Former Hillbroom trustee asks court to dismiss cross-claims by co-defendant

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JUNIOR Larry Hillbroom’s former trustee Keith Waibel has asked the federal court to dismiss with prejudice the cross-claims of one of his co-defendants.

Waibel’s co-defendants are Hillbroom’s former attorneys, David Lujan and Barry Israel.

Lujan and Israel were sued by their former client for legal malpractice, negligence, breach of fiduciary duty, fraud, and violations of Racketeer Influenced and Corrupt Organizations Act.

Waibel, the former trustee of Hillbroom’s trust, was sued for conspiracy.

Israel recently filed a motion for summary judgment for his cross-claims against Waibel for defamation.

Israel requested the court to enter a judgment against Waibel and issue an award of $1,442,877.67 and punitive damages in the amount of $400,000.

In response, Waibel said, “I have never been interviewed by any media about Israel or Lujan. I declined to comment and refused to cooperate with the book and the film regarding the death of Larry Lee Hillblom. Israel spoke with the New York Times, the writers of a book, the producers of a film. He chose to make himself a public figure. He was on the cover of Saigon Times. My comments, which never named Israel, were among at the most four individuals. Paul Flanney (Mr. Hillbroom and my business partner at the time) Jan Vail (another partner who was secretly working for Israel) and myself.”

Waibel said his “assertion that there is a criminal in Vietnam was only made public by Israel himself and only identified at my deposition when asked who I meant.”

He said the claim against him “is almost laughable as it is much ado about nothing and is a blatant attempt to use this court to bully me. Israel and his lawyer bullied me during my deposition…. Conduct matters and Israel and his attorney have not behaved in this civil suit in a civil manner.”

Israel and Lujan, who represented Hillbroom when he was a minor, secured $90 million from the Larry Lee Hillblom estate. When he became an adult, however, Hillbroom sued his former lawyers for malpractice and Waibel for conspiracy.

Hillbroom is one of the four DNA-proven heirs of DHL Corp. founder Larry Lee Hillblom who died in a plane crash in 1995 near Saipan, leaving behind him an estate estimated at about $600 million.

Hillbroom accused the defendants of committing extrinsic fraud on the Guam guardianship court by denying him a fair opportunity to challenge their 56% retainer.

According to Waibel, the “core of this litigation is the 56% retainer that I signed along with Israel and Lujan and presented to the protectors and [Guam] Judge Alberto C. Lamorena III. It was wrong for me to go along with it and I take responsibility for my part of it. It was wrong then and it is wrong now.”

Waibel said  Israel’s attorney wanted to know “why I am so cooperative with the plaintiff these last 10 plus years.”

“First of all,” he added, “it is the right thing to do, and I am a person that doesn’t always do the right thing. I have fully admitted my part in the intrinsic fraud against Junior Larry Hillbroom.”

He said during the Federal Bureau of Investigation, Internal Revenue Service and assistant U.S. attorney’s investigation and two grand juries regarding Israel and Lujan, “I received collateral immunity from prosecution,” Waibel said.

“As part of that immunity I am to cooperate completely and honestly with any investigation criminal or civil,” he added.

“I am precluded from trying to prevent in anyway Mr. Hillbroom’s recovery of his fraudulently taken funds. I cannot impede in any way this lawsuit. Though his recovery was expected to be handled through the court’s restitution plan, that did not occur so this federal lawsuit was filed.”

Waibel said he has not “spun some fairy tale as Israel has done here.”

He claimed that “in order to get away with this fraud, my co-defendants continue to use suppositions, partial testimonies, unaudited financial statements, omission of other financial statements, secrecy, such as the mediated agreement and Israel’s IRS settlement. There may be other locations besides Hong Kong and Macau that held funds that were supposed to be Mr. Hillbroom’s, but Israel is not forthcoming about those.”

Waibel said, “Israel, through his counsel, are attempting to use this court to continue sheltering his unearned profits and shielding himself from having to answer for his actions.”

Waibel said Israel “doesn’t answer why he received 70% of the profits from Vietnam and Mr. Hillbroom 30%. He doesn’t answer for the 5 to 6 million dollar kickback…in the Carlsmith litigation. He claims that this music teacher/insurance agent [Waibel], masterminded a plan to harm him and Lujan — that is probably the most fantastical claim in this motion.”

In July 2020, Hillbroom agreed to dismiss Israel from the lawsuit after a settlement agreement was reached. A stipulation of dismissal from the parties was then filed in court.

As for Lujan, he and Hillbroom’s attorney Rachel Dimitruk told Chief Judge Ramona V. Manglona of the District Court for the NMI that mediating will continue.

Judge Manglona will hear Israel’s motion for summary judgment on Oct. 1 at 8:30 a.m.

She also vacated the jury trial scheduled for Oct. 27 and reset the trial for Dec. 1 at 10 a.m.

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