A San Antonio accounting firm has been caught up in the widening litigation arising from the contentious divorce of real estate developer Graham Weston and his wife Elizabeth.
She has accused Irwine Pruitt Associates and principal James Irwine of assisting her estranged husband in creating more than 150 business entities and trusts that were used to defraud her of property ownership rights in the various assets and their income.
She estimates more than $1 billion in assets and income are involved.
Elizabeth Weston last week sued Irwine Pruitt and Irwine for fraud and breach of fiduciary duty in state District Court in San Antonio. She seeks more than $1 million in damages and unspecified punitive damages.
“Because Graham claims that all property acquired during the marriage is his separate property, that now reveals a long-running scheme to fraudulently conceal and remove property from Elizabeth’s rightful possession and joint community control,” she alleges.
The business entities and trusts used to hide the property serve as Graham Weston’s alter egos, she adds in her complaint. He is not a defendant in the lawsuit.
Elizabeth Weston has sued San Antonio accounting firm Irwine Pruitt Associates and principal James Irwine.
File photoElizabeth Weston filed to end their marriage Oct. 26 in Comal County. Graham Weston had filed his own divorce petition but dropped the action just 25 hours later. They married in 1994. Both live in New Braunfels.
She says she suffered emotional, psychological, physical, and sexual abuse during her 26-year marriage to the Rackspace Technology Inc. co-founder. He has denied those allegations and accused her of hiring a private investigator to track him for a year and a half.
A key issue in the divorce is whether the wealth Graham Weston amassed over his career is his own or community property that belongs to them both. He intends to argue he has placed the vast majority of assets accumulated during the marriage in a trust that he controls.
Graham Weston made an appearance on Forbes magazine’s annual billionaires list in 2013 before quickly dropping off.
The couple does not have a prenuptial agreement, according to one of her lawyers.
Last month, Graham Weston sued San Antonio attorney Jason M. Davis. and his law firm for allegedly accepting $2.9 million in legal fees to represent him in various matters — only to “secretly” agree to serve as his wife’s counsel in the divorce. Davis has disputed the allegations, but a judge disqualified him from representing her in the divorce, citing a conflict of interest.
Elizabeth Weston now alleges their long-time accountant had a conflict of interest.
The complaint she filed against Irwine Pruitt and Irwine focuses on a nearly 2,600-square-foot Aspen, Colo., townhouse her husband allegedly contracted in June 2020 to buy for almost $7.7 million.
Irwine had represented to her that the townhouse was “community property” belonging to both her and Graham Weston, the suit says.
She later learned Graham Weston assigned the real estate contract for the townhouse to a company called Mountain Nest in July 2020. A day after the closing, Irwine — acting as Mountain Nest’s manager — gave a mortgage deed and lien note to Wittington America Ltd. in exchange for a nearly $7.8 million loan, the complaint adds.
Wittington’s general partner is Overlord Capital, a company owned by Graham and Elizabeth, according to the suit.
She wants an accounting of any funds that flowed out of Wittington in connection with the Aspen townhouse purchase.
It was only when Elizabeth Weston saw that James Irwine was serving as Mountain Nest’s manager that she became aware he was “acting contrary to her property interests, and that the CPA firm was also negligent in failing to discover this irreconcilable conflict of interest,” the suit says.
Irwine and his firm prepared the Westons’ various joint federal tax returns over the course of their marriage, the complaint says. Irwine had represented to Elizabeth Weston that the business entities and trusts reported on the returns was community property, the filing adds.
Irwine’s actions violated the duties he owed to her, she says.
Elizabeth Weston says she’s been denied sufficient information to prepare her 2020 income tax return. Since her divorce filing, she says she has learned the Internal Revenue Service has sent notices and conducted audits, though she doesn’t knows the details, her suit says.
Representatives for Elizabeth Weston and Irwine did not respond to requests for comment Wednesday. A representative for Graham Weston declined to comment.
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