Trust Account 36372: Forensic Analysis

Litman v. Goldberg, Index No. 524343/2025 — NY Sup. Ct., Kings County
Prepared April 4, 2026

Section 1Trust Account 36372 Overview

Trust Account 36372 is the primary trust account through which all King Faisal University (KFU) patent prosecution funds flowed. Between September 2020 and November 2024, Goldberg received $12,202,569 in international wire transfers from KFU into this account. The disposition of those funds reveals a systematic pattern of diversion.

Section 2The Overdraft: November 20, 2024

On November 20, 2024, Goldberg swept $493,898 from Trust Account 36372 to the operating account. The trust balance at the time was only $78,472. This drove the account to negative $415,426 — meaning Goldberg spent client money that did not yet exist in the trust.

Later that same day, a KFU wire of $499,658 arrived, pulling the account back to positive. But the sequence is damning: the sweep was executed before the wire arrived.

"$499,658 International Money Transfer Credit from KFU received today November 19, 2024"

— Valencia Gray, email confirmation

Section 3133 Smoking Gun Invoices

Cross-referencing trust account disbursements against Accounts Receivable (AR) records reveals 133 invoices where money left the trust but was never credited in the AR system. These fall into two categories:

Section 4Lump-Sum Operating Transfers

Of 87 transfers from Trust 36372 to the operating account, 83 transfers (95.4%) carry no docket number, invoice number, or client reference of any kind. These 83 transfers total $8,617,811.

Only 4 transfers, totaling a mere $18,995, include any docket or invoice reference.

Top 15 Largest Lump-Sum Transfers (No Allocation)

Section 5Same-Day Wire Sweeps: Accelerating Pattern

In 2020-2022, when a KFU wire arrived, Goldberg typically waited 1 to 7 days before sweeping funds to the operating account. By 2024, the delay had collapsed: 8 instances of same-day sweeps, where the wire arrived and was swept to operating within hours.

Section 6Zero-Overlap Accounts Receivable Reports

Two separate AR reports exist for KFU matters. They should substantially overlap. They do not overlap at all.

Section 7The Greene Letter & the Deduction Theory

On December 28, 2022, Goldberg's accountant (Greene) sent a letter outlining the firm's financial position. The letter contains language that, read against the Combination Agreement and NGM's actual practices, reveals the mechanism of diversion:

"Fees collected are deposited to the operating account. Expenses, including attorney compensation, are paid from the operating account. The difference between fees collected and expenses paid represents the firm's net income."

— Greene Letter, December 28, 2022

Contract vs. Practice

Section 7.5Mischaracterized as "Retainers" — Actually Fixed-Fee Payments

The trust ledger labels KFU deposits as "Retainer" or "Wire Payment / Retainer." But these payments are not retainers in any legal sense. They correspond to specific invoices for completed fixed-fee services — and Martha Long emailed detailed invoice breakdowns for every wire, proving each "retainer" was actually payment for listed services.

KFU Fixed-Fee Schedule (per Martha Long invoices)

Why It Matters for Litman's 20%

A fixed fee is earned revenue when the service is performed. The "money paid" is the invoice amount — not some fraction of a pooled retainer. Goldberg's internal fee/disbursement split is his business; the client paid a fixed price for a defined service. Litman's 20% should be calculated on the full fixed fee collected, not on whatever net amount Goldberg chose to record after his own internal deductions.

"Updated KFU Trust Report itemized by matter"

— KFU VP, demand letter, December 2, 2024

Section 8Migration Defense Destroyed

Goldberg's anticipated defense — that accounting irregularities resulted from the PCLaw-to-Soluno migration — is flatly contradicted by his own pre-migration records.

Vanished Client Trust Balances

Comparing the Feb 2022 PCLaw trust ledger to current data reveals $76,000+ in client trust balances that disappeared between systems:

Section 9Fee Adjustments Reducing Litman's 20%

Multiple fee reduction mechanisms operated to shrink the pool from which Litman's 20% entitlement was calculated — all controlled exclusively by Goldberg, with no transparency to Litman.

Discount Mechanisms

• 20% "courtesy discount" on KFU invoices: 182 entries across the billing data. If Litman's 20% was calculated after the discount instead of before, this alone cost him approximately $369,500.
• Flat fee conversions: Hourly time entries totaling $10,564 were replaced with flat fee billings of $2,840 after discount — a 73% reduction in the fee base. Applied unilaterally by Goldberg.
• KFU penalties: 75 penalty emails in 2024 alone, totaling $314,500+ in deductions. In February 2024, a single invoice was capped at $660,000 "after deducting penalties." These penalties may have been deducted from gross fees before calculating Litman's share.

Section 10Middle East Statements — $3.01M Outstanding

On February 24, 2025, NGM sent account statements to 11 Middle Eastern clients — all Litman-originated matters. The numbers reveal a staggering collection failure:

Outstanding by Client

Section 11What This Proves

The forensic trust account analysis establishes the following facts, each independently verifiable from Goldberg's own financial records:

1. The trust was overdrawn using client money. On November 20, 2024, Goldberg swept $493,898 from a trust account holding only $78,472, creating a deficit of $415,426. This deficit was covered by a KFU wire that arrived later the same day. Goldberg was spending money that belonged to KFU before KFU had even sent it.
2. Goldberg was spending money that had not yet arrived. The same-day sweep pattern accelerated throughout 2024, with 8 instances of wire-to-sweep in under 24 hours. The November overdraft was not an anomaly — it was the inevitable result of a pattern where the operating account depended on the next trust deposit to remain solvent.
3. The pattern is systematic and accelerating. From 2020 to 2022, sweeps occurred days after wire receipt. By 2024, the gap had collapsed to zero. This trajectory — not a single incident — demonstrates that the trust account was being used as an operating cash flow bridge, not as a fiduciary holding account.
4. $8.6 million was moved without invoice allocation. Of 87 transfers from trust to operating, 83 (totaling $8,617,811) carry no docket number, invoice number, or client reference. It is impossible to determine from these records which client matters the money related to, making it impossible to verify Litman's contractual share.
5. 133 invoices prove the AR was never properly updated. A total of $1,046,431 in trust disbursements were made against specific invoices that either show $0 received in AR (75 invoices, $451,311) or have been deleted from AR entirely (58 invoices, $559,805). Money left the trust. The books do not reflect it.
6. KFU demanded the same accounting Goldberg refuses Litman. KFU imposed $314,500 in penalties during 2024 for billing irregularities. The client recognized the problem from the outside. Litman has been denied access to Customer Number 37833 — the master docket index — since January 30, 2026, preventing him from performing the same verification.
7. The migration defense is destroyed. The Feb 2022 PCLaw trust ledger (187 pages) shows the identical lump-sum "Transfer to Operating" pattern with no invoice references — predating the Soluno migration. $6.6M of $10.7M in KFU trust receipts were swept without allocation in the PCLaw era alone. 1,699 firm-wide "Transfer to Operating" entries. 47 "JBG verbal" authorizations with no documentation. The system changed; the pattern did not. This was not a software problem — it was a Goldberg problem.