Edward T. Gignoux United States Courtouse Credit: Troy R. Bennett

The legal bramble around an embattled former Maine businessman has grown a new shoot, entangling a prominent Portland law firm.

On Wednesday, women from Florida and Massachusetts filed a federal class-action lawsuit against a lawyer who has represented Michael Liberty and the law firm he helped found.

They claim that George Marcus and the Marcus Clegg law firm knowingly helped Liberty with a scheme that the U.S. Securities and Exchange Commission say defrauded investors out of $50 million.

Marcus and his firm were “co-conspirators” in a long-term scam that led people to believe they were investing in a financial technology company when their money was instead being used to pay for the lavish lifestyles of Liberty and his associates, the suit filed in a federal court in Portland claims. It piggybacks on the SEC’s March fraud suit against Liberty, Marcus, and several other people and corporations associated with the company formerly known as Mozido.

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Tina Endicott and Denise Medina claim they were snookered by “faulty and misleading legal documents” that Marcus Clegg lawyers prepared for Liberty’s company, now called MDO. Their 10-count lawsuit requests a jury trial and unspecified damages for a class of other investors.

Since the SEC filed its suit, Liberty and Marcus have denied they committed fraud in public statements and court documents. A partner with Marcus Clegg said Thursday that the women bringing the new suit were never the firm’s clients and that it will seek to have their case dismissed immediately.

“The complaint is replete with numerous misrepresentations and inaccuracies, and is completely without legal merit,” said Lee Bals, also noting that it “does not allege that the firm in any way misused client funds.”

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The lawsuit is the latest in a series of court cases that have cropped up around Liberty and his businesses. Once a prominent Portland developer, Liberty, 58, now lives in Florida. His legal troubles, however, have continued to play out in Maine, including a criminal case over campaign finance violations that saw him sentenced to jail time last year.

The new lawsuit against Marcus and his firm claim that the lawyers gave investors in MDO financial documents that “concealed critical facts” about the company’s value and Liberty’s past problems with the SEC. It also says they improperly handled investor funds that were deposited in a law firm-controlled account, affecting a class of more than 100 people spread across the country.

“In some instances, [Marcus and his firm] knowingly assisted the MDO scheme, while in other instances they negligently participated in the victimization of investors,” the lawsuit states.

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In addition to a local lawyer, the case is being handled by law firms based in Pennsylvania and Iowa. Bals said that opposing counsel is “fully aware that their real grievance is with individuals and entities unaffiliated with Marcus Clegg.”

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