Prepared: March 26, 2026 For: Plaintiff's Counsel Classification: Attorney Work Product / Privileged
Analysis of the NGM Trust Ledger (covering July 2023 through May 2025, with historical entries dating back to 2020) reveals a systematic pattern of transferring client trust funds into the firm's operating accounts. The key findings:
All 2,160 transfers list Richard Litman ("RL") as the responsible lawyer, and all were processed through two trust accounts: t3 (Bank of America) with $16,058,600.12 in transfers, and t23 (EagleBank) with $1,473,024.25.
NGM is organized in Virginia, and its trust accounts are subject to the Virginia Rules of Professional Conduct. Rule 1.15 (Safekeeping Property) imposes the following mandatory obligations:
"A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property." Client funds must be held in a trust account clearly identified as such, separate from the firm's operating funds.
The lawyer must maintain complete records of trust account funds for five years, including "the identity of the person for whom the funds are held."
"Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive."
"When in the course of representation a lawyer is in possession of property in which two or more persons (one of whom may be the lawyer) claim interests, the property shall be kept separate by the lawyer until the dispute is resolved."
| Year | Transfers | Total Amount | Notes |
|---|---|---|---|
| 2020 | 353 | $1,504,675.52 | Post-SOL cutoff (6/15/2020) |
| 2021 | 376 | $1,762,395.68 | Includes two Op-to-Trust "RCL" corrections |
| 2022 | 410 | $3,073,983.58 | Highest year by transfer count; includes large KSU batches |
| 2023 | 855 | $6,128,152.34 | Peak dollar volume; post-arbitration (6/14/2023) |
| 2024 | 152 | $4,902,781.50 | Wire_8751 incident; $500K reverse transfer |
| 2025 | 14 | $159,635.75 | Partial year (through May) |
| TOTAL | 2,160 | $17,531,624.37 |
All but 10 transfers went to "Nath & Associates PLLC" (the firm's operating entity):
| Entity | Transfers | Total |
|---|---|---|
| Nath & Associates PLLC | 2,150 | $17,510,969.87 |
| Other/Unspecified | 10 | $20,654.50 |
July 16, 2021 -- First "Op to Trust RCL" Correction - $90,000 transferred FROM operating TO trust, Case 36056 - Description: "Op to Trust RCL" / "IN: Transfer: 00418 To 36056" - This reverse flow indicates $90,000 in client funds had been held in the operating account. The reference to attorney number "00418" (Litman's attorney code) and notation "RCL" (Richard C. Litman) confirm these were Litman-originated client funds.
September 3, 2021 -- Second "Op to Trust RCL" Correction - $20,000 transferred FROM operating TO trust, Case 36056 - Description: "Op to Trust RCL" / "IN: NATH, GOLDBERG & MEYER" - Same pattern: client money had been held in operating and was being moved back to trust. Combined with the July correction, $110,000 in client funds had been improperly held in the operating account.
February 9, 2024 -- Litman Raises Trust Account Concerns - Email from Litman to Goldberg (ND263559): "Have you taken into account payments which went into the Freedom Bank trust account(s)? (I would appreciate you closing them or removing my name.)" - Litman also asks: "How much of the payments still remain in trust? What is the reason? Waiting for work completion (or was the work completed and a transfer not made)?" - This demonstrates Litman was actively questioning the trust account management and was unaware of how funds were being handled.
March 18, 2024 -- The Wire_8751 to Operating_2417 Transfer - A $595,214 wire payment from KFU (Client 135900 / Docket 36372) was received into the Bank of America Wire_8751 account - The funds were transferred directly to the Bank of America Operating_2417 account -- bypassing the trust accounts entirely - The amount was recorded in the Soluno accounting system as $594,214 -- exactly $1,000 less than the actual wire amount - A correction entry on 3/19/2024 notes: "Correction: There was a wire transfer form [sic] the Bank of America Wire_8751 account to the Bank of America Operating_2417 account on March 18, 2024 for $595,214. The amount recorded in Soluno is $1,000 lower because it was recorded as $594,214" - The correction added the missing $1,000 but did not address the fundamental issue: client trust funds went directly to operating
March-April 2024 -- Intensive KFU Transfer Activity During this period, 49 transactions moved KFU trust funds: - March 1-28: 13 "Transfer to Operating" entries totaling over $1.1 million - March 19: $594,214 wire receipt (the corrected Wire_8751 amount) into trust - March 19: Immediate $131,064 transfer to operating from the same trust account - March 20-28: Multiple individual patent application disbursements - April 1-4: Additional transfers to operating, including a $141,730 bulk transfer - April 4: $659,772 wire receipt from KFU - April 4: Same-day transfer to operating of $141,730 + $6,528
April 9-10, 2024 -- The $500,000 Reverse Transfer (Operating to Trust) - April 9: $500,000 transferred from operating to EagleBank trust (t23): "Transfer from Op to Trust 36372/135900 KFU" - April 10: $500,000 transferred OUT of BOA trust (t3): "Transfer to BOA Operating for transfer to EagleBank Operating to Trust" - April 10: $87,358.87 also transferred OUT of BOA trust (t3) with the same description - April 10: $87,358.87 received INTO EagleBank trust (t23): "Transfer to EagleBank Operating to Trust 36372 / 1359003372" - Total moved: $587,358.87 in KFU client funds routed through the operating account to transfer between banks - A legitimate inter-bank transfer of trust funds should have been processed trust-to-trust. Routing through operating created temporary commingling of $587,358.87 in client funds with firm funds.
August 15-17, 2023 -- Schaefer Engagement - Litman contacts Schaefer (Goldberg's referral) to discuss "controls to ensure accurate accounting by matter" - Litman requests trust account ledger details, payment matching to invoices - Schaefer meets with Litman and then emails Goldberg: "I met with Richard today and discussed some of his concerns about the reporting and the processes in regard to Soluno. There [are] two things that I was hoping to discuss with you and MaryJane and Richard" - The specific "two things" are not disclosed in the available emails
September-November 2024 -- BOA to EagleBank Migration - 561 inter-bank transfers moving trust funds from Bank of America to EagleBank - Total outgoing from BOA trust: $1,478,867.09 - Total incoming to EagleBank trust: $1,391,995.22 - Discrepancy of $86,871.87 between outgoing and incoming amounts - Some of these transfers were routed through operating accounts (as shown in the April 2024 pattern)
June 6, 2025 -- Litman Requests Detailed Trust Ledger - Email to Goldberg (ND263922): "Could I get the detailed trust ledger from 2020 to 2025 from the trust account(s) including billings and payments, and transfers to operating for 418 clients, including clients which followed the xxxxx.xx format and clients left off transfers such as KISR, KU, Sabah, UAEU and others. There may [be] significant money owed here."
June 7, 2025 -- Litman Identifies Specific KFU Irregularities - Email to Goldberg CC Schaefer (ND263924): "I've flagged King Faisal University dockets that require attention. These relate to payments received, invoice status, trust transfers, and uncredited 20% allocations." - Lists specific dockets: 33110.43U (trust payment transferred, no RCL credit); 33110.63U (not transferred to operating, no credit); 33110.92U (trust payment made without invoice or transfer record) - Notes: "There is significant money involved here" - Notes: "There were invoices included in what you sent that were dated in advance... There should be a record of who removed me as being entitled to an allocation"
June 19, 2025 -- Litman Reports to Schaefer on KFU Reconciliation - Email to Schaefer CC Goldberg (ND264006): "Here is a draft memo summarizing the June 2023 KFU payments. There are many matters for which I was not paid as described in the draft."
Deborah Schaefer Statement (Date Uncertain) - Schaefer told Litman that trust accounts were being closed because the firm was "not supposed to have trust money for your own money." - This statement is an admission of awareness that the trust accounts contained firm funds (or that firm and client funds had been commingled) and that this needed to be corrected.
| Category | Amount | Description |
|---|---|---|
| Wire_8751 to Operating bypass | $595,214.00 | Client wire transferred directly to operating, bypassing trust |
| Recording discrepancy | $1,000.00 | $595,214 recorded as $594,214 |
| $500K operating reverse transfer | $500,000.00 | Client trust funds in operating, returned to trust |
| Additional reverse (same transaction) | $87,358.87 | Routed through operating for inter-bank transfer |
| 2021 Op-to-Trust corrections (Case 36056) | $110,000.00 | Client funds held in operating, corrected back to trust |
| BOA-EagleBank transfer discrepancy | $86,871.87 | Difference between outgoing and incoming in bank migration |
| Subtotal: Clearly Problematic | $1,380,444.74 |
The entire $17,531,624.37 in trust-to-operating transfers requires scrutiny to determine whether each transfer was: - Supported by a corresponding invoice for services rendered - Made only after the services were completed - Made in the correct amount matching the invoice - Properly allocated, including Litman's 20% origination credit
Litman's June 2025 emails identify specific instances where: - Trust payments were transferred but no 20% RCL credit was applied (33110.43U, 33120.22S, 33120.26S) - Trust payments were received but not transferred to operating and no credit issued (33110.63U) - Trust payments were made without any invoice or transfer record (33110.92U)
KFU docket 36372 is the largest single client trust account, with: - $9,794,476.44 in trust-to-operating transfers (762 transactions) - Client funds flowing through a single umbrella docket before distribution to individual patent matters - The Wire_8751 bypass, the $500K reverse transfer, and the recording discrepancy all occurred within this single docket - This docket alone represents 55.8% of all trust-to-operating transfer volume
Deborah J. Schaefer, CPA (djscpa@deborahjschaefer.com, Branford, Connecticut) served as NGM's external accountant. Key facts:
"Not supposed to have trust money for your own money" -- Schaefer told Litman that trust accounts were being closed for this reason. This is a direct admission that the firm recognized its trust accounts contained funds that were not client trust funds -- the definition of commingling.
Goldberg referred Schaefer to Litman -- In the August 15, 2023 email chain, Schaefer confirmed: "Josh did mention you wanted to chat." This establishes that Goldberg was aware of Litman's accounting concerns and routed them through the CPA rather than addressing them directly.
Schaefer identified "two things" to discuss with Goldberg -- After meeting with Litman on August 16, 2023, Schaefer emailed Goldberg: "There [are] two things that I was hoping to discuss with you and MaryJane and Richard." The substance of these items is not in the available record but they arose from Litman's concerns about trust account management.
Schaefer was CC'd on accounting demand emails -- Through June 2025, Litman copied Schaefer on detailed accounting requests to Goldberg, including requests for trust transfer details, client ledgers, and invoice reconciliation.
Schaefer produced the trust account summary -- The Summary by Bank Account report (Exhibit A in the financial analysis), which documents $32,708,669 in total trust account receipts, was produced by Schaefer on June 26, 2025.
Litman repeatedly raised trust account concerns in writing:
Goldberg's responses to trust account inquiries followed a pattern: - Acknowledged concerns but did not provide requested records promptly - Referred Litman to Schaefer for details - Provided partial data in batches (alphabetical client lists sent letter-by-letter) - The NGM Litman Workup that Goldberg prepared showed $0 in receipts for KFU and KSU despite $11.6 million in verified trust payments from these two clients
The system contains correction entries that document awareness of errors: - March 19, 2024: $1,000 correction on the Wire_8751 transfer, explicitly documenting the recording discrepancy - July-September 2021: Two "Op to Trust RCL" corrections totaling $110,000, returning client funds from operating to trust - May 30, 2025: "Void Correction from 1/31/23" on Case 35663, involving $558.33 -- a correction applied more than two years after the original error
NGM maintained at least three relevant accounts:
| Account | Type | Designation | Ledger Code |
|---|---|---|---|
| EagleBank Trust (ending 0495) | Trust | RL - Richard Litman | t23 |
| Bank of America Escrow (ending 8777) | Trust | RL - Richard Litman | t3 |
| Bank of America Wire (ending 8751) | Wire Receipt | Not a designated trust account | N/A |
| Bank of America Operating (ending 2417) | Operating | Nath & Associates PLLC | N/A |
| Freedom Bank | Trust (historical) | Unknown | Unknown |
The Wire_8751 account is the critical gap. It received large international wire transfers from KFU, KSU, and other Middle Eastern university clients but is not designated as a trust account. When wire receipts were transferred directly from Wire_8751 to Operating_2417 -- as documented in the March 18, 2024 transfer -- client trust funds entirely bypassed the trust account system.
The trust account evidence undermines Goldberg's credibility in multiple ways: - His own workup reported $0 revenue from KFU and KSU, yet these clients generated $13.26 million in trust-to-operating transfers - The recording discrepancy on the $595,214 wire calls into question the reliability of the entire accounting system he controlled - His affirmative defense that Litman consented to how his name was used is contradicted by Litman's documented objections to the financial management - Goldberg controlled the trust accounts, the operating accounts, and the flow of funds between them as "Co-Managing Partner" -- yet provided incomplete records when asked
The commingling evidence creates significant bar complaint exposure: - Virginia RPC 1.15 violations can result in suspension or disbarment - The pattern is systemic (2,160 transfers) rather than isolated - The $595,214 direct-to-operating transfer and $1,000 recording error suggest inadequate controls at best - Schaefer's statement about closing accounts because of commingling confirms the firm was aware of the problem
Under NY Civil Rights Law Section 51, damages include "any profits attributable to the use" of Litman's name. The trust account evidence demonstrates: - $17.5 million in client revenue flowed through accounts bearing Litman's name as responsible lawyer - All 2,160 transfers designated "RL" as the responsible lawyer -- Litman's name was the vehicle through which this revenue moved - The $15 million discrepancy between trust account totals ($32.7M) and Goldberg's workup ($16.5M) suggests additional unreported revenue attributable to Litman's name - KFU and KSU paid $13.26 million through trust accounts while Goldberg's workup showed $0 for these clients
The commingling evidence supports the following discovery demands (see FORENSIC_ACCOUNTING_DEMAND.md for full text): - All bank statements for Wire_8751 and Operating_2417 - All inter-account transfer authorizations and approvals - All communications with Schaefer regarding trust account management - Complete reconciliation of Wire_8751 receipts vs. trust account deposits - Freedom Bank account records and closing documentation - Identity of persons who authorized each trust-to-operating transfer
Critical questions for Goldberg's deposition: 1. Who authorized the March 18, 2024 transfer of $595,214 from Wire_8751 to Operating_2417? 2. Why was this transfer made to operating rather than to trust? 3. How was the $1,000 recording discrepancy discovered, and by whom? 4. Who authorized the April 9-10, 2024 routing of $587,358.87 in KFU trust funds through the operating account? 5. Why wasn't a trust-to-trust transfer used for the inter-bank migration? 6. What did Schaefer mean by "not supposed to have trust money for your own money"? 7. Were trust account reconciliations performed quarterly as required? 8. Who made the 2021 corrections returning $110,000 from operating to trust?
Critical questions for Schaefer's deposition: 1. What were the "two things" you wanted to discuss with Goldberg and MaryJane after your August 16, 2023 meeting with Litman? 2. Did you advise NGM that trust funds and firm funds were being held together? 3. What did you mean by "not supposed to have trust money for your own money"? 4. Did you perform trust account reconciliations? If so, did you identify discrepancies? 5. Were you aware that wire receipts were being transferred directly to operating?
| Date | Amount | Client | Docket | Account |
|---|---|---|---|---|
| 5/24/2023 | $615,110.00 | King Faisal University | 36372 | t3 |
| 9/15/2023 | $513,760.00 | King Faisal University | 36372 | t3 |
| 10/28/2024 | $497,252.00 | King Faisal University | 36372 | t3 |
| 11/20/2024 | $493,898.00 | King Faisal University | 36372 | t23 |
| 11/8/2024 | $490,490.00 | King Faisal University | 36372 | t23 |
| 12/27/2023 | $420,488.00 | King Faisal University | 36372 | t3 |
| 12/28/2022 | $384,250.00 | King Saud University | 35610 | t3 |
| 12/28/2022 | $359,770.00 | King Saud University | 35610 | t3 |
| 12/27/2023 | $347,520.00 | King Faisal University | 36372 | t3 |
| 2/29/2024 | $337,320.00 | King Faisal University | 36372 | t3 |
| 10/21/2024 | $308,054.00 | King Saud University | 35610 | t23 |
| 12/27/2022 | $281,129.01 | King Saud University | 35610 | t3 |
| 12/28/2022 | $262,571.55 | King Saud University | 35610 | t3 |
| 9/9/2022 | $217,710.00 | King Faisal University | 36372 | t3 |
| 12/29/2023 | $182,291.87 | UAE University | 35994 | t3 |
| 3/8/2024 | $175,200.00 | King Faisal University | 36372 | t3 |
| 9/15/2023 | $172,672.00 | King Faisal University | 36372 | t3 |
| 11/28/2022 | $167,655.00 | King Faisal University | 36372 | t3 |
| 2/26/2024 | $155,360.00 | King Faisal University | 36372 | t3 |
| 7/31/2023 | $154,800.00 | King Faisal University | 36372 | t3 |
| 1/9/2024 | $145,680.00 | King Faisal University | 36372 | t3 |
| 3/14/2024 | $142,400.00 | King Faisal University | 36372 | t3 |
| 4/4/2024 | $141,730.00 | King Faisal University | 36372 | t3 |
| 2/22/2024 | $138,800.00 | King Faisal University | 36372 | t3 |
| 3/19/2024 | $131,064.00 | King Faisal University | 36372 | t3 |
| 7/16/2021 | $130,675.00 | King Saud University | 35610 | t3 |
| 7/14/2021 | $130,625.00 | King Saud University | 35610 | t3 |
| 7/14/2021 | $127,695.00 | King Saud University | 35610 | t3 |
| 7/14/2021 | $126,725.00 | King Saud University | 35610 | t3 |
| 5/27/2020 | $125,800.00 | King Saud University | 35610 | t3 |
| Date | Amount | Docket | Account | Description |
|---|---|---|---|---|
| 7/16/2021 | $90,000.00 | 36056 | t3 | Op to Trust RCL / Transfer from attorney 00418 |
| 9/3/2021 | $20,000.00 | 36056 | t3 | Op to Trust RCL / From Nath, Goldberg & Meyer |
| 4/9/2024 | $500,000.00 | 36372 | t23 | Transfer from Op to Trust 36372/135900 KFU |
| 4/10/2024 | $500,000.00 | 36372 | t3 | Transfer to BOA Operating for transfer to EagleBank Op to Trust |
| 4/10/2024 | $87,358.87 | 36372 | t3 | Transfer to BOA Operating for transfer to EagleBank Op to Trust |
| 4/10/2024 | $87,358.87 | 36372 | t23 | Transfer to EagleBank Operating to Trust 36372/1359003372 |
| Document | Description |
|---|---|
| 20250616_Trust_Ledger_0723-0525.csv | Primary trust ledger, 27,898 rows |
| SOL_FINANCIAL_ANALYSIS_FOR_COUNSEL_v2.html | Financial analysis with commingling section |
| FORENSIC_ACCOUNTING_DEMAND.md | Discovery demands targeting trust accounts |
| ND263559 (2/9/2024) | Litman email re Freedom Bank trust accounts |
| ND263363 (8/15/2023) | Litman-Schaefer initial contact re accounting controls |
| ND263366 (8/17/2023) | Schaefer identifies "two things" to discuss with Goldberg |
| ND263489 (1/3/2024) | Litman requests Schaefer walkthrough of monthly reports |
| ND263713 (9/19/2024) | Litman proposes client service process, notes payment decline |
| ND263719 (10/2/2024) | Litman requests Soluno reports from Schaefer |
| ND263906 (6/4/2025) | Litman formal accounting data request |
| ND263922 (6/6/2025) | Litman requests 2020-2025 detailed trust ledger |
| ND263924 (6/7/2025) | Litman identifies KFU trust irregularities |
| ND264006 (6/19/2025) | Litman sends KFU payment analysis to Schaefer |