SAN DIEGO--(BUSINESS WIRE)--Stuart M. Eppsteiner, Esq. of Eppsteiner & Fiorica Attorneys today issued the following statement regarding a lawsuit recently filed in California Superior Court against Harry Rady, who is the CEO and Portfolio Manager of Rady Asset Management, LLC, Rady Contrarian Long/Short Fund, RADIX, and the Rady Opportunistic Value Fund, ROVYX, and the eldest son of Ernest Rady, who was at one time the wealthiest person in San Diego:
STATEMENT FROM STUART M. EPPSTEINER, ESQ.,
ATTORNEY FOR
TROY & THEODORA POLAMALU
REGARDING POLAMALU V. RADY
“On behalf of my clients, Troy and Theodora Polamalu, I have filed a lawsuit against Harry Rady in the California Superior Court regarding a house and property the Polamalus purchased from Rady in 2009. In their lawsuit, the Polamalus claim that Rady failed to disclose:
1. That he filled the canyon behind the house with soil, increasing the area of the backyard by approximately 6,000 square feet, ostensibly to increase the sale price; and
2. That he did so without the necessary permits, inspections or City of San Diego approvals.
“This unpermitted and undisclosed grading led to a dangerous landslide on the property. On December 21, 2010, in the midst of a winter rainstorm, most of the soil Rady added to the property fell into the canyon behind the house.1
“The Polamalus believed that since Rady was responsible for investing more than $250 million of other people’s money, he could be trusted. Additionally, Rady assured the Polamalus that the house was well built and was safe. However, the Polamalus now have a house with a gaping chasm in its backyard bordered by a fence to keep anyone from falling into it.
“Essentially, Rady bought an old house in La Jolla, tore it down to the foundation, built a new house, and imported 4,000 cubic yards of soil to create a large backyard extending out into a canyon. Unfortunately for the Polamalus, Rady never disclosed the grading, let alone the fact that it was performed without permits, inspections or approvals from the City of San Diego. The concealed and unpermitted work has literally slid into the canyon behind the home.
“The landslide was massive, taking with it sewer lines, drain lines and retaining walls. The only silver lining is that the Polamalus’ children and friends were not using the backyard when it collapsed.
“The Polamalus have sued Rady for rescission of their purchase contract based on Rady’s misrepresentations and fraud. The Polamalus did not receive what Rady represented he was selling them. In the lawsuit, they seek to return the property to Rady and to get back the money they invested in the property.
“This is not the first time, unfortunately, that Rady has demonstrated his disregard for the law. In 2007, Rady wanted a cache of high powered automatic weapons. To get them, Rady enlisted the same contractor who built the Polamalus’ house go to Arizona to purchase and deliver to him AK-47s, shot guns and other high powered automatic weapons. Rady was convicted for illegally importing automatic weapons.2
“Furthermore, in the course of the federal investigation of Rady regarding his gun smuggling, Federal Agents found two locked refrigerators in which Rady stored 974 boxes of human growth hormone; a controlled substance often associated with the use of steroids.3 It was reported that Rady did not have a prescription for the 974 boxes of human growth hormone.
“Following the landslide, the Polamalus notified Rady of their claim and demanded Rady return the money they invested into the property in exchange for their return of the property to Rady. In an effort to resolve this matter privately and without litigation, the Polamalus even arranged for mediation using a third party to try to settle their claims against Rady. Rady has refused to return the Polamalus’ money and has made no settlement offer.
“Due to Rady’s illegal actions, the Polamalus now possess severely damaged property and a home with construction defects. Rady has the Polamalus’ money. Given Rady’s actions, the Polamalus pursued the only avenue open to them: a lawsuit.
“As the Polamalus’ attorney, I am surprised and disappointed that someone as well known as Rady, the CEO of publicly traded mutual funds, hid important information from the Polamalus. Rady illegally graded a giant portion of the property, hid it from the City and concealed it from the Polamalus. He has been caught red-handed. He needs to right this wrong.
“Harry Rady’s actions are not only illegal, but an unfortunate blemish on his family name, a family known for good will and philanthropy throughout the San Diego community. Harry Rady’s conduct in his business dealings with the Polamalus has been nothing short of shameful.
“The goal of the Polamalus’ litigation is simple and straightforward – to make Rady return the money he took from the Polamalus under false pretenses.”
For more information regarding Polamalu v. Rady, contact Stuart M. Eppsteiner at (858) 350-1500 or stuarteppsteiner@eppsteiner.com. Materials related to the case may be viewed at http://www.eppsteiner.com/polamalu-v-rady.html.
1 See photographs of the property before and after grading and after the landslide at http://www.eppsteiner.com/polamalu-v-rady.html
2 See the Voice of San Diego article originally published August 7, 2007 and updated December 3, 2009 at http://www.voiceofsandiego.org/government/article_bacaed55-7199-51e4-a039-b0c868f91245.html
3 See the San Diego Union Tribune’s October 20, 2007 article on Rady’s arrest and possession of an excessive quantity of human growth hormone at http://www.signonsandiego.com/uniontrib/20071020/news_1m20rady.html