By Erik Shilling of lohud.com

The estranged wife of a hedge-fund executive is suing her husband in federal court after, she says, he hid assets from her in the Cayman Islands and engaged in a wide-ranging fraud to destroy a financial services company.

Elizabeth Bingham-Perry of Scarsdale married Jeffrey R. Perry in 1989, before he made at least $40 million on Wall Street as a hedge-fund executive, most recently with Third Point LLC, which is controlled by the billionaire Daniel S. Loeb, according to the lawsuit.

When the relationship soured, and Jeffrey Perry sued his wife for divorce in 2010, Bingham-Perry began to discover her husband’s alleged fraud, according to the lawsuit, and it was as early as 2005 that Jeffrey Perry of White Plains began to move his assets into “secret accounts,” effectively sealing them off from his wife and the state Supreme Court in White Plains, where their divorce is being processed.

Further, Bingham-Perry claims, much of Jeffrey Perry’s wealth was acquired illegally, after he and his partners at Third Point devised a scheme to destroy a Toronto-based financial services company, Fairfax Financial Holdings, to make money from short-selling Fairfax’s stock, or, betting on it to lose. Fairfax sued Third Point and a number of other hedge funds — as well as Jeffrey Perry — in 2006, alleging that they had been victims of a so-called “bear raid,” but Jeffrey Perry and Third Point were later dismissed from that lawsuit, which still has not been resolved.

But Bingham-Perry said in her own lawsuit that her husband was a key player in the scheme, a claim that might entitle her to damages under the Racketeer Influenced and Corrupt Organizations Act, better known as RICO. Bingham-Perry’s lawsuit was filed July 9 in U.S. District Court in White Plains.

“Jeffrey’s career has been marked by repeated criminal activity in his quest to amass his fortune,” the lawsuit alleges.

Part of the alleged scheme involved planting damaging stories in the news media, including, in May 2006, when Loeb told Jeffrey Perry to depict Fairfax as the “next Enron,” according to the lawsuit. After Jeffrey Perry funneled information to a New York Post reporter, the lawsuit says, an article accusing the company of trying to prop up its “sagging balance sheet” with complex overseas financial transactions appeared in July 2006, with the headline, “Island Hopping; Insurer’s Offshore Deals Eyed by Feds.”

Jeffrey Perry has been served with Bingham-Perry’s lawsuit, according to court records, and in court papers Philip Halpern, a lawyer for Jeffrey Perry, called the lawsuit an attempt to “harass” his client and “increase his costs of litigation” for their pending divorce.

Halpern said he would ask Judge Cathy Seibel to dismiss the lawsuit, as well as seek to file a Rule 11 motion against Bingham-Perry, which might force her to pay Jeffrey Perry’s legal fees if a judge rules that her lawsuit is frivolous.

“I fully expect the case to be dismissed, on the merits,” Halpern said in an interview Tuesday, adding that it was filed just days after Bingham-Perry lost custody of her children to Jeffrey Perry. “It’s baseless.”

Halpern’s claims were heavily disputed by Bingham-Perry’s lawyer, Howard W. Foster, in his own letter to the court.

Both sides convened at a hearing Tuesday, and Seibel gave the lawyers deadlines to file their motions or amended pleadings. The case’s next court date has not yet been scheduled.

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