By John T. Fakler
South Florida Business Journal
June 16, 2006
Lawyer and author Vince Megna has his own theory of relativity for
legal ethics: Lap dancers don't take checks for a reason. And those
business ethics are sounder than the ones belonging to some
attorneys he knows - particularly one in Miami.
Megna, a lemon law and personal
injury attorney who says he practices "just 377 miles from Detroit,"
is no small fry in the legal arena. He's been recognized as one of
the top 10 lawyers in America by Lawyers Weekly USA, and for his
efforts in consumer advocacy.
He's also championing a national
campaign against lawyers who steal from their clients.
"One of the biggest problems with
lawyers nationally is stealing their clients' trust accounts," he
said, citing a local case, which made headlines again last month
after disbarred Miami attorney Louis S. Robles pleaded not guilty to
federal charges that he defrauded thousands of clients out of $13.5
million in settlement money from asbestos litigation.
Robles, who was disbarred in 2003
after a Florida Bar investigation into his financial practices,
faces 41 counts of mail fraud contained in a grand jury indictment.
The Bar said he took money from his
asbestos clients' trust fund accounts, using the cash for real
estate purchases, personal investments and alimony payments, the
indictment claims. One real estate purchase was a 9,000-square-foot
waterfront mansion on Key Biscayne.
"It's outrageous," Megna said of the
18-page indictment. "He had collected more than $164 million in fees
involving 75,000 settlements. As a lawyer, you hate to see another
lawyer taking such advantage of people - people that need someone on
their side."
The problem of trust account dipping
has gotten so bad, Megna said, that most state bars have set up
funds known as "lawyer thievery accounts" for when lawyers steal
clients' money by writing checks out of their trust accounts.
"At the end of the year, they try
and pay back these accounts from money lawyers contribute into this
account," he said.
"We do have a fund like that," said
Francine Walker, The Florida Bar's public information officer. The
Bar's Client Security Fund is funded through annual fees paid into
this fund regularly, she said, adding it is currently set up for
individuals, not those involved in class action settlements. "Since
its inception in 1967, the fund has distributed more than $14
million in client reparations."
Compensation for losses
The fund was created to help
compensate people who have suffered loss of money or property due to
misappropriation or embezzlement by an attorney, the Florida Bar's
Web site states.
Megna said he would make the
penalties much stiffer than they are currently.
The premise of his new book, "Lap
Dancers Don't Take Checks," is ethics. He teaches seminar attendees
one common theme: "Don't lie, don't cheat, don't steal - the same
thing we were taught in kindergarten and first grade."
Megna says the message is very basic
- and much needed in the legal profession.
"When you receive a settlement in
the case, that's your clients settlement. That sits in a trust
account until it is dispersed to the client."
Typically, the attorney will take
out his fee of one-third plus costs. Anything more is cause for
suspicion, he said.
And what is Megna's brand of justice
for philandering lawyers?
"I would take their license away
immediately, even if they did it one time," he said.
Disbarred
Litigator Faces Life in Prison
After 41-Count Indictment, Denies Charges
By Julie Kay
Daily Business Review
New York Lawyer
May 24, 2006
MIAMI -- Louis Robles, a
once-prominent Miami plaintiffs attorney, pleaded not guilty Tuesday
to 41 federal counts of mail fraud and misappropriating $13.5
million in settlements from asbestos clients.
Robles, who was indicted
Tuesday, was assigned Assistant Federal Public Defender Hector
Flores to represent him at his initial appearance before U.S.
Magistrate Judge Stephen T. Brown in Miami. Brown made the
assignment after Robles said he was unable to come up with
additional funds to pay his former attorney, Roy Black of Miami. It
was disclosed in court that Robles already paid Black a $100,000
retainer.
Brown set his bond at $1.25
million, including a $250,000 corporate surety bond and a $1 million
personal bond guaranteed by his daughter. He would only have to put
up 15 percent of the corporate security bond in cash.
It was unclear at deadline
Tuesday afternoon whether or when Robles would be able to post the
bond.
The indictment comes almost
three years after the Daily Business Review first reported that a
federal grand jury was impaneled to look into the Robles case.
Robles, expecting an
arrest, surprised prosecutors by surrendering to federal authorities
late Monday. He was held at the Federal Detention Center in Miami.
Handcuffed to other
defendants and dressed in prison garb, Robles appeared calm and in
good spirits at the hearing Tuesday, smiling and greeting his public
defender with a grin and a handshake.
Robles, 58, could face life
in prison if convicted of all counts, according to U.S. Attorney
Alex Acosta. The indictment also contains a criminal forfeiture
provision seeking a judgment for $13.5 million, to be used to
compensate his former clients.
U.S. District Judge Alan
Gold issued orders late Monday freezing two of Robles' bank accounts
and two investment accounts. Prosecutors say they do not yet know
how much is in the accounts.
Assistant U.S. Attorney
Chuck Duross told Brown that he is concerned about withdrawals made
by Robles in the past few weeks, including $141,000 he gave to his
girlfriend and $500,000 he withdrew April 6. Robles also paid
Greenberg Traurig, his civil attorneys, $120,000, and Roy Black
$100,000.
When Brown asked when he
last worked, Robles replied Dec. 31, 2002. He answered 'no' when
asked whether he owns any cars or trucks or has access to any
financial assets.
Allegations
According to the
indictment, Robles used client trust money to finance movie
productions and waste management companies, lease apartments in New
York and Los Angeles, make mortgage payments on a $15 million Key
Biscayne, Fla., mansion and a Colorado condominium and pay alimony.
More than 7,000 asbestos
clients, many of them old, poor and sick with asbestos disease, were
victims of Robles' greed, prosecutors say. Many got no settlements
or were charged exorbitant costs by Robles, prosecutors contend.
The Florida Bar disbarred
Robles in 2003 after a four-year investigation prompted by client
complaints. He had abruptly closed his downtown Miami law firm in
2002. The indictment caps a spectacular fall for one of country's
highest-profile class action and mass tort lawyers. His firm had
12,000 clients across the country.
Just a few years ago,
Robles ran ads on national television and signed up thousands of
asbestos clients around the country. By 1999, his downtown Miami law
firm, The Robles Law Center, had 120 employees.
Robles eventually recruited
12,000 clients nationwide, becoming one of the busiest class action
and mass torts lawyers in South Florida. He handled some
high-profile class action cases.
He sued residential
developer Lennar Corp. after Hurricane Andrew ravaged southern
Miami-Dade County in 1992, accusing the builder of shoddy
construction. And he spearheaded litigation against NationsBank on
behalf of Miami-Dade County Commissioner Barbara Carey-Schuler, who
contended the bank engaged in racially discriminatory lending
practices.
"This was one of the main
firms in South Florida for dealing with class action and large
injury cases," said John Ruiz, a Miami class action attorney. "They
were known for having a stellar reputation and good lawyers."
Robles lived lavishly. He
owned a Key Biscayne mansion, 33 acres of undeveloped land in
Telluride, Colo., valued at $4.5 million and a Telluride condominium
valued at $1.2 million. He had two full-time servants to care for
his property, according to bankruptcy court records. His salary in
2001 was $2.7 million.
The Unraveling
Things began to unravel for
Robles in 1998, when The Florida Bar started getting complaints
about Robles and began an investigation. His wife, Ruth Ann,
divorced him a year later. Then his partner, star litigator Ervin
Gonzalez, left his firm in 2000 to join Colson Hicks Eidson in Coral
Gables.
The Bar accused Robles of
stealing $800,000 from a trust fund, overcharging thousands of
asbestos clients costs and contingency fees of more than 50 percent
without notifying them and paying many clients unusually low
settlements.
Some Robles clients later
told investigators they were shocked to receive bills from Robles
for airfare, food, phone bills and other costs that were never
disclosed to them. Robles' then-attorney, Nicholas Friedman,
vigorously denied the charges and said his client simply lacked the
funds to continue fighting the Bar. In November 2002, Robles
abruptly closed his law firm, dismissing all his employees.
In May 2003, the Florida
Supreme Court disbarred Robles. Shortly thereafter, Robles filed for
bankruptcy.
Chief Miami-Dade Judge
Joseph P. Farina Jr. assigned C. Thomas Tew, of Tew Cardenas in
Miami, as inventory attorney and ordered him to go through thousands
of case files and medical records which Robles dumped on the floor
of a warehouse.
Tew,
in a scathing report to the court, accused Robles of charging his
clients $30 million in unreasonable or impermissible costs and $11.6
million in questionable costs.
The case apparently kicked
into high gear in the past few months, under the supervision of
Duross, the newly named deputy chief of major crimes in the U.S.
Attorney's Office in Miami.
At the same time, the
bankruptcy case has chugged along. Robles, despite all his legal
woes, was still living well last year, according to bankruptcy court
records. He estimated his monthly expenses at $123,000, including
$60,000 in mortgage payments, $50,000 in monthly alimony payments,
$1,270 in grooming and entertainment, and $6,000 in home
maintenance. He put his Telluride properties in his daughter's name.
Bankruptcy trustee Drew
Dillworth tried to block Robles from claiming a full homestead
exemption for his waterfront Key Biscayne house. But the 3rd
District Court of Appeal ruled that Robles is entitled to the
exemption.
Robles sold the house last
July for $12.9 million -- the third-highest amount paid for a house
on the posh island.
Tew
has been pressing The Florida Bar to release a $13.5 million lump
sum payment from its Client Compensation Fund to compensate Robles'
alleged victims, but the Bar has insisted that each client must
apply individually.
Reacting to the indictment,
Tew, who attended the hearing Tuesday, said: "What I really hope is
this will act as a wake-up call to The Florida Bar. He has committed
a decade of theft."
Flashy Lawyer Accused of Swindling His Clients
A Personal Injury
Lawyer Faces Charges He Took More than
$13 Million from the Clients He Represented for Asbestos Exposure
By Jay Weaver
The Miami Herald
May 23, 2006
A victim of pulmonary
fibrosis who says his lawyer never paid him his share of $16,000
Big-time lawyer Louis S.
Robles could have starred in Lifestyles of the Rich & Famous
-- then, poof, he was disbarred, divorced and forced to sell his Key
Biscayne mansion.
On Monday afternoon,
Robles' life went from bad to worse when he unexpectedly surrendered
to federal authorities on charges of swindling more than $13 million
from some 4,500 aging law clients ailing from asbestos exposure.
It was a calculated move on
his part because the FBI was planning to arrest him early this
morning at his downscale Key Biscayne apartment, following a federal
grand jury indictment issued under seal this month.
Robles, 58, spent the night
in the Miami Federal Detention Center and is expected to have his
first appearance today in U.S. District Court. His lawyer, Roy
Black, could not be reached for comment late Monday.
If convicted, the ex-lawyer
could face up to 15 years in prison and would have to forfeit to the
federal government whatever money he has left from the alleged
theft. The U.S. Attorney's Office has already made a legal move to
freeze all of his bank assets from the sale of his home -- more than
$1 million.
Robles, once dubbed the
''king of torts'' for his high-flying personal-injury practice, came
under scrutiny of federal prosecutors in 2003 after the Florida Bar
found he had committed serious wrongdoing. Among his violations:
pilfering his clients' damage settlements and orchestrating a Ponzi
scheme in which he used new settlements to pay part of the old ones.
He also overbilled fees and expenses to those clients.
The Florida Supreme Court
then yanked his law license.
An indictment returned May
11 by a Miami federal grand jury alleges that after Robles reached
settlements with various asbestos manufacturers, he would deposit
the payouts in his trust account and then steal them, instead of
mailing them to his clients as promised. The indictment charges
Robles with 40 counts of mail and wire fraud.
Prosecutors say there were
more than 4,000 asbestos clients victimized by Robles from 1992
until 2002. They are scattered from South Florida to the Midwest and
West Coast.
Among the alleged victims:
Jerry Fredrickson of Wisconsin, a commercial carpenter who was
forced to retire in 1990 because of longtime exposure to asbestos, a
fireproofing material that causes lung disease. After a medical
diagnosis five years later, he asked Robles to represent him in a
lawsuit.
Despite several attempts to
reach the lawyer, Fredrickson said he never actually talked with
Robles, even after reaching settlements totaling $16,000 with
several asbestos manufacturers. He was supposed to get two-thirds
and Robles one-third of the payout.
Fredrickson, who suffers
from pulmonary fibrosis and other ailments, said he was thrilled
that justice had finally caught up with Robles.
''I hope he's going to get
plenty of time for taking money from all his clients,'' Fredrickson,
70, said in a phone interview Monday. ``I hope they throw the key
away so he's never released.''
Fredrickson and the other
asbestos clients who claim they were wronged by Robles might be able
to recover some of their settlements through the federal criminal
prosecution if Robles is convicted and then required to pay
restitution at his sentencing.
But it's unclear how much
money the once-flashy lawyer has available.
He sold his Key Biscayne
waterfront mansion for $12.9 million in 2005, but he owed heavy
mortgages on the property.
He might have more than $1
million left in the bank. He also owed $3.5 million to his ex-wife
in a 2000 divorce settlement, though she has not received any money.
Robles shut down his legal
empire in October 2002 because, he said, he could no longer carry
the long-term costs of handling more than 10,000 asbestos,
pharmaceutical, breast-implant and other personal-injury cases.
Several of the asbestos
manufacturers, burdened with lawsuits nationwide, have filed for
bankruptcy.
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Ex-lawyer's
Files Detail Theft, Civil Report Says
A Disbarred Miami Attorney Faces Fresh Malpractice
Allegations in a New Civil Report on His Firm's
Meltdown.
Meanwhile, a Federal Grand Jury Weighs Criminal
Charges
By Jay Weaver
Miami Herald
November 25, 2003
A disbarred
lawyer who once was one of Miami's top personal-injury
attorneys tried ''to mask his theft'' of $13.5 million
from thousands of asbestos clients by charging
millions in ''questionable'' expenses, according to a
civil report filed in Miami-Dade Circuit Court.
Former
attorney Louis S. Robles, 56, who abruptly closed his
office a year ago, left behind computer records that
have allowed a court-appointed lawyer to sort out the
settlement payments owed to former clients and the
expenses billed to them.
Robles also
left behind a mountain of case files -- along with
some 40,000 client X-rays -- in ''total disarray'' at
a warehouse, said Thomas Tew, the court-appointed
lawyer, on Monday.
Tew and his
legal team have granted access to those records to
federal investigators, who have convened a grand jury
to determine whether Robles may have committed a crime
for allegedly withholding settlements from clients and
overcharging them for expenses, according to the
report.
Tew declined
to comment on the U.S. attorney's probe. But fees
requested by Tew for his role as inventory attorney
show that he has shared records with federal
authorities:
•• ``Review
[of] records and systems with assistant U.S. attorney
and FBI agents.''
•• ``Calls
from and calls to the assistant U.S. attorney
regarding interviews and grand jury subpoenas.''
•• ``Call to
AUSA and conference with counsel for Robles regarding
response to grand jury subpoenas.''
A spokesman
for the U.S. attorney's office, Matthew Dates,
declined comment.
Robles'
criminal attorney, Roy Black, did not return a call to
his office. Nor did Robles' civil lawyer, Alan Dimond,
a past president of the Florida Bar Association.
Civil lawyer
William Huggett, who also represents Robles, said he
could not comment on the report, because he had not
read it.
ASSIGNED TO
CASE
Tew was
assigned to get a handle on Robles' cases after the
so-called ''king of torts'' shut down his business.
That decision came after a Florida Bar complaint
alleged that he overcharged his asbestos clients and
misappropriated about $803,000 from about 300 of them.
The Florida Bar took away his license in May.
Tew said the
Bar's investigation was a ''snapshot'' of Robles'
misconduct, alleging in his report that Robles
retroactively billed a total of $12.1 million for
computer-related costs and another $6.15 million for
interest on the firm's out-of-pocket expenses.
Tew said the
computer costs were posted October 2002 but were made
retroactive to 1989, according to the Robles firm's
own records. That, in turn, boosted the total interest
Robles charged clients for his firm's expenses.
Tew's civil
report, filed Monday with Miami-Dade Circuit Judge
Joseph Farina, paints a critical picture of Robles'
legal empire, which once included more than 7,000
asbestos clients and 8,000 clients with
breast-implant, pharmaceutical and other
personal-injury suits.
If the judge
approves Tew's report, it would lay the groundwork for
how he and other lawyers proceed with Robles' former
cases.
Tew -- aided
by a legal forensic team, including his
lawyer-brother, Jeffrey, and lawyer-accountant Marta
Alfonso -- had to reorganize all of the Robles firm's
case files, X-rays and other client records to
reassign them to other firms.
His firm, Tew
Cardenas, with permission from clients, took over
about half the asbestos cases.
''A lot of
people are fed up with the system,'' Tew said.
``They've given up hope. I'm trying to keep the cases
alive.''
Tew said he
wants to file a class-action case on behalf of Robles'
former clients, alleging malpractice, cost overcharges
and unpaid settlements.
PERSONAL
STORY
One of
Robles' asbestos clients, Tom Frazier of Hollywood,
said he has signed up with Tew's firm to recover
unpaid and future settlements. Frazier, 65, who lives
in a warehouse on Social Security, said he's still
stung by Robles' alleged theft.
'Why take all
these customers' money due to them and run away with
it?'' Frazier said. ``That's not right. I hope they
put him away for a while.''
Robles,
meanwhile, is waiting out his legal troubles at his
Key Biscayne mansion, which he tried to sell at
auction in March but got no bids. He has had it on the
market for as much as $15 million.
He also owes
his ex-wife, Ruth Ann, $3.5 million from their divorce
settlement.
Said her
attorney, Andy Leinoff: ``He is not paying her a
dime.''
New Lawyer Says
'King of Torts' May Have Kept Money
By Jay Weaver
Miami Herald
April 18, 2003
Tom Frazier
says his lungs are so bad that he feels like he's having
a heart attack when he leans over to tie his shoes.
The reason:
asbestos damage from decades of crafting particle-board
cabinets.
In 1999, the
64-year-old Hollywood man turned to high-profile
attorney Louis Robles to sue asbestos manufacturers --
and won several settlements. But Frazier said he never
saw a cent.
He was not
alone. Robles, known as Miami's ''King of Torts,''
represented more than 7,000 asbestos victims across the
nation, and he may have kept as much as $13.5 million in
settlements owed to them, according to court documents
and Robles' business records.
''I'm the one
who's suffering; he's not suffering,'' said Frazier, who
lives in a warehouse and collects scrap metal and Social
Security to make ends meet. Robles, he noted, resides in
a Key Biscayne waterfront mansion recently listed for
$7.5 million.
Robles' law
firm is out of business, and a state judge has appointed
Miami attorney Thomas Tew to take over thousands of his
open asbestos cases.
''It's a sad
day in the legal process for these [asbestos] victims,''
said Tew, whose legal team, including brother Jeffrey
Tew and accountant Marta Alfonso, has worked nonstop on
the case since February. ``The bottom line is, the legal
process has ended up costing these people years out of
their lives.''
It will cost
Robles, 55, his law license.
Two months ago,
the Florida Supreme Court issued an emergency suspension
of Robles after the Florida Bar accused him of
''misappropriating'' at least $800,000 from about 300
asbestos clients in 2001 and overbilling them by
potentially millions of dollars.
The Bar's
charges were based on only a portion of Robles' client
accounts. Tew's legal team examined the Robles firm's
computer records of 7,085 asbestos clients from 1989 to
2002. During that period, the law firm collected a total
of $198.5 million in settlements.
Tew found that
Robles paid out more than $81 million to some clients --
mostly before many of the asbestos companies filed for
bankruptcy protection in the mid-1990s.
In addition,
Robles' firm took another $104 million from settlements
for attorney fees and legal expenses, such as court
costs, medical exams and expert witnesses. That left
$13.5 million, which was supposed to be dispersed to
ailing clients, Tew said.
`HONEST
MISTAKES'
Robles' civil
attorney, Nicholas Friedman, said the suspended lawyer
did not want to comment. In the past, Friedman said
Robles has made ''some honest mistakes,'' but he never
ripped off his clients' settlements.
Friedman said
Robles' law firm ran into trouble covering its legal
costs in recent years because of the asbestos industry's
bankruptcies. So Robles used settlement money for his
expenses, which he was entitled to do, Friedman said.
He said the
Robles firm's total fees and charges never exceeded half
of the settlements collected from asbestos companies,
which he added is consistent with the national average
among personal-injury lawyers.
Tew said his
computer analysis called into question Friedman's claim.
Tew said Robles' firm kept at least 60 percent of all
collected settlements during the past decade to cover
legal costs.
In February,
the Florida Bar told the Supreme Court that Robles, who
refused to turn over some records, ''represented a clear
and present danger to the public.'' The Bar cited
misappropriation of funds and questionable legal
charges, including an in-house computer company that
billed clients for record-keeping.
Tew's team,
which reviewed all of Robles' business records, was able
to put a figure to the computer company's billings --
$10 million. Tew said such a charge would normally come
out of a law firm's overhead budget.
Tew said that
as some asbestos companies emerge from bankruptcy
protection, they should be in a position to make good on
part or all of the settlements owed to Robles' clients.
But it is uncertain how much each one would receive.
In court
papers, Tew has asked Miami-Dade Circuit Judge Joseph
Farina to determine which of Robles' legal expenses and
fees were acceptable.
FROZEN
ASSETS
Meanwhile, the
Bar has asked the Supreme Court to unfreeze the law
firm's frozen assets, now totaling $145,000, so Tew can
start to pay some asbestos clients. He said thousands of
Robles' clients have been waiting years to see all of
their settlement money.
Among them:
Robert Shrote, 66, who lives in Northwest Miami-Dade
County. Shrote has received $19,103 in payments from
Robles' firm, but he said he's owed thousands more.
His caretaker,
former wife Gloria Shrote, said he struggles to get by
on his Social Security and union pension benefits.
''He's coughing
something terrible,'' she said. ``Each year, it puts
more wear and tear on his lungs.''
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