Daniel Garigen, who holds a 40% stake in Dansa D’Arata & Soucia CPAs LLP, has accused managing partner Eric Soucia of financial and workplace misconduct in a lawsuit filed this month in New York Supreme Court that seeks to force Soucia to give up control of the company.

Garigen’s suit accuses Soucia of potentially costing the firm up to $750,000 because of mismanagement of the company’s 401(k) account and, additionally, of harassment and other mistreatment of Dansa D’Arata employees.

“Mr. Soucia’s behavior has been and continues to be erratic, unprofessional, fraudulent and possibly criminal,” Garigen claims in his Feb. 2 complaint, filed by attorney Brian D. Gwitt. “It is undisputed that he is jeopardizing the continued operation of Dansa D’Arata.”

Soucia and his attorney respond that Garigen is making false accusations against Soucia, who owns 60% of the firm, in a bid to take over the company that has grown since the pair bought out the founding partners in 2021.

The two men paid in excess of $4 million for the firm less than 14 months ago and already have received an offer that values Dansa D’Arata at $12 million, Soucia’s attorney, Charles C. Ritter Jr., said in a court filing.

Further, Ritter wrote, Garigen improperly filed a public lawsuit instead of taking the matter to arbitration as required under the partnership agreement.

“The petition is little more than a narrative of sensationalized allegations drafted as a coercive tool to embarrass and discredit me as part of a scheme by Daniel Garigen, my minority partner, to seize control of the partnership,” Soucia said in an affidavit.

The accounting and consulting firm was founded by partners Michael J. Dansa and Daniel J. D’Arata in 1999. The company is located downtown and has about 40 employees.

In a transaction that took effect Jan. 1, 2022, Dansa and D’Arata sold their partnership interests to Soucia and Garigen. Dansa and D’Arata remain as contract employees of the firm, which identifies them as partners on its website.

Soucia, who already was a named partner, took a controlling interest and invited Garigen to take part in the deal, Ritter wrote.

The accusations Garigen lodged against his partner date to 2018, according to Garigen’s lawsuit, previously reported on by Buffalo Business First. Several center on how Soucia, as plan administrator, managed 401(k) retirement accounts for Dansa D’Arata partners and other employees.

First, Garigen claims, Soucia between 2018 and 2021 used partnership funds to make elective contributions to his personal 401(k) account, effectively stealing about $60,000 from the company.

Soucia did this by putting a disproportionate amount of firm profit-sharing contributions into the fund and, then, immediately withdrawing the money by making a false “hardship” claim, Garigen contends. Because Soucia controlled access to the 401(k) records, it allowed him to avoid detection for years, according to the lawsuit.

Garigen claims Soucia withdrew $350,000 in all from his 401(k) plan between 2019 and last year by using a questionable hardship argument. This “abuse” puts the firm at financial risk, the lawsuit claims, at a minimum for replacing the improperly withdrawn $350,000.

The 401(k) plan also could be disqualified, meaning employees may have to pay income taxes on money they contributed and, if so, they may bring litigation against the firm in response, Garigen argues.

Finally, Garigen claims, Dansa D’Arata will have to make significant corrective payments for 2019, 2020, 2021 and possibly 2022 to boost profit-sharing contributions to non-owner employees, bringing the total cost to the firm for the 401(k) issues to as much as $750,000.

Garigen also raises concerns about Soucia’s personal and workplace conduct. In 2019, according to the lawsuit, Soucia was verbally disciplined and required to take sexual harassment training after three women at the firm filed complaints against him.

One woman, Garigen claims, accused a drunken Soucia of telling her, “I own you”; throwing pretzels and candy at her; and pulling at her hair and asking, “How does it feel not to be a CPA?”

A second woman said Soucia touched her hair inappropriately and told her, “Your hair was bothering me like that,” the lawsuit states.

The two women left the firm shortly after these incidents, according to Garigen, as did a third woman who accused Soucia of making demeaning, disparaging remarks toward her.

In May 2022, Garigen claims, Soucia agreed to end an extramarital affair with a direct subordinate, but the affair continued through December, when Garigen confronted him again, and beyond. For example, Garigen claims, Soucia and this woman recently took a “romantic trip” and he used a company credit card to pay for it.

“It has had and continues to have a devastating effect on office morale,” Garigen writes.

Finally, Garigen claims, Soucia failed to note that he has a pending driving while intoxicated charge when he filed to renew his CPA license with the state Education Department.

In all, Garigen asks the court to require Soucia to make Dansa D’Arata financially whole and to either remove Soucia from the partnership or dissolve the partnership.

In response, Soucia and his attorney said Garigen confronted Soucia on Jan. 30 with a draft petition that he threatened to file publicly if Soucia did not step down as managing partner.

“Garigen’s petition and tactics are nothing more than an unlawful ‘power grab,’” Soucia said in an affidavit.

Ritter stated Soucia declined to step down in response to this “extortion” but agreed to a “brief cooling down period,” working at home for several days while attorneys discussed the matter.

Instead, Garigen on Feb. 2 filed the lawsuit.

Much of the purported misconduct took place before Garigen agreed to join Soucia in purchasing the firm.

Ritter said Garigen is only belatedly raising concerns about Soucia because the partners on Jan. 25 received a letter of intent to purchase 75% of Dansa D’Arata that values the firm at $12 million, triple the amount the partners paid 13 months earlier.

In his affidavit, Soucia said Garigen and other firm employees, including Garigen’s wife, had access to 401(k) records and were fully aware of how the account was managed.

Ritter went on to blast Garigen’s complaint as “nothing more than a well scripted, salacious tale devoid of supporting evidence and detached from the reality of how the partnership has operated.”

Soucia denied wrongdoing. Ritter wrote that the accusations of misconduct toward other employees were “speculative” and “irrelevant” to the main issues at play.

On Tuesday, State Supreme Court Justice Emilio Colaiacovo granted Soucia’s request to pause the lawsuit and send the matter to arbitration, the lawyers said.

“The decision validates Mr. Soucia’s position throughout these early proceedings that the petition never should have been filed,” Ritter said in an email.

The judge also declined to temporarily remove Soucia as managing partner of the firm, as requested by Garigen.

Colaiacovo did issue several directives, including barring the use of company credit cards for personal expenses; prohibiting certain workplace conduct; and authorizing outside counsel to examine the 401(k) fund and make recommendations on its management. Ritter said the “limited” directives apply to all employees, and Soucia welcomes the independent review of the retirement account.

Gwitt declined comment on Tuesday’s court action, but said his client wanted to offer reassurance that “these business issues between the partners are not impacting client services.”

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