777 Partners lawsuit: former IT employee stole laptops for lender

777 Partners, the high-profile investment firm at the center of a swirling controversy over missing funds, hit back with its own lawsuit last week.

The Miami-based firm is suing a former lender, claiming that Leadenhall Capital, a prominent London-based asset management firm, hired a former 777 Partners tech employee to gain access to proprietary information.

Leadenhall is suing 777, claiming that the firm fraudulently borrowed hundreds of millions of dollars against assets that either don’t exist, or were already pledged to other lenders.

The 777 Partners saga has many tentacles, including into insurance.

According to reporting by Semafor, the New York-based A-Cap insurance group sold blocks of life policies to 777’s reinsurance arm, while separately loaning hundreds of millions to 777 Partners itself and various portfolio companies.

In its May lawsuit, Leadenhall claimed that it provided 777 Partners with more than $600 million in financing, only to later learn that roughly $350 million in assets serving as collateral for the loans either were not in 777’s control or had already been pledged to other lenders.

A-Cap is also named as a defendant, with the firm telling the New York Times that the claims are “baseless.”

'Breaking into' offices alleged

In its lawsuit, 777 claims “repeated brazen and unauthorized incursions into plaintiffs’ proprietary computer networks,” as well as the “related theft of computer equipment.”

In performing its audit of business records related to the lawsuit, Leadenhall “conveniently chose to hire SAIPH to perform these audits, which Leadenhall was aware was founded and is managed by SuttonPark’s former senior executive, Defendant Paul Kosinski,” the 777 lawsuit states.

SAIPH Consulting also employs 777 Partners’ former head of information technology Noah Davis, the lawsuit adds. Kosinski, Davis and SAIPH are all named as defendants in the lawsuit.

“Davis illegally and brazenly accessed Plaintiffs’ computer networks without permission,” the 777 lawsuit states. “During these incursions, Davis accessed a variety of computer databases and other repositories of information belonging to 777 Partners that he believed might prove useful to his client, Leadenhall.”

777 Partners claims that Davis was later captured on video surveillance cameras “breaking into” offices without permission and “stealing several laptop computers belonging to 777.”

The lawsuit claims that “the full extent of [Davis’s] activities within 777 Partners’ systems, including the actual number of illegal incursions, what information he may have reviewed, copied, altered, or otherwise interfered with, and for what purposes, is not, and may never be, fully known.”

A spokesman for Leadenhall shared the following statement on the 777 lawsuit:

“This lawsuit is the latest brazen attempt by 777 Partners, A-CAP and the other named defendants to frustrate Leadenhall's efforts to enforce its contractual rights and expose the alleged years-long pattern of fraud outlined in our complaint. As extensively detailed, for nearly a year 777 – acting at the behest of A-CAP – has repeatedly sought to prevent Leadenhall from exercising its right to determine the extent and condition of the remaining collateral securing the investment with which they have allegedly absconded.

"We remain confident in the strength of our legal case, which the court has already acknowledged by issuing an asset-freezing order to prevent further harm against Leadenhall and its investors, and we will continue to take all appropriate legal actions to maximize recovery for our investors.”

Soccer teams and airlines

777 Partners was founded by Josh Wander and Steve Pasko and pursued some colorful ventures, not all of which have gone well. The firm owned stakes in several soccer teams and other businesses, including Australian budget airline Bonza Aviation.

In April, Bonza entered into voluntary administration after abruptly canceling flights across Australia, stranding hundreds of domestic passengers. The airline went into liquidation over the summer.

Questions first surfaced about 777's finances last year, after it moved to acquire the UK Premier League soccer team Everton FC. That deal later fell apart, after the league raised questions about 777’s funding, calling the firm "a crumbling house of cards" in a New York Times' report.

Other lenders have active lawsuits against 777 Partners, including Obra Capital, which claims it was still owed $22.4 million.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.