A federal judge has lifted the asset freeze on accounts for the law firm of Lang & Hvizdzak, and agreed to remove the name of Sean Hvizdzak from the accounts.
The Bradford law firm, formed in 2015 by Daniel Lang and Sean Hvizdzak, was included in the asset freeze last month by the Securities and Exchange Commission.
The SEC alleged a financial fraud had been committed by Hvizdzak, his brother Shane and a cryptocurrency hedge fund they operated.
On June 16, a judge in the U.S. District Court for the Western District of Pennsylvania granted an asset freeze for all accounts to which the brothers had access. The law firm had been swept up in the order, as Sean Hvizdzak had signatory authority over its accounts.
Lang had been working with the SEC to unfreeze the firm’s accounts since last month.
On Friday, Lang told The Era, “We’re grateful to the SEC for working with us. Now we can get clients’ money to them.”
A consent order entered into on Thursday with the SEC and attorneys for the Hvizdzak brothers noted the law firm accounts were unrelated to the alleged violations in the SEC case. The order noted that Lang provided an accounting of the funds in the firm’s bank accounts, which showed the funds were related only to the firm’s business.
It was noted, too, that Hvizdzak was entitled to some of the funds in the account as “accrued compensation for legal services rendered.” The judge — U.S. District Judge Susan Paradise Baxter — ordered those funds be transferred to the Court’s Registry, and that Hvizdzak’s name be taken off the firm’s accounts.
The freeze remains in place on all other accounts, the order noted.
Also in the case, Baxter agreed to extend the deadline by which the attorneys for the Hvizdzaks must respond to the SEC’s complaint against them to Aug. 21.
Shane Hvizdzak is represented by attorney Efrem Grail from Pittsburgh, while Sean Hvizdzak is represented by attorney David Berardinelli of Pittsburgh.
The Hvizdzak brothers are accused of bilking clients of their cryptocurrency hedge fund out of millions of dollars, diverting the money for their personal use rather than investing it, the SEC alleged.
Shane Hvizdzak, 32, of Bradford, who has taught at both University of Pittsburgh at Bradford and St. Bonaventure University, and Sean Hvizdzak, 34, of St. Marys, a local attorney whose clients include the City of Bradford Board of Health, were both named in the SEC complaint, temporary restraining order and asset freeze, which were filed June 16.
According to the SEC, the brothers allegedly took money from investors, said it was being invested in digital assets and fabricated statements saying the investments were earning huge returns.
However, the SEC says the brothers took in the neighborhood of $26 million from investors, put it in their personal accounts and then moved it outside the United States. Some of the funds were put in untraceable digital accounts, the SEC alleged.