The Real Deal New York

American Realty’s Schorsch accused of cooking the books

Ex-accounting chief claims she was fired for blowing the whistle on bogus earnings numbers

December 19, 2014 08:50AM

From left: Nicholas Schorsch and Lisa McAlister

From left: Nicholas Schorsch and Lisa McAlister

American Realty Capital Properties’ former chief accounting officer claims in a new lawsuit that she was fired for blowing the whistle on accounting errors at the firm.

Lisa McAlister claims in the suit, which was filed in New York state court in Manhattan, that she told then-chairman Nicholas Schorsh and David Kay, the chief executive officer at the time, about intentionally concealed mistakes in the books before she was fired, according to Bloomberg News.

Schorsch resigned as executive chairman of the company this week but still controls a number of real estate companies through his firm AR Capital. Kay and then-chief operating officer Lisa Beeson all left the company in the wake of the accounting scandal. An audit found that the company’s chief financial officer intentionally failed to fix accounting errors to hide the firm’s financial problems and exaggerate the company’s earnings.

McAlister started working at American Realty Capital in November 2013 and became the firm’s chief accounting officer in July 2014, according to the website. She claims that her former employer defamed her in a press release and blamed her for the accounting errors at the firm. Because of that, the suit alleges, McAlister has been unable to find a new job and “is concerned about her professionalism and integrity, thereby leaving her unable to care and without health insurance for her two special needs children, an autistic child and a child with cerebral palsy,” according to the suit.

In a statement, AR Capital responded that McAlister’s suit was without merit and denied any wrongdoing on Schorsch’s part, according to Bloomberg. “We are confident that Mr. Schorsch has engaged in no unlawful conduct,” according to the statement. “Although the ARCP Audit Committee investigation is continuing, we understand that to date there has not been any conclusion of unlawful conduct by Mr. Schorsch.” [Bloomberg News] and [Investment News]— Claire Moses

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