Things That Make You Go "Hmmm."

Let's see....wake up South Florida!

John Pacenti is a fantastic reporter, and I've certainly had my fun with Big Lew, but I sort of agree with Joe DeMaria regarding the Lew Freeman emails that appear on the front page of today's DBR.

They're entertaining as you would expect -- and naturally involve food and bowel movements -- but where's the newsworthiness?

They seem private to me and I feel somewhat uneasy reading them.  That doesn't mean they shouldn't be published if there's some larger point to them, but I guess I'm not seeing it at the moment.

Or maybe I'm missing something -- what do you all think?

Other exciting news -- the guy in charge of handling US renditions to Egypt is now Mubarak's new VP -- that definitely makes me go "hmmm."  And even Dr. Zhivago says it is time for regime change.

Hmmm.

But this is my favorite "hmmm" moment of the morning (from today's DBR but not online):

Robert C. Josefsberg, a partner with Podhurst Orseck in Miami, has been named to the steering committee in the Chinese Drywall multidistrict litigation in New Orleans, replacing outgoing partner Victor Diaz.

Double hmmm.

Bring Back Lew Freeman!

I have noticed a distinct decline in interesting metaphors and wild analogies since Lew Freeman went to jail.

For example, bad karma is catching up with David J. Stern, but look at how his attorney Jeff Tew responds to it all:

The whistleblower's testimony, released last week, is a jarring account alleging widespread fraud and criminal activity at the law firm. Tammie Lou Kapusta, a one-time paralegal at Stern's office, detailed a corporate environment where tampering documents and forging signatures were normal practices, endorsed by high-level executives.

``They wanted us to start changing the documents and stuff and doing stuff that we weren't supposed to be doing as far as service,'' Kapusta told McCollum's staff.

Jeffrey Tew, lawyer for Stern's law office, has dismissed Kapusta's testimony as categorically false.

``It's not true what she says,'' he said. ``She was terminated for cause. It sounds like a cliché but it's a disgruntled employee out for revenge.''

Jeff, you've given us some tear-welling prose before, but this time you're right -- it does sound exactly like a cliché.

 

But I know how Big Lew would have handled this.

 

Lew would have pulled out a spectacular, mind-blowing nautical analogy, like:

 

"She's like the iceberg on the Titanic, and we're all going down with the ship"!

Or

"That woman is like a bad meatball sub -- she keeps repeating on you the next day."

Or

“There’s so much backed up that when it comes out we are going to need hip boots.  It’s going to stink, and it’s going to be deep.”

Wait a minute on that last one -- Lew actually said that.

Rhetoric Taken......To New Heights!

New Heights Order

Good....morning!

I had every intention to start the week with something mild and noncontroversial, such as creating a basic Lew Freeman letter generator.

But then that danged case keeps dragging me back in:

The Court finds it quite remarkable, and quite indicative of the merits (or lack thereof) of plaintiffs allegations in this regard, that despite the fact that plaintiffs have filed some 36 motions for enlargement of time, none was filed for responding to the Order to Show Cause ... nor was there a motion for additional pages ... nor was there a motion to take depositions before the matter was briefed. This takes rhetoric to new heights!

I don't know about you, and I certainly don't want to contradict the Judge, but I think I've seen higher rhetoric.

3d DCA Watch -- The Continuing Story of BDO Seidman

Well it feels good to be back in the saddle again.

Three things I learned from my recent "unplugging":

1. Working a matter up for trial is hard.

2. There are too many distractions in the day, and it felt clarifying to be able to focus for extended periods of time on a single topic or issue, without answering phone calls, continually looking at emails, or incessantly surfing the tubes for Drew Barrymore updates.

3. Oy with this Sultan of Brunei.

Speaking of Resplendently Robed Ones™, let's dig right in and see what written utterances have emerged from our very own sometimes blinkered, always bunkered band of A-Team judicial misfits:

BDO Seidman v. Banco Espirito:

It's nice to see the 3d DCA pick up some steady work.

Here, that work consists of regularly passing on various appellate issues that arise from the accounting malpractice trial that has been playing to sold-out audiences before Judge Rodriguez for several years, with no apparent end in sight:

The accounting firm of BDO Seidman, LLP appeals a jury verdict and final judgment awarding the appellees over $159 million in compensatory damages and over $351 million in punitive damages. The appellees—Banco Espirito Santo and two of its affiliates (collectively, “Banco”)—cross-appeal the denial of prejudgment interest on the compensatory award from the date the losses allegedly occurred through the date of the jury verdict. We reverse the final judgment and remand the case for a new trial, finding that the “trifurcation” of the trial into three distinct phases impermissibly allowed the jury to render a verdict on BDO’s liability for gross negligence (a determination pertinent in this case as a predicate for the later consideration of punitive damages)1 two months before the jury’s consideration of, and verdict deciding, the intertwined issues of causation, reliance, and comparative fault.

Because of the prejudice inherent in the premature, first-phase gross negligence finding, we do not address in detail other aspects of the trial. Our conclusion regarding the “trifurcation” issue renders moot or pretermits our consideration of most of the other parts of the jury’s verdicts and the remaining points on appeal and cross-appeal.

I once had trifurcated premature, first-phase gross pretermittal -- once.

(It may have been the six Gin Gibsons, I'm not sure.)

Actually, reading Judge Salter's clear, concise, calm opinion, it's amazing anyone could have thought otherwise. Here's the nub of it:

The trial court ultimately determined that comparative fault and causation issues would be tried and determined in the second, compensatory damages phase rather than in the first phase. The question of whether BDO was “personally guilty of gross negligence” would be determined in the first phase. The jury would then be asked at the close of phase II whether Banco was entitled to punitive damages against BDO (and if so, the amount of those punitive damages would be determined in phase III). This meant that the phase I jury deliberation regarding negligence and gross negligence did not include specific evaluations of the alleged negligence and fault, including failures to report or act, on the part of the Banco parties and ten third-party or Fabre actors. Those determinations occurred instead at the close of phase II, when all of the evidence in that phase was viewed against the backdrop that BDO had already been found not merely negligent, but so negligent (or “guilty”) as to arise to the level of intentional disregard for the rights of others.

This makes eminent sense, though that means they have to do it all over again (presumably without Big Lew Freeman).

Judge Salter at the end is sympathetic to a case that has dragged on for years, consumed seven months of trial time and has resulted in one mistrial already, but he ultimately concludes that the "cart cannot lead the horse," which either was the title of an old episode of Little House on the Prairie or else is judicial-speak for "enjoy the retrial."

I guess for the 37 firms involved, that's a good thing?

Insert Favorite Nautical Disaster Imagery Here.

Wow, I mean this is like the Good Ship Lollipop after sustaining a direct hit from a Japanese Tsurugi in Leyte Gulf (hey, I wanted to stretch a little):

"It is a sad day when one who held our trust for so many years is shown to have engaged in rampant fraud and betrayed the trust of so many,'' U.S. Attorney Jeffrey Sloman said at a news conference.

"This is a classic case of how greed and corruption can corrupt a person at the top of his game,'' said John Gillies, the FBI's special agent in charge, who called Freeman "the wolf protecting the hen house.''

Wolf protecting the hen house....interesting but Lew could have done better.

All kidding aside, this one's a shocker and it is indeed a sad day for anyone who has worked with Lew and his many fine employees.

UPDATE: Here's the information filed against Lew (including allegations against "Co-Conspirators A and B"):

LewFreemanInformation

Do You Want To Own A Piece of Lew Freeman?

Two independent facts confirm in my mind that it's great to be a lawyer -- (1) an apparent lawyer is suing Twitter on behalf of Levi Johnston; and (2) Governor Crist appointed Scott Rothstein to be on the 4th DCA Judicial Nominating Commission.

These are end times, peoples.

Speaking of Scott, no one could be more thrilled by the timing and intensity of the media coverage than The Metaphor Man, Lew Freeman.

While everyone has been busy discussing Scott's gadgets, over-the-top luxury items, and a secretive lair right out of an old Bond movie, Lew has been quietly trying to get things straight.

For example, Freeman dismissed the ill-advised tax suit against the U.S. government.

(Probably should not have filed it in the first place).

And Lew's possessions just went on the auction block, including artwork of W.C. Fields, Groucho Marx, Charlie Chaplin, and George Burns.

You can see an inventory list here.

Now say what you want, but there is no question Lew has much better taste than ole' Scotty boy, who needed to own at least seven overpriced watches.

Lew, on the other hand, had framed Caddyshack and Boston Legal posters and a letter from Sam Ervin.

Score one for Lew!

Two Phrases That Do Not Belong Together -- "Lew Freeman" and "Taint Team"

Hi folks!

So the kids are home, but the judges and lawyers are not (I can tell from all those ECF filing notices), which means we all have to work today.

First off -- did anyone catch Shakira's performance on Saturday Night Live?

It was a bit of a mixed bag, in that I couldn't believe a member of her band was actually playing a Keytar (a fancy new version btw), and yet --criminally -- the Keytarist was not allowed to deliver a mindblowing, gesture-filled epic guitarlike solo! What the hail?

Still, baby steps, baby steps.

I've decided to take it easy on my friend Lew, as I hope he makes it through this FBI process ok.

But given Lew's history with certain sewage-related metaphors, I'm not certain we want to go there:

"If you're going to go into a lawyer's office, it's got to be vetted and approved by someone up the chain," says Troutman Sanders partner Roscoe Howard, Jr., a former U.S. attorney for the District of Columbia, who is not involved in the case. "It's in the U.S. attorney's manual and the big concern is not really the documents you're looking for, but those that you're not looking for and come across that are privileged."

After a judge approves a search warrant on a lawyer's office, Howard explains, a neutral "taint team" from Main Justice reviews the documents seized during the raid to ensure that they address only that which is covered by the search warrant.

So an honest-to-goodness, real life "taint team" has been assembled to review Lew's files?

Oy -- let me think of something pleasant for a minute......come on, come on.....

Got it -- the US has finally opened direct negotiations with MILF.

Longtime MILF fans no doubt will hail this development.

(Wow, that was pretty close there for a minute.)

Lew Freeman's Business Placed In Receivership

Wow, Jordana Mishory reports this shocker:

In a stunning collapse, South Florida attorney and receiver Lewis Freeman went to court today to put his firm out of business and liquidate amid a federal investigation trying to trace $3.6 million from accounts overseen by the firm.

Miami-Dade Circuit Judge Victoria Sigler signed the order to shut down Lewis B. Freeman & Partners and place the firm in receivership under the control of another veteran South Florida receiver, Kenneth A. Welt of Hollywood.

Freeman, a lawyer and forensic accountant, h has often been slected over the years by federal and state judges as a receiver or trustee whenever companies went bust or were plagued by fraud. He did not return a call for comment.

I actually feel bad about this.

It was obvious that the FBI raid effectively ended Lew's receivership practice, as you cannot appoint someone to be a receiver or even an expert who is currently under federal investigation.

And while the full import is unknown of placing his entire business under receivership at the same time the FBI is tracing the firm's expenditures, it's hard to see this as a positive development.

Our thoughts and good wishes go out to Lew and the many professionals we know and respect over at his shop.

Today's Digital Dumptruck

Well, you know I need a steam shovel mama to keep away the dead
I need a dump truck mama to unload my head
She brings me everything and more, and just like I said
Well, if I go down dyin', you know she bound to put a blanket on my bed.

I've got a lot clanging around in my head this morning, and no desire or inclination to organize any of it in a coherent fashion. So let's do this:

1. Did you all hear about the fireworks at the 11th Circuit en banc arguments on Tuesday? Barkett v. Pryor on en banc review of a panel decision that included our very own Judge Altonaga sitting by designation.

The best part? There were even swear words!

It's ok, if you missed the pay per view they will be reairing it on HBO Saturday night, complete with ringside commentary by Jim Lampley.

2. The cute redhead from NBC's Community is an exact doppelganger of the cute redhead from PCU.

3. A followup to the ERISA post from yesterday -- as I mentioned David did a nice job with the 10b-5 arguments, as well as the PSLRA heightened, Iqbal-esque pleading standard.

It's funny now to see corporations who for many years used the PSLRA as a shield are now finding it used against them in the auction-rate security debacle:

The biggest losers so far are corporations that bought the paper but now find they are not covered by settlements some Wall Street firms made to reimburse individual investors. But there are still individuals who are stuck with the securities, either because their brokerage firm refused to settle or because they moved from one firm to another and found that neither firm was willing to reimburse them.

Some of those corporate purchasers may recall the old saying, “Be careful what you ask for. You might get it.” Those buyers of this paper are finding they cannot successfully sue because of a 1995 law that was strongly backed by corporate America as a way to curb frivolous lawsuits.

That law, the Private Securities Litigation Reform Act, says that a case, when filed, must be very specific about the fraud that is alleged, or it will be immediately dismissed. In many cases, a plaintiff would need access to inside information to make such a claim with enough detail. Such information could be there in company files, but the plaintiff has no way to get at it before the case is thrown out.

4. You know what I think of this Lew Freeman story?

This is a Titanic injustice, it's like the FBI wanted to set some sort of transatlantic speed record and just started rearranging deck chairs, and then somebody else called for hip boots and we all somehow wound up stuck in the Twilight Zone.

(Other than that, I have no comment.)

5. I don't know about you, but I am already sick to death of the sudden mania over "sliders."

Everywhere I go I see or hear people talking about "sliders." The 8 Ounce Burger Bar even has a "flight" of sliders -- like scotch but with more grease.

Folks, they are small burgers. You know, like "flat bread" is bread that is flat. That is all.

And there's nothing new about them -- remember Krystal from college, or Royal Castle?

But I guess if you got excited over a smushed piece of bread you're going to go nutso over an extra small burger.

6. I see I am not the only one still thinking about Hitler.

Happy Simcha Torah everybody!

Lew Freeman Officially Retires 'Titanic' Metaphor; Now Trying Out Classic TV References

Everyone by now is familiar with Lew Freeman's love of Titanic metaphors. You can see a few of Lew's greatest Titanic hits here, here and here.

But like any good stand-up or forensic accountant, you got to keep your material fresh.

Making tentative baby steps, Lew recently branched out from the "nautical disaster" metaphor genre and went straight for the popular backed up sewage reference.

Now, no longer satisfied with likening financial fraud to tragedies at sea or massive amounts of bodily waste, Lew has embraced classics from TV's Golden Age:

“It’s one of these bizarre things,” Freeman said. “This involves something I was briefly involved in 10 years ago. I met with the IRS five years ago and I thought this was resolved. That this is coming back now, I feel like this is something from the Twilight Zone.”

I thought for sure once Lew said "[t]hat this is coming back now" we were in for another bowel-movement or possible stomach indigestion reference.

Lew, I think you surprised many of us by going with a high-brow Rod Serling.

Well done, sir.

Your Friday Afternoon Kidney-Selling Rabbi Send-Off

Kidney-selling Rabbis?

Oy, oy, and triple-oy.

And I thought Turistas was far-fetched.

Well I doublechecked and as far as I know, I am not in violation of any trial orders, pleading deadlines, or discovery rules.

Yet.

Before I go, I want to say thank you to Lew Freeman for that great shin-dig the other day -- it was Titanic, buddy.

So let's get the weekend started right, and as per usual I will be engaged in a host of perfunctory and rather mundane activities, such as investigating new cloud-seeding methods in India, discussing an open city manager position in Ft. Myers Beach, and having a nice date with my new 2-D girlfriend.

Actually, I prefer all five dimensions, but then I'm old school.

Stay gold all you legal Ponyboys and have a great weekend!

SFL Monday -- Lew Freeman Wades Into It.

So Reverend Cutie Reverend Cutie Reverend Cutie Reverend Cutie Reverend Cutie everyone!

I'm hesitant to add to the massive amount of digital ink that has been spilled on this slightly overreported story, but I am quite sure the handsome South Beach canoodler is the perfect guy to carry the anti-celibacy message to the new Pope -- who recently restored the pre-Vatican II prayer for conversion of the Jews and also may or may not have been a former Nazi.

Hey, makes sense to me -- I live in Florida!

Anyone still into mortgage fraud? Boy those were the days.

Anyways, I see there has been an update in that odd story I reported on earlier involving UM Law grad Delaila Estefano -- looks like she has been suspended indefinitely pending disposition of the criminal case.

Anyone who knows more on this story, feel free to contact me directly.

Holy hail, look at that -- DBR ace John Pacenti nabbed an exclusive interview with the notoriously media-shy Lew Freeman!

Lew, don't let me down -- I need some screwball metaphors stat! I need some non sequiturs and I need them now! I need one (or two, or three) Titanic references and they better be good:

“We are in the eye of the hurricane. This is the calm,” Freeman said.

Ok, this time he went with a naturally-occuring disaster. What else:

“That’s the trend we are going to see in the future: The superhero of the court system and litigation,” Freeman said.

Superhero? But Lew, they're all ambivalent, conflicted and moody nowadays.

Let's have something classy and high-road to finish up with:

“There’s so much backed up that when it comes out we are going to need hip boots,” he said. “It’s going to stink, and it’s going to be deep.”

"And I'm just talking about breakfast," Freeman added.

Oy -- you may want to revisit the Titanic references there, Lew.

Exclusive -- Bowman Brown Discusses Stanford Case and Lew Freeman References Titanic.

Hold the presses, people.

In a surprise move, Bowman Brown has agreed to discuss the Stanford case in the media:

“This thing has gotten so many hydra-like heads,” said Bowman Brown, an international banking attorney with Shutts & Bowen in Miami who represents Stanford clients.

How in the world did John Pacenti coax Bowman out?

But the metaphors don't stop with Hydra-like anecdotes:

“It’s futile. It’s like suing yourself,” Brown said.

And this:

“This is going to be very complicated, probably more complicated than the Madoff receivership,” Brown said. “This isn’t a slam dunk.”

Amazingly, John was also somehow able to elicit an on-the-record quote from the notoriously press-shy Lew Freeman!

Knowing the metaphors are coming fast and furious, and not to be outdone, Lew returned to his old standby, the sturdy Titanic imagery:

“After the receiver does his investigation, the receiver makes a business judgment that these assets missed getting on the Titanic,” he said.

Respectfully, Lew, there are other nautical disasters besides the Titanic. For example, you could say, "this whole Stanford thing is like going to bed at night and winding up on the Andrea Doria."

Or, "an investor at this point has to feel like he booked a round trip ticket on the Lusitania."

Oh it's going to be a great week!

Unshackled Lew Freeman Continues Rampage of Titanic/Madoff Metaphors

In discussing the Madoff scandal, Lew Freeman has left no Titanic reference untouched.

Yet despite the close advice of friends and associates, who have pleaded with him to move on from employing the Titanic as the sole reference point when discussing this scandal, Lew has indicated he believes he can still tease out relevant Titanic/Madoff metaphors:

''Even though you got off the Titanic, you may not be afloat,'' said Lewis B. Freeman, who runs a forensic accounting firm in Miami that has been approached by several victims' lawyers for help with the Madoff case.

Sensing that perhaps he may need to freshen it up just a bit, Lew continued:

"Well, let me think -- just because you bought a ticket on the Hindenburg doesn't mean you will arrive safely in New Jersey. Or how about this -- it's not as if it's 1956 and you're a Madoff investor lounging comfortably on the Andrea Doria. I would say investors right now are very much like that family who bought a house out on Amityville, Long Island.

Tell me the truth, are any of these any better?

Oh hail, I'm sticking with what works."

The SS Madoff Sinks; Wake Lifts All Boats?

John Pacenti of the DBR turns in a nice piece on the local lawyers and accountants salivating over the Madoff disaster:

Mark Raymond, managing partner of Broad and Cassel’s Miami office, said he represents a number of clients who lost millions when Madoff’s house of cards collapsed.

“There are people whose boat has capsized, and they are adrift,” he said. “There are families who went to bed at night with multimillion-dollar networks. I’m talking about networks worth $30, $50, $70 million, and all they have left are their homes and their cars because they put all of their money with Madoff.”

Raymond and other attorneys contacted for this story said the receiver, New York attorney Lee Richards of Richards Kibbe & Orbe, will take over what’s left of the investment firm bearing Madoff’s name and target investors who made money before the fall.

“They may have gotten out of the Titanic alive, but the ship may come back and sink them down the road,” said Lewis Freeman, a forensic accountant and attorney with Lewis B. Freeman & Associates in Miami.

Fired up, Lew continued:

"Yeah, it's like the investors are a penniless stowaway who think they're the king of the world, and Madoff is like a beautiful young socialite who is dangerously attracted to the stowaway but has agreed to marry Billy Zane. And Norm Braman is like Molly Brown. Is any of this making any sense?"

You know, I was ok with the sinking boat imagery when it was in Mark's steady hands. But leave it to Lew to always finds a way to take it one step too far.

UPDATE:

Intrepid reporter Julie Kay finds more local lawyers who want to sue some as-yet-unknown entities over Madoff. No sinking boat references, but there is this:

Michael Tein of Lewis Tein in Coconut Grove, Fla., is also looking to target third parties.

"We're going to be as aggressive as possible in pursuing third-party liability to the extent that we can," said Tein. Tein and his partner, Guy Lewis, are representing investors from South American and Manhattan who had invested $20 million with Madoff, including one client who invested $11.5 million. He declined to name the clients.

"I am very pessimistic about the ability to recover the investment itself," Tein said. "But the fraud is too big for there not to be a problem with banks, brokerage houses, clearinghouses and third party fiduciaries. It's not as if this gentleman kept all his money in-house."

And if he did, sue the maid!

Pretty soon it will be impossible to bump into anyone in this town who is not on one side or another of this thing.