when selling one investment property to buy another. To qualify, the original seller cannot have control of the money between the sale and the subsequent purchase. The money must go to a third party, an intermediary, where it remains until the replacement property is bought. The purchase must happen within 180 days.
Benistar Property's mission was to be that intermediary. Client