- ‘Clawback’ lawsuits have been filed against more than 220 people and businesses alleged to have profited from investing with former Copley coach Mark Dente.
- Dente is accused of operating a Ponzi scheme that bilked more than 800 people out of over $200 million.
- The receiver appointed in the case is using the clawback cases to target ‘net winners’ or those who made money to help those who lost.
A Pennsylvania man invested with former Copley coach Mark Dente’s real estate business so he could make his home handicapped accessible for his ailing daughter.
The family added a bedroom and bathroom to the first floor and installed a lift to help the young girl get in and out of the house.
“We did everything we could for her,” said the man whose daughter had a seizure disorder. “I tried to give her the best life I could.”
His daughter died in February 2023, just shy of her fifth birthday. One year later, on the anniversary of her death, the father was sued in Summit County Common Pleas Court for the money he made investing with Dente.
“I will never forget that day,” said the 36-year-old man, who asked not to be named because of the pending lawsuit. “I was absolutely petrified. I’ve never been in trouble for anything.”
Mark Dente update:Will former Copley coach face charges for his alleged Ponzi scheme?
He is among more than 220 people who are the subject of “clawback” lawsuits filed by Mark Dottore, the Cleveland receiver who is tasked with recouping funds for those who lost money investing with Dente and his company, AEM Services LLC in Fairlawn. The clawback suits target investors whom Dottore claims profited.
Dente, who was formerly the boys and girls basketball coach at Copley High School, is accused of operating a Ponzi scheme from 2018 until 2022 that bilked over 800 investors out of more than $200 million.
A Ponzi scheme happens when money from investors is used to pay back earlier investors. The scheme collapses when it can no longer be sustained.
Dente lost his coaching positions in May 2022 as lawsuits filed by investors piled up against him. He is being investigated by the FBI and the Ohio Division of Securities for possible criminal charges.
Susan Lax, Dente’s Fairlawn attorney, declined to comment when recently contacted at her law office.
Dottore was appointed as the receiver in June 2022 by Patricia Cosgrove, a visiting judge in Summit County Common Pleas Court who is overseeing the Dente lawsuits. Dottore’s job is to inventory AEM Services’ assets and debts and return whatever money he finds to the investors who lost money.
Most of the Dente lawsuits have been put on hold while Dottore focuses on the clawback cases.
Bill Chris, an Akron attorney who represents nine people in clawback suits, said his clients didn’t know they were investing in a Ponzi scheme and were taken in the same as the investors who lost money.
“It’s a shock to all of these people,” he said. “They are all smart. All well-spoken. They just fell for it — Dente’s charisma and lies. If it appears to work and keeps on working, they think it must be OK.”
Dottore, though, draws a clear line between the “net winners” and “net losers.” He has heard about net winners using the money they made to help pay for in vitro fertilization and buy a home.
“I’m responsible for the people who got nothing,” he said.
Clawback suits seek $118 million from people and businesses in 15 states
Dottore is seeking to recoup nearly $118 million through the clawback lawsuits that have been filed since last January. The most recent was filed on Jan. 20 of this year, according to court records.
A Beacon Journal analysis of the clawback suits found that they:
- Target not just individuals but also businesses, including a dentist in Cuyahoga Falls, a contractor in Beachwood, a life insurance company in Bedford Heights and a carpet cleaner in Akron.
- Are filed against people and businesses in Ohio and 15 other states. That includes 22 filed against people who live in Copley, Dente’s hometown. One was a coach with Dente.
- Seek to recoup between $9,500 and $6,915,040. Twenty-five suits seek more than $1 million. Many are in the $100,000 to $500,000 range.
Dottore said some people invested with Dente through their business, while others invested both personally and through their business.
Dottore has reached settlements in 15 of the clawback suits for a total of about $1.5 million. This includes a $415,000 settlement with a Barberton man, a $100,000 settlement with a Wadsworth man and a $12,876 settlement with a Copley woman. He also reached a $79,050 settlement with an inn in Virginia Beach, according to court records.
Chris, who is one of several local attorneys handling multiple clawback lawsuits, said much of the financial information that Dottore is using is incorrect or incomplete because Dente kept no records and didn’t pay taxes.
“They are making these lenders come in and prove the receiver wrong,” he said. “The receiver is saying, ‘Here’s what we believe it is.’”
Chris also has been frustrated with how slowly the process has been moving. He said his clients are continuing to rack up attorney fees. He’d like to see a mediation program started to help speed up the process.
“It’s very frustrating,” Chris said. “This is bleeding these people dry.”
Two clawback defendants don’t think they are ‘net winners’
A Coventry man who is the subject of a clawback lawsuit invested with Dente at the advice of his accountant, who is also now being sued by Dottore.
The 61-year-old man, who asked not to be named because of the pending litigation, said he invested with Dente by using an equity line of credit that he had to pay back, including interest. He also paid taxes on the money he received from Dente. He has been told he might not be given credit for these expenses, which he doesn’t think is fair.
“If it wasn’t for AEM, I wouldn’t be paying these taxes or paying this equity line off,” he said.
He said two checks from AEM in his name were cashed by someone else and he didn’t receive six wire transfers that AEM supposedly sent him. He said his bank statements show that he never received these funds.
So far, he has accumulated more than $20,000 in attorney fees and is concerned that the only people who will benefit from these lawsuits are the attorneys and Dottore and his associates.
When he responded to an information request from the receiver, it included a line that said, “Admit that you are a net winner.”
“I am NOT a net winner,” he wrote.
He was planning to retire at 62 but is now unsure of whether that will be possible.
“I may have to work for another 10 years,” he said.
The Pennsylvania man said he had to take out loans to pay his taxes in the spring of 2022 when he realized Dente’s business was spiraling. He is still paying off those loans.
He said the receiver’s calculations of what he paid and received from Dente differ from his figures by more than $100,000.
“I get I will have to pay back something,” he said. “I hope it’s what I’ve been able to save and I hope that would be enough. I hope to not drag this on longer. I would love to put this behind me as I’m sure everybody else would.”
Depending on what he has to pay, he is concerned that he could lose his house — the one with improvements made for his daughter. He said he is watching every penny and feels like he has a “financial dark cloud” over his head.
“I wake up every day feeling like a net loser,” he said.
Dottore says he’ll try to settle as many clawback cases as possible
Dottore said most of the money in the case of Bernie Madoff, who operated a famous Ponzi scheme that bilked investors out of $65 billion, came from clawback lawsuits.
“It’s a receiver’s worst nightmare to have to do,” he said.
Dottore said the process of trying to reconstruct Dente’s business records has been “painstaking” and “costly.”
Mary Whitmer, one of Dottore’s attorneys, said the process involved issuing subpoenas to dozens of banks and reviewing records from 57 bank accounts. She said David Linscott, a financial expert working for Dottore, reconstructed the history transaction by transaction.
Whitmer said they learned the names of net winners by taking depositions with other participants in the scheme. This included Jason Ramus, a vice president with AEM, who agreed to give a deposition to Dottore as part of his bankruptcy proceedings.
Whitmer said some clawback cases have been dismissed when the defendants were able to prove they were actually net losers. Others were dismissed when settlements were reached.
Judge Cosgrove gave Dottore the authority to settle clawback suits when he reaches agreements that net at least 85% of the amount sought. If the settlement amount is less, it requires Cosgrove’s approval.
“That’s a way to offset a bunch of litigation costs,” Dottore said.
Dottore and Whitmer said some investors borrowed money to invest in AEM, while others paid taxes and interest on the money they received. These investors think they should get credit for those expenses.
“The problem here is — there isn’t any money that came from profits,” Whitmer said. “The losing investors got nothing. They want taxes and interest — all of that is coming from losing investors. We are very resistant to theories of additional recovery they think they should have.”
Dottore said investors are either winners or losers.
“In the end game, if you put 100 in and got 50 back, you’re a net loser,” he said. “If you put 100 in and got 130 back, you’re a net winner.”
Whitmer said as many as 300 clawback cases could be filed.
Whitmer said she expects some suits to go to trial. She said this likely will include high-ranking employees in AEM and others who helped entice investors. No trial dates have been set yet.
A clawback suit recently was filed against Brian Buckham, who was AEM’s president and chief operating officer. The suit seeks $979,808. Buckham is also part of several other pending AEM lawsuits, according to court records.
Dottore said some clawback suits have been delayed by defendants not providing requested information in a timely manner. He said they will try to settle as many as they can.
“Nobody’s in a hurry to give us money back,” he said. “They feel they’re entitled to it.”
Stephanie Warsmith can be reached atswarsmith@thebeaconjournal.com and 330-996-3705.