Rubicon founder will sell Shore homes, student rentals, and a mini-golf course, but it won’t be enough to repay clients

Lawyers for Montgomery County investment manager Scott Mason and for a dozen clients who have filed civil fraud lawsuits seeking to recover up to $42 million from Rubicon Asset Management, the investment firm Mason ran for 30 years, told a judge Thursday that Mason has been putting his properties up for sale so he could repay money he owes them.

But the proceeds “won’t be close” to meeting investors’ full claims, Mason’s lawyer, Michael J. Rinaldi, said at a hearing before Montgomery County Judge Gail Weilheimer.

“At least it will be fair,” Rinaldi said, adding that Mason has been cooperating with the federal Securities and Exchange Commission and with lawyers for a dozen investors who sued his client to get their money back.

The lawsuits allege that Mason, without their authorization, took millions from their accounts, which were supposed to be invested in publicly traded stocks and bonds with little risk to their principal, and instead spent it on his real estate projects, and family expenses, including fancy parties.

Among the properties proposed for sale with the proceeds to be put into escrow are Mason’s interest in a Shore mini-golf course, Jen’s Links, and the Barnegat property around it; his Long Beach Island vacation house; and student rental properties in New York State near Hobart and William Smith Colleges. Mason is a Hobart graduate and former trustee.

Rinaldi, a former federal fraud prosecutor, said the SEC has an agreement with Mason to delay possible civil charges. Such agreements give the agency time to negotiate a settlement instead of filing charges.

Lawyers for the investors, including Benjamin Picker, a principal at Kaplin Stewart, representing Mason’s aunt Star Sitron and others, and Robert Hayes, a partner at Cozen O’Connor, representing retired insurance executive Stanley Tulin, Rubicon’s largest investor, asked the judge to order Mason to provide more detailed records and sell specific assets to help ensure the money is returned to investors in a timely way.

Hayes objected to defense suggestions that clients wait for federal investigators to finish their investigation.

“We’re not content to rely on what the SEC or FBI is doing,” he said, noting that bonds Rubicon had assured Tulin were in his account at the firm “have just disappeared. If you can’t give us the bonds, give us the money.”

The investors “aren’t trusting” Mason’s promises, Judge Weilheimer said. She questioned whether Mason might be willing to disclose more information beyond what’s in Rubicon’s records, as he already faces a federal investigation “target letter” and the possibility of “pending criminal charges.”

Rinaldi said Mason had already turned over many financial records and would provide additional documents if Weilheimer guaranteed privacy for some of the people mentioned in the records.

Weilheimer warned investors that “we are not anywhere close” to refunding their money.

Rubicon, which shut its former Blue Bell office last summer, invested a total of $231 million, mostly in mainstream stocks and bonds, for 115 clients as of March 31, according to reports the company filed with the SEC.

Lawyers Picker and Hayes said in court that they are also reviewing the role played by other financial institutions that didn’t prevent Mason from withdrawing funds without client authorization.