A New Jersey couple that invested $1.2 million in a real estate fund that quickly went bust is partially blaming a Rockland financial advisory firm for their losses.
Julie DiRico and Martin Hyman, retired doctors in Watchung, New Jersey, accused Christopher Conover and his Hudson Valley Wealth Management Inc., of Pearl River, of negligence, Feb. 10 in U.S. District Court, White Plains.
Conover said in a brief telephone interview that he was “totally blindsided” by the lawsuit. “We, as a firm, are doing everything we can to protect our clients, and we always have and we always will.”
Conover said his firm was merely a paperwork middleman. His role was to make sure that the real estate fund was properly structured and regulated. And now he is helping investigators who are trying to figure out what went wrong.
Initially, the doctors hired Keith Ryan Gebert and his Rightbridge Capital Management firm for investment advice. Gebert advised them to invest about $716,000 in retirement savings with Brookstone Capital Management, of Wheaton, Illinois.
Gebert has since been sanctioned in New Jersey and Oregon for dishonest conduct. He is no longer a registered investment adviser and Rightbridge is defunct, according to the lawsuit.
In 2022, when DeRico inherited $1.2 million, Gebert advised her to invest in ProudLiving New Jersey Real Estate Fund, in the doctors’ account at Brookstone. The real estate fund was to pay back 10% interest for two years, at $10,000 a month, and then repay the principal.
ProudLiving distributed $70,000, then payments ceased in 2023. In January 2024, a statement showed that the investment had grown to nearly $1.3 million. A month later, the investment was valued at $0.
Gebert invited the retired doctors to a meeting with ProudLiving’s principals, Thomas J. Caleca and Rocky Fuoco. Gebert, Caleca and Fuoco allegedly claimed that ProudLiving was under an audit that would soon be resolved, and said there was nothing to worry about.
This past Jan. 3, ProudLiving issued an email stating that the fund was closing, “and based on advice of legal counsel we are unable to share any additional information at this time.”
The couple says they have been left with an investment that is probably worthless “and are faced with the possibility of living with substantially diminished retirement funds for many years.”
They accused Brookstone of breach of fiduciary duty and negligence for allowing the ProudLiving fund to become part of their account. The real estate fund was a high risk, illiquid investment that was unsuitable for their needs, they argued, and Brookstone should have known that Gebert was unfit to make suitable investment recommendations.
Brookstone did not reply to a message asking for its side of the story.
Similarily, the doctors argue that Conover and Hudson Valley Wealth Management, in collecting paperwork for the ProudLiving fund, assisted Gebert and Brookstone.
Conover said the doctors made their investment directly with ProudLiving. He never met them, but “they may have talked once on the phone.”
He described his firm’s role as administrative.
“No money came to us,” he said. The firm did not review or approve the paperwork, did not make any decisions, had no role with Brookstone or Gebert, and had “absolutely no control” over ProudLiving.
DiRico and Hyman are demanding unspecified monetary damages.
