Missing $2M left NYC lawyer’s account the day of deposit

A Brooklyn attorney tasked with holding onto $2 million of investor funds made a mystery transfer the same day he received the cash — and it remains missing, according to new court filings.

And lawyers for the foreign investors are now alleging that some of the funds may have landed in longtime Democratic power-broker Frank Seddio’s account.

The businessmen have been trying to recoup their multi-million dollar investment for about a year, as the case has gotten dragged out in court, hindered by Seddio’s alleged legal machinations, they claim.

But it was revealed in court this week that the funds were transferred to an anonymous third party, a shell company called 536 Holdings LLC, the same day they landed in lawyer Mark David Graubard’s escrow account.

Graubard — who was supposed to keep the money in escrow for the sole purpose of proving the two potential investors had the funds for a proposed deal — filed bank records showing $2 million entering and leaving his account.

He claimed in court papers that all transactions “were done pursuant to written instructions by persons who had authority to do so.”

But only the investors had the right to make any decisions about the money, according to the signed escrow agreements, including a clause that Graubard couldn’t touch “any part of the Escrow Deposit for any reason or in any way” without their written permission.

Previously, Graubard maintained he had the money, and that he was ready to deposit it with the court when a prior judge on the case ordered him to last summer. He never did.

The new documents could bolster a long held fear of the investors’ that their money is long gone.

The records, said their attorney, Babak Ghafarzade, showed “certain specific and highly suspicious transactions,” including one to Seddio’s law firm, which was technically suing Graubard at the time.

Ghafarzade added that the account was closed out entirely in June, which Graubard had never disclosed. 

A spokesperson for Seddio denied that he ever received a payment from the escrow account.

Graubard appeared in Brooklyn Supreme Court on Wednesday, before the fifth judge in the winding case, to finally produce the bank records for his escrow account months after court orders to do so.

A trio of sheriff’s deputy sat in the courtroom ready to fulfill an arrest warrant for Graubard issued by Judge Francois Rivera if the lawyer failed to produce the records.

Despite the filing, the judge found the bank statement submission lacking due to missing pages and excessive redactions blocking some account balances. 

“It’s just not compliant, Mr. Graubard,” Rivera plainly said. “The failure of compliance is just absolutely baffling to me.”

“I cannot even begin to imagine why an attorney, an officer of the court, would risk everything: his license, his liberty… to willfully disobey a court order.”

Rivera scheduled a frivolity hearing for March for Graubard over his “failure to comply with repeated court orders,” where each finding could carry a fine of $10,000 each.

Graubard and his lawyer Israel Goldberg refused to comment after court.

A spokesperson for Graubard later sent The Post multiple amended statements, which first claimed he has “fully complied with all laws and judicial rulings regarding this meritless case,” and called the idea that escrow funds had been misappropriated “patently false.”

The long winding case, initiated by Seddio allegedly to block the investors from getting their money returned, has meandered through courts for over a year, and is now on its fifth judge due to repeated recusals.

A concurrent federal lawsuit filed by the investors claiming the former Brooklyn Democratic Party Chair is helping run a “con job” by abusing the court system. He has denied wrongdoing.