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San Francisco Bay Area community news

Clients sue investor for allegedly mishandling money

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Beth Winegarner
News Pointer Editor
Nov. 2, 2004

Two women have accused Marin banker Kit Cole of mishandling their investments, but this may just be the tip of the iceberg: attorneys representing both women say more potential plaintiffs are waiting in the wings.

Leslie Klor, a San Rafael businesswoman, filed suit against Kit Cole Investment Services on Oct. 18 in Marin County Court, accusing Cole of fraud, deceit and negligence. Klor says she lost about $250,000 after investing with KCIS — a sum she had relied upon for her retirement.

“I was really injured by her,” Klor said. “Kit Cole holds herself out as a ‘sister’ — a friend to women.”

Klor invested a $300,000 inheritance with KCIS in 1999. She met with Cole and requested a diversified portfolio, but said Cole encouraged her to invest all of her money in stocks.

In 2000, when the stock market began its decline, Klor began to lose money. According to her lawsuit, she contacted KCIS, but the situation continued. Klor became so distressed that she stopped reading her monthly statements. By the time she gained the courage to look again, she found that she only had $57,000 left.

According to the suit, Klor asked Cole why she had not been contacted. Klor was told she would be informed when her account equity dropped to two years of living expenses, or $48,000.

“We consider this matter to be a private controversy between the corporation and plaintiffs,” said Larkspur attorney Tom Hyde, who represents Cole. “We have not seen the lawsuit and can’t comment on any of the specific allegations that might be there.”
Cole could not be reached for comment.

Martha McMahon, who filed suit against Cole last year, became so close with Cole during her investment with KCIS that Cole served as maid of honor at her second wedding, according to McMahon’s attorney, Bob Gonser.

According to Gonser, McMahon lost more than $2 million in three investment accounts with KCIS, one of which was her pension fund. She initiated arbitration in June 2003, but was unable to meet with Cole.

In August of this year, the American Arbitration Association awarded McMahon $1.2 million in damages, which have not yet been paid — despite the fact that KCIS received a $1 million check from Columbia Casualty Company to help cover it, Gonser said. “This hasn’t been put to bed yet,” he added.

Now, “we are filing a number of writs of attachment; we suspect there may be assets. We believe some of KCIS’ current and former attorneys’ trust accounts may have significant assents. We’re doing everything in our power to bring everything to a close,” he said.
“The McMahon case is a private mater,” Hyde said. “We continue to have discussions and hope to resolve this.”

He suggested that Cole might take legal action if the adverse publicity continues. “Some reputations are being damaged. We don’t want this dealt with in public, and continuing to publicize this is only going to jeopardize the process. This thing may potentially end up with some further actions,” Hyde said.

Klor said that since she filed suit, she has received a number of phone calls from other women who “have told me horror stories about how their financial security was shattered.”

Klor’s attorney, Emeryville-based James Jay Seltzer, said that by the middle of last week he had received five phone calls from others who have alleged claims against Cole. He was in the process of interviewing them at press time.

The news of Klor’s suit has brought more people to Gonser’s doors, too. “I have received calls from six new people who have allegedly suffered losses, from $180,000 to $1.2 million,” he said. “One is a man whose mother is 91 years old and was invested with Cole until June of 2002, and lost upwards of $250,000.”

Cole is the CEO of Epic Bancorp, the holding company for Tamalpais Bank. Gonser said that he is investigating whether Epic Bancorp, a publicly traded company, could be found financially liable for KCIS because the Epic Web site directly refers investment clients to Kit Cole.

Cole has filed suit in San Francisco Superior Court, claiming that McMahon’s suit has damaged her business.

A Mill Valley attorney, Richard Idell, arbitrated his case against Cole and was awarded $352,000. Cole has paid that judgment, as well as some additional court costs, but has appealed the judgment. Like the others Idell accused Cole of mismanaging his investments.

In September Cole announced her intention to resign as CEO of Epic, saying that she wanted to focus her efforts on the bank’s visibility and expansion. Mark Garwood, vice chairman of Tamalpais Bank, was promoted to CEO. The changes take effect Dec. 31.

Garwood would not comment on the situation last week.

This article originally appeared in the San Rafael/Terra Linda News Pointer.

Written by Beth Winegarner

November 2, 2004 at 8:42 PM

3 Responses

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  1. Hi Beth, I just took some time to read this article. Wow!! I came by the article accidentally but I was surprised to read that Klor’s attorney-emeryville based James jay Seltzer received 5 phone calls from others who alleged claims…..just to bring you up to date on James Jay Seltzer. He stole 6 million dollars from me (after my husband died – we knew him for over 30 yrs and never saw any signs) and fled from the United States, closing ALL accounts, which means that he planned this. He literally left me on the street to die with no food no water no roof no blood pressure medicine…and he did something with my clothing. When I regained a bit of composure, I went after him will all claws. Through a long road of at least 30 lawyers saying no, I finally put him in an involuntary chapter 7 and he changed it to chapter 11 but the bankruptcy court put him in chapter 7. Under oath he admitted to having over $32 Million dollars, that he admitted he owed to many creditors that came forward. On my own and through checking with several who did not come forward, it seems that he has taken over $50 million dollars. He has diluted this massive theft into three countries for which our government will not go after this white collar crime. It is clear who the accomplices are and they try to play on both sides of the fence. Of all his victims, I am the only one he left to die. He must have believed that if i was so totally crippled and died, then he would have gotten away with a perfect crime. I am pretty much alone and no one would have known….he underestimated me. He tried to disguise his life of crime by masking himself into some things that seemed ligit. I am on the street totally struggling to just eat but I will bring him down. He learned his crafty theft because of cases like this and also from another case that he was very familiar with —-How to steal 100 million dollars without a trace…he was to be the appealing attorney. It doesn’t matter what side he would have appealed the case for, but the fact is there is so much similarity to what he did and the case…..he knew the players and learned his lessons well. I learned that his law practice, as a security lawyer, taught him how to rip off our United States through the education system, and hanging his diploma. He totally abused his sacred position. James Jay Seltzer is worse than Bernie Maddoff because he had a law degree and misused it, but he diluted the theft into several countries understanding statue of limitation and what he could get away with. He raped me on every level imaginable. I intend to get my story published. It is not as much about a woman scorned rather the twisted demented mind of a narcissists, pathological liar, a moral, bombastic twerp who set out to be a thief while being a lawyer. He has traveled the world extensively. He understands the social and economic make up of other countries. He put a water company together with my funds but that got lost and Dow chemical bought it. Jim always said that water is the new gold….better than oil and he set out to put this company together but my law suit removed this from him. I was not able to get my money because of a long story and the way he crafted this theft. All in all this story would be far better than Dallas. Jim is on the run, he went to the Philippines when I dropped him off at the airport on Oct 17, 2010 and has not returned. He is with one of the accomplices who has a warrant out for her arrest, but together they put a company together called Watertronix and they are a franchise from a company in the L A area. All in All, I guess that I want you to know, is that this is a lawyer gone BAD !! I hope that Mr. Klor’s has nothing to do with this bombastic twerp. I wanted to bring you up to date about this bombastic twerp, because your article make James Jay Seltzer look good. He did have a law practice and on the surface, he did things that he should have been doing to look legit but all along, he had a goal, which I have now come to believe,,,,,,,,,,to steal at least 100 million without a trace or more but he admitted under oath to over 32 million and I traced much more….to about 50 million. If I was able to trace that amount, there certainly is more… one and not any lawyer believes that he spent the money and I have the information to where he most likely has put the money. He won, knowing that our government would not go after diluted monies in multiple countries like Panama, Philippine and China. i will continue to go after him. Thank You Pam Konecny,

    pam konecny

    March 19, 2014 at 4:08 AM

    • I would like to speak with you, James Jay Seltzer (Lawyer for Klor’s) stole 6 million from me and under oath admitted to over $32 million taken and independently found out it is over $50 Million…This is (was) a USA lawyer…My above comment would not go through….if interested, please contact me thank you Pam

      pam konecny

      March 19, 2014 at 4:33 AM

  2. anyone can easily check that James Jay Seltzer has been disbarred from practicing law in the state of California for many reasons, including misappropriation of client funds.

    pam konecny

    October 30, 2014 at 4:42 AM

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