hereby ORDERED.
DATED: February 18, 2026 Order Filed on February 18, 2026 by Clerk
U.S. Bankruptcy Court
District of New Jersey
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INTRODUCTION
The d Valley Motion to Dismiss [ECF No. 8] the plaintiff AIRN Liquidation Trust Co., Plaintiff Complaint. The Plaintiff seeks a judgment against Valley based on its alleged role in a real estate Ponzi scheme carried out through the debtors, National Realty Investment Advisors, LLC, and its affiliates NRIA 1[ECF No. 1]. Valley performed banking services for NRIA from July 2021 to December 2021, during which time NRIA opened eleven (11) business accounts. [ECF No. 1, ¶¶ 2, 56].
aiding and abetting claims should be dismissed for failing to adequately allege that Valley had actual knowledge of the Ponzi scheme or substantially assisted the Ponzi scheme. It also argues ificant claims should be dismissed on other grounds. [ECF
No. 8-2, p. 9 of 37]. The Court has recently decided a similar motion to dismiss by a bank that was sued by the Plaintiff based on its dealings with NRIA and its principals. AIRN Liquidation Trust Co., LLC v. Bank of America, N.A., Case No. 22-14539, Adv. Pro. No. 25-01239 (Dec. 31, 2025), BofA Decision BofA Case ). The Court will incorporate much of the legal analysis in that decision.
JURISDICTION
This Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 1334(b), 157(a), and the Standing Order of Reference from the United States District Court for the District of New
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Jersey. The Plaintiff alleges that this is a core proceeding citing to 28 U.S.C. § 157(b)(2). Valley argues that this is a non-core proceeding and does not consent to the entry of final orders or judgment by the Bankruptcy Court. Fed. R. Bankr. P. 7008. To the extent this proceeding (or any part thereof) is ultimately determined to be non-
proposed findings of fact and conclusions of law under 28 U.S.C. § 157(c)(1).
FACTS AND PROCEDURAL HISTORY
The Complaint alleges that Thomas Nicholas Salzano a/k/a Nick Salzano, Rey E. Grabato II, and other co-conspirators operated NRIA, a purported real estate development firm and fund manager, as a Ponzi scheme that lured Investors by promising high rates of returns. Throughout the course of the scheme, NRIA raised approximately $664 million from almost 2,000 Investors. [ECF No. 1, ¶ 1]. In March 2021, Salzano was arrested for giving an Investor a forged term sheet. Casey Group
[ECF No. 1, ¶¶ 5, 52]. The Casey Group was appointed as manager effective November 1, 2021, and was responsible for ensuring NRIA used the -14539,
ECF No. 16, p. 5 of 22].
NRIA filed for Chapter 11 relief on June 7, 2022. The Court confirmed its Amended Chapter 11 Plan on August 10, 2023, which provided for the formation of the Liquidating Trust as litigation claims belonging to the Trust
22-14539, ECF No. 3599].
In 2002, Grabato opened personal bank accounts at Valley. [ECF No. 1, ¶ 23]. relationship with Valley did not begin until July 2021, which was f
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arrest. [ECF No. 1, ¶¶ 5-6, 28]. NRIA opened its Valley accounts after other banks terminated NRIA as a customer. Between July 2021 and December 2021, approximately $40 million of new, into Valley accounts. In total, approximately $265 million flowed through eleven (11) Valley accounts during this five-month-long banking relationship. [ECF No. 1, ¶¶ 28-32]. For the last two of the five months, NRIA was managed by the Casey Group. The Plaintiff does not suggest that The allegations in this Complaint are very similar to the allegations in the Complaint in the BofA Case.2The Complaint against Valley contains twelve (12) counts summarized below.
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[ECF No. 1]. In its Motion to Dismiss, Valley makes the same primary arguments as the bank in the BofA Case: (i) the Plaintiff lacks standing and (ii) the Plaintiff fails to sufficiently plead the aiding and abetting claims. [ECF No. 8-2].
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ANALYSIS
Valley argues that the Plaintiff does not have standing to pursue tort claims against it. The Court found that the Plaintiff has standing in the BofA Decision, and it has standing here for the same reasons. First, the Plaintiff has standing to pursue tort claims on behalf of NRIA because the Plaintiff was established to pursue or liquidate the Liquidation Trust Assets and make distributions to Liquidation Trust Beneficiaries pursuant to the terms of the Liquidation Trust Agreement.3 [BofA Decision, p. 8]. Second, anti-assignment law is preempted by § 1123 of the Bankruptcy Code
Trust was an appropriate means of plan implementation under § 1123(a)(5). [BofA Decision, pp. 9-11]. Third, the terms of the confirmed Plan per the Confirmation Order preempt state law and there are no compelling reasons to reconsider that decision. [BofA Decision, pp. 11-13]. Therefore, the Plaintiff has standing to bring tort claims against Valley on behalf of NRIA and the Investors. To establish aiding and abetting fraud in New Jersey, the Plaintiff must prove that (1) NRIA committed fraud which caused an injury at the time of the d defendant assistance; and (3) the defendant knowingly and substantially assisted in the fraud. This Court discussed the requirements of pleading aiding and abetting fraud in the BofA Decision. [BofA Decision, pp. 13-18].
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The Complaint easily satisfies the first element of the aiding and abetting analysis because with detailed facts. [ECF No. 1, ¶¶ 33-72]. As to the
knowledge requirement, the Plaintiff allegations include:
Allegations that Valley did not follow proper procedures, conduct due diligence, and investigate red flags might support a claim that Valley should have been aware of the fraud occurring at NRIA. However, standing alone, they are insufficient to support the allegation that Valley had actual knowledge of the alleged fraud.
But, the Complaint also alleges that suspicious activities took place in Valley account which suggests that Valley may have had some
In January 2020, before NRIA began banking with Valley, Valley
of funds being deposited in his personal accounts. While Grabato was making over $380,000 in
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deposits, he only substantiated $220,000 as his annual salary at NRIA. [ECF No. 1, ¶ 88-91]. This account and that Also,
the Complaint alleges instances of suspicious deposits in the NRIA accounts at Valley. NRIA principals advised Valley that its accounts ending in x7560 and x7579 would receive approximately $200,000 in deposits each month, but in their first months, x7560 received $24 million and x7579 received $4.5 million. [ECF No. 1, ¶¶ 117-18].
Moreover
and the NRIA accounts at Valley. The Complaint alleges that Grabato used funds transferred by
NRIA
30, 2021, which was after Salzano was arrested. Then, on July 1, 2021, Grabato wrote a check for -
name. [ECF No. 1, ¶ 126].
Other compelling allegations concern events in October 2021 when the Vice closing all NRIA accounts. This allows the Court to infer that Valley was scrutinizing the account activity and found something wrong. Even so, Valley allowed the accounts to remain open into Valley allowed $24.3 million of Investor funds
to flow through the bank. [ECF No. 1, ¶¶ 155-63].
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More accounts at Valley, including consequential activity that occurred after Valley noticed the accounts for closure on October 28, 2021, but kept them open. Lines 97 through 108 of Exhibit A to the Complaint show a slew of extraordinary transactions totaling several hundreds of thousands of dollars from NRIA to Grabato and from Grabato to insiders and family members. [ECF No. 1-1, p. 3 of 4].
personal Valley account ending in x7667 between October 4, 2021 and December 3, 2021. [ECF No. 1, ¶ 124]. As stated above, Grabato had previously reported to Valley that his NRIA salary was $220,000, which is substantially less than the transfer. [ECF No. 1, ¶ 124]. Also, Grabato -wife Jamie
Samul from August 2021 to November 2021 totaling $60,000. The transfer from the fourth check was made on November 2, 2021. [ECF No. 1-1, p. 3 of 4]. On October 18, 2021, $600,000 was moved from
in x7667. [ECF No. 1-1, p. 3 of 4, Transfer #93].
had a balance of $41,000. [ECF No. 1, ¶ 128]. Grabato then wrote four checks to himself totaling $350,000 on November 1 and November 2, 2021. [ECF No. 1-1, p. 3 of 4]. Then, on November 9, 2021, Grabato wrote a check for $20,000 to his ex-wife Georginette Cleofe. [ECF No. 1-1, p. 3 of
4].
insiders. [ECF No. 1, ¶¶ 123-29]. The above allegations by the Plaintiff support a reasonable inference that Valley may have The Plaintiff will have to prove that Valley learned that NRIA
was engaged in fraudulent activities and decided to overlook them because of the benefits derived
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e opportunity to do so. Next, the Court must consider whether the pleadings provide enough information for the Court to infer substantial assistance of the fraud. [BofA Decision, pp. 17-18]. The Plaintiff alleged that Valley substantially assisted in the fraud committed by NRIA as follows:
-
2, p. 26 of 37]. However, Valley arguably engaged in services that were beyond standard when it granted the account exceptions described above and kept NRIA accounts open after flagging them for closure. [BofA Decision, pp. 17-18]. For these reasons, the Plaintiff adequately pled that Valley A claim for aiding and abetting breach of fiduciary duty is similar to a claim of aiding and abetting fraud but also requires conduct constituted a breach
of fiduciary duty and gave substantial assistance or encouragement to the other in committing that
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Bd. Of Trs. of Teamsters Local 863 Pension Fund v. Foodtown, Inc., 296 F.3d 164, 174 (3d Cir. 2002) (citations omitted).
As in the BofA Decision, the first prong of aiding and abetting is satisfied because the -07].
The question is whether the Plaintiff sufficiently pled that Valley had knowledge that NRIA was breaching its fiduciary duty to Investors. As set forth in the previous section, the Plaintiff alleges that there were instances during
special scrutiny. Additionally, the Pla
breach of fiduciary duty through the daily Positive Pay System Notifications, review of accounts that were flagged for closure, and
demonstrating extraordinary transfers both before and after the NRIA account was flagged for closure. [ECF No. 1, ¶¶ 123-29, 138-41]. With this information, it is reasonable to infer that Valley learned that NRIA was moving funds between accounts at the bank in violation of its duties to Investors.
described above, also demonstrate
duty. Therefore, the Plaintiff sufficiently pled aiding and abetting breach of fiduciary duty. Count Three will not be dismissed.
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Like in the BofA Case and other related NRIA adversary proceedings, the Complaint did not make any allegations that Valley represented NRIA directly in the sale of securities.4The Plaintiff did not adequately plead that Valley aided and abetted securities fraud and Count Two of the Complaint will be dismissed.
The Complaint seeks recovery of actual fraudulent transfers to Valley under § 548(a)(1)(A) of the Bankruptcy Code (Count Four) and under New Jersey law (Count Six). Here, the Plaintiff alleges that the fraudulent transfers from NRIA to Valley include banking and management fees in the two years preceding the bankruptcy in the amount of approximately $5,000. [ECF No. 1, ¶¶ 216-17]. The Plaintiff states that these transfers of fees to Valley were made in furtherance of the Ponzi scheme. [ECF No. 1, ¶ 220]. As set forth in the BofA Decision, the Ponzi scheme presumption applies because the Plaintiff alleges that NRIA was conducting a Ponzi scheme and that the fees paid to Valley were in furtherance of the Ponzi scheme. The actual fraudulent transfer claims in Counts Four and Six will not be dismissed.
The Plaintiff also brings claims for constructive fraudulent transfers under the Bankruptcy Code (Count Five) and New Jersey law (Count Seven). Section 548(a)(1)(B) of the Bankruptcy Code provides that transfers may be avoided if the Debtors received less than reasonably
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equivalent value in return for the transfer while the Debtors were insolvent. See also N.J.S.A. § 25:2-25(a)(2) and 25:2-
paid to and refers to the fees in the two years preceding the bankruptcy in the amount of approximately $5,000. [ECF No. 1, ¶¶ 225-26, 243-44]. There is no allegation that these fees were unreasonable, or more than fees
constructive fraudulent transfers in Counts Five and Seven are dismissed. The Plaintiff seeks to recover and preserve the allegedly avoidable transfers under 11 U.S.C. §§ 550 and 551, and/or applicable state law for the transfers in Counts Four through Seven. The Court has dismissed Counts Five and Seven but Counts Four and Six have not been dismissed. The claims for recovery and preservation of the avoided transfers in Counts Four and Six will not be dismissed.
In the BofA Decision, the Court found that Plaintiff adequately alleged facts demonstrating that NRIA committed conversion of Investor funds. Particularly, the Court determined in the BofA Decision that the Plaintiff demonstrated that the bank advised Dustin Salzano to add a DBA name to the account for a specific property, which drew the b
account was being used to make payments for purposes other than that property. This is a specific allegation that showed that BofA may have aided and abetted conversion of Investor property. [BofA Decision, pp. 24-25].
But unlike in the BofA Decision, the Plaintiff here did not adequately allege facts demonstrating Valley had knowledge that NRIA engaged in the conversion of Investor funds or
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provide substantial assistance. While there may be a similar conversion claim here, it is not specifically laid out by the Plaintiff in Count Ten.
conversion in Count Ten is dismissed but the Plaintif
In Count Eleven of the Complaint, the Plaintiff alleges that Valley was unjustly enriched. As found in the BofA Decision, the Plaintiff suggests that retention of banking fees in exchange for providing banking services was unjust. This claim is like the constructive fraudulent conveyance claims above that are being dismissed. Also, retention of the fees paid by prevails on one of its aiding and abetting tort claims,
and New Jersey does not recognize unjust enrichment as an independent tort cause of action. Jurista v. Amerinox Processing Inc., 492 B.R. 707, 754 (D.N.J. 2013) (citation omitted). Count Eleven is dismissed.
As in the BofA Case, Valley has not filed a claim in the NRIA bankruptcy that can be disallowed or equitably subordinated. Therefore, Count Twelve is dismissed without prejudice. If Valley
CONCLUSION
Two, Five, Seven, Ten, Eleven, and Twelve, leave to amend the Complaint under Federal Rule of Civil Procedure 15(a)(2) is fully preserved.