A Georgia federal judge has denied Burr & Forman LLP's bid to escape a lawsuit accusing the firm of being party to a massive healthcare fraud scheme, ruling that it must largely face malpractice and breach of fiduciary claims from a pair of bankruptcy trustees.

U.S. District Judge J.P. Boulee said Friday that Burr & Forman and its partner Jennifer Moseley — who were accused of helping the founders of a health benefits company, The Aliera Companies, embezzle millions out of the business — could not rely on the defense that they merely completed the tasks they were hired to do.

"Completion of the task … does not necessarily absolve a defendant of liability where it is alleged that a defendant performed the task without ordinary care, skill and diligence," Judge Boulee said. "In the court's view, it is not completing the task that matters, it is completing the task with the skill and care of a professional under the circumstances."

The judge added that he was "not convinced" by the firm's arguments for dismissing the trustees' breach of fiduciary duty claim, noting that such a duty was explicitly included as part of its engagement letter with the venture.

The order went on to dismiss only two counts in which Burr & Forman was alleged to have aided and abetted such a breach. There, the judge ruled that the defendants were not "strangers" to the alleged scheme and could not be held liable under Georgia law, which allows aiding and abetting claims to be brought only against third parties to an agreement.

Counsel for the parties didn't immediately respond to a request for comment Monday.

First filed over a year ago, the trustees' malpractice suit accused Burr & Forman and Moseley of helping Tim Moses and Shelley Steele, the husband and wife founders of The Aliera Companies Inc., run a multimillion-dollar fraud scheme that charged customers exorbitant fees and denied promised health coverage.

Moses — who the trustees said was a convicted felon — and Steele allegedly used Aliera to take advantage of healthcare sharing ministries, a type of healthcare plan that allowed customers to be exempted from the Affordable Care Act's insurance mandate for individuals. Legislation passed in 2017 effectively repealed the individual mandate.

Aliera allegedly approached one such HCSM, Anabaptist Healthshare, a small nonprofit Mennonite entity in Virginia, to sell plans to unwitting clients. Through their deal with Anabaptist Healthcare, Aliera and subsidiary Unity Healthshare Inc. raked in millions in cash per month while failing to provide promised services.

Burr & Forman, for its part, was accused of helping Moses and Steele set up a series of LLCs through which they allegedly embezzled money out of the business, including to pay off Moses' restitution expenses from a prior fraud conviction.

"Months after these transfers were made, Moseley papered over the transfers by drafting promissory notes from Shelley Steele to Aliera for over $8 million," the trustees said. "Moseley knew, or should have known, that there was no business reason for Aliera to 'loan' [Moses and Steele] over $8 million."

In Friday's ruling, Judge Boulee said that he was unpersuaded by Burr & Forman's argument that its involvement with Aliera and Unity was years before the companies went bankrupt.

"By focusing only on the bankruptcy, defendants invite this court to ignore the other injuries Trinity began suffering almost immediately after its formation," he wrote. "Indeed, plaintiffs alleged in their first amended complaint that weeks after Trinity began conducting business and selling HCSMs, regulatory actions and class action lawsuits were filed against it, resulting in the expenditure of millions of dollars in legal fees and the payment of various fines."

The same went for the firm's argument that the trustees could not bring a breach of fiduciary duty claim because it's duplicative of the malpractice claim, with Judge Boulee writing that "because plaintiffs are permitted to pursue alternative theories of relief, dismissal is not appropriate."

The Aliera Cos. have faced civil and regulatory actions from state agencies, and Moses and Steele were indicted in Travis County, Texas, in 2023 on charges of running an unauthorized insurance business, with charges still pending.

The trustees are represented by Eleanor Hamburger and Richard E. Spoonemore of Sirianni Youtz Spoonemore Hamburger PLLC, Terry Dale Jackson of Terry D. Jackson PC, and Joshua Karsh of Mehri & Skalet PLLC.

Burr & Forman is represented by Jonathan Kaufman and Lawrence Albert Slovensky of King & Spalding LLP.

The case is Luria et al. v. Burr & Forman LLP et al., case number 1:24-cv-03115, in U.S. District Court for the Northern District of Georgia.