Kuczynski v. UBS Alleges Custodian Enabled $473K Tax Hit on Trust Assets
Jurisdiction and Parties: Trust Assets Exceed $7.5M at UBS
As of an August 2025 statement, the Jane Casey Hughes Revocable Trust’s assets held at UBS totaled $7,544,121.82 (Compl. ¶14, Exhibit F).
The plaintiff, John-Michael Kuczynski, Ph.D., is a one-third residuary beneficiary of the Trust, which became irrevocable upon the settlor’s death on February 1, 2025 (Compl. ¶12, Exhibit M). The irrevocability of the Trust on that date vested Plaintiff’s one-third residuary interest, making it immediately distributable under the Trust’s terms (Compl. ¶48). The defendant, UBS Financial Services Inc., is the registered broker-dealer and custodian of the Trust’s assets.
Conflict-Ridden Transfer Under POA Named UBS Employee as Fiduciary
The complaint alleges UBS Financial Services Inc. accepted a transfer of approximately $7 million in assets from the Jane Casey Hughes Revocable Trust in January 2025 under a Durable Financial Power of Attorney that named Violet Louise Reid—a UBS employee—as successor attorney-in-fact. The transferred assets were moved from Charles Schwab to UBS under the POA (Compl. ¶2, 14, Exhibit F).
"UBS accepted the transfer despite a facial conflict," the complaint alleges, and "produced no supervisory, conflicts, or outside-business-activity disclosure records." (Compl. ¶18).
Liquidation of Long-Held Equity Portfolio Realized $473,533.05 in Avoidable Capital Gains
On August 29, 2025, UBS liquidated the Trust's entire long-held equity portfolio, realizing $473,533.05 in capital gains, of which $469,775.10 were long-term and $3,757.95 were short-term. The complaint alleges the liquidation violated the Trust’s mandatory distribution directive, stating, "no in-kind distribution was made." (Compl. ¶20). The complaint asserts that the liquidation generated fee revenue for UBS, directly benefiting the firm at the expense of the Trust’s beneficiaries (Compl. ¶34).
UBS Restructured Trust Account and Wired $70,582.79 to Trustee’s Litigation Counsel
On October 29, 2025, UBS restructured the Trust's single account into six sub-accounts and wired $70,582.79 to Offit Kurman, P.A., the trustee’s litigation counsel, without authorization. The complaint alleges this wire transfer constituted unauthorized dominion and control over Trust property, violating UBS's custodial obligations. Offit Kurman later admitted in writing that the funds were used to pay legal fees for the "defense of unjustified litigation proceedings," further tying UBS to the unauthorized use of Trust assets (Compl. ¶29, Exhibit H).
The complaint asserts that UBS's actions deprived the plaintiff, John-Michael Kuczynski, Ph.D., of his one-third residuary share of the Trust, which vested and became distributable upon the settlor's death on February 1, 2025. "UBS exercised unauthorized dominion and control over Trust property to the exclusion of Plaintiff’s rights," the complaint alleges. "Plaintiff’s interest in those specific, identifiable funds is superior to any interest of UBS." (Compl. ¶48-49). The complaint further details that UBS’s dominion over the assets continued even after written notice of the dispute was provided on April 20 and 27, 2026 (Compl. ¶50).
Fraud and Negligent Misrepresentation Claims Center on "Freeze Letter" Authored by Trustee’s Counsel
The complaint alleges the "freeze letter" (UBS Reference No. 43772714-2025-1115) was authored in Microsoft Word by a legal assistant at Offit Kurman, on January 16, 2026, and not by UBS (Compl. ¶26, Exhibit H). The letter was undated and unsigned, and the complaint asserts it was falsely represented as a genuine UBS communication. "A genuine UBS 'Subpoenas, Levies and Garnishments Group' communication could not have been authored in Microsoft Word by a named individual at Offit Kurman, P.A.," the complaint alleges (Compl. ¶54).
On April 8, 2026, UBS’s outside counsel, Elizabeth Small of Riker Danzig LLP, responded to the Plaintiff’s inquiry about the freeze letter, but the complaint alleges UBS took no further action to correct or disavow the instrument (Compl. ¶27, Exhibit H). Despite written notice from the plaintiff on April 20 and 27, 2026, demanding that UBS maintain account restrictions, UBS failed to correct or disclaim the instrument. The complaint alleges UBS either knowingly or recklessly issued a false instrument or negligently failed to disavow it after notice, leading to claims of fraud and negligent misrepresentation. "UBS negligently failed to disavow, correct, or disclaim the instrument it knew or should have known was being represented as its own," the complaint states (Compl. ¶55). The reliance on the freeze letter by courts and parties was "intended, foreseeable, and directly injurious to Plaintiff." (Compl. ¶56).
Claims Include Negligence, Aiding and Abetting Breach of Fiduciary Duty, and Conversion
The complaint asserts five counts against UBS: negligence/breach of custodial duty of care (Count I), negligent supervision (Count II), aiding and abetting breach of fiduciary duty (Count III), conversion (Count IV), and fraud and negligent misrepresentation (Count V).
The conversion claim asserts UBS exercised unauthorized dominion over Trust property by wiring $70,582.79 to Offit Kurman (Compl. ¶49). The complaint further alleges that UBS’s actions in liquidating the portfolio and restructuring the accounts were taken without regard for the Plaintiff’s vested interest in the Trust’s assets.
Plaintiff Seeks Damages, Disgorgement, Punitive Damages, and Injunctive Relief
The complaint demands judgment in the plaintiff's favor on all counts, including compensatory damages for the capital-gains tax liability attributable to the $473,533.05 in avoidable realized capital gains. The plaintiff also seeks disgorgement of fees earned by UBS in connection with the liquidation and managed accounts, punitive damages to the extent permitted by law, and injunctive relief compelling UBS to produce the complete transfer file, all six account records, and its internal compliance and restriction-decision records. The plaintiff further requests an order preserving the status quo of the restricted accounts pending adjudication, as well as pre- and post-judgment interest, attorneys' fees, and costs. A jury trial is demanded on all triable issues (Compl. Relief section).
The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.
David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.
From the Complaint Public Court Record
UNITEDSTATESDISTRICTCOURT SOUTHERNDISTRICTOFNEWYORK JOHN-MICHAELKUCZYNSKI,Ph.D., Plaintiff, -against- UBSFINANCIALSERVICESINC., Defendant. CivilActionNo.1:26Cv.06119 COMPLAINT JURYTRIALDEMANDED PlaintiffJohn-MichaelKuczynski,Ph.D.,byandthroughundersignedcounsel,forhisComplaint againstDefendantUBSFinancialServicesInc.(“UBS”),allegesasfollows: NATUREOFTHEACTION 1.ThisisacivilactionagainstUBS,aregisteredbroker-dealer,arisingfromitsconductas custodianofapproximately$7millioninassetsbelongingtotheJaneCaseyHughesRevocable Trust(the“Trust”),ofwhichPlaintiffisaone-thirdresiduarybeneficiary. 2.InJanuary2025—weeksbeforethesettlorJaneCaseyHughesdiedonFebruary1,2025— UBSacceptedaninboundtransferofapproximately$7millionexecutedunderaPowerof Attorneythatnamed,onthefaceoftheinstrument,athen-currentUBSemployee—Violet LouiseReid—assuccessorattorney-in-fact,andthatnamedthesameUBSemployee,underthe companionTrustinstrument,asbackupsuccessortrustee.Becausethesettlorwasstillliving,the transferwasmadebyanattorney-in-factunderthePowerofAttorney,notbyatrustee.UBS producednorecordofthesupervisoryorconflictsreviewthatacceptanceofsuchatransfer required.SeeExhibitsA,B,F,K,M. 3.OnAugust29,2025,theentirelong-heldequityportfoliointheTrust’sUBSaccountwas liquidatedinasingleevent,generating$473,533.05inrealizedcapitalgainsthatin-kind distributionundertheTrust’smandatory“outrightandfreeoftrust”languagewouldhave avoided.SeeExhibitsA,C.Sixtydayslater,thesingleaccountwasfragmentedintosixaccounts and,onthesameday,$70,582.79inTrustassetswaswiredtothetrustee’slitigationcounsel.See ExhibitsD,E. 4.Thedocumentfiledinmultiplecourtsasthe“UBSfreezeletter”restrictingtheTrust’ssix accounts—bearingUBSReferenceNo.43772714-2025-1115—isundated,unsigned,and,per itsownnative-fileproperties,wasauthoredinMicrosoftWordbyalegalassistantinsidethe officesofthetrustee’scounsel,OffitKurman,P.A.(Author:“[a legal assistant at the firm]”),notatUBS.See ExhibitsH,I.Thedocument’sauthenticityisindependentlyverifiablebyforensicexaminationof
thenativefil
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