
    Doral Fabrics, Inc., et al., Appellants, v Cheryl Gold, Individually and as Preliminary Executrix of the Estate of Eugene P. Gold, et al., Respondents, et al., Defendants.
    [67 NYS3d 627]
   Order, Supreme Court, New York County (Marcy S. Friedman, J.), entered September 27, 2016, which granted defendants Cheryl Gold and Amy Kaufman Gold’s and UBS AG’s motions to dismiss the complaint as against them, unanimously affirmed, with costs.

The complaint fails to state a cause of action for fraud (see Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 178 [2011]). The first step of the purported fraud, that the decedent, Eugene P. Gold, “diverted” income from plaintiff Barker-Doral Fabrics, Inc., did not constitute fraud; rather, as the complaint alleges elsewhere, it was embezzlement.

The second step of the scheme, the sham loan of the diverted funds to plaintiff Doral Fabrics, Inc., would fulfil the requirements of fraud but for the fact that the decedent was the president and sole shareholder of Doral at the time of the loan; as such, his knowledge is imputed to it (see 546-552 W. 146th St. LLC v Arfa, 54 AD3d 543, 544 [1st Dept 2008], lv dismissed in part, denied in part 12 NY3d 840 [2009]). Thus, Doral cannot have been deceived; it knew that the loan was a sham. Contrary to plaintiffs’ claim, there is record support for defendants’ argument that the decedent was Doral’s sole shareholder at the relevant time.

Because the complaint fails to state a cause of action for fraud, it is not necessary to consider whether the fraud claim is time-barred and whether New York has jurisdiction over defendant UBS.

Concur—Acosta, P.J., Sweeny, Gische, Andrias and Gesmer, JJ.  