Carlos Loumiet in Cross-Hairs Again.

After successfully beating the OCC and suing for $4 million in damages, Carlos Loumiet (now at DLA Piper) finds himself the subject of a suit by the receiver overseeing the R. Allen Stanford Ponzi scheme:

"As a partner at Greenberg Traurig and then Hunton & Williams, Carlos Loumiet helped design the basic architecture of the Ponzi scheme by helping Stanford establish and operate unlicensed foreign bank offices in the U.S. and essentially hijacking the sovereign island nation of Antigua through the use of political corruption, loans made with funds stolen from Stanford's investors, and even writing the laws that governed Stanford International Bank's operations," said plaintiff attorney Ed Snyder, who filed the complaint, in a prepared statement.

Denies impropriety

Loumiet denied any wrongdoing.

"I can say that I have never in my long career knowingly helped any client commit any wrongdoing," Loumiet said in a prepared statement. "I have never represented anyone that I knew was engaged in wrongdoing. And after years of investigations by the federal government and months of trials involving Allen Stanford and his codefendants, I have not been implicated in any wrongdoing."

Likewise, the two named law firms said they had no idea what was going on. Hunton & Williams called the suit "factually and legally baseless and an overreach by Stanford Financial Group's understandably frustrated investors."

The attorney for Greenberg Traurig, Jim Cowles, said the lawsuit is just one more in a series of legal actions intended to "pry open a deep pocket" in order to compensate victims.

More allegations from the suit here.

If Carlos beats this one too, he'll be keeping my friend Andres Rivero plenty busy.

In other news, Spencer Aronfeld speaks through an old Campbell's soup can about the recent Lawyers to the Rescue Hurricane Sandy fundraiser:

Spence -- hire a sound guy!

Here's That Humdrum Judge Scola Order No One Is Talking About!

I don't get lawyers sometimes -- if I received an unprecedented, groundbreaking, one-of-a-kind order from a federal judge, the last thing I would do is tell everyone how unprecedented, groundbreaking, and one-of-a-kind it is.

Because last I checked, aren't there still appellate courts?

But not everybody thinks like me (and that's probably a good thing):

In a landmark decision, a Miami federal judge ruled Friday that a class action brought by investors can proceed against the Securities and Exchange Commission in one-time billionaire R. Allen Stanford's investment scheme.

Plaintiffs attorneys called the ruling by U.S. District Judge Robert N. Scola Jr. rejecting the SEC's motion to dismiss "historic."

"Historic"?

Come on, Brown v. Board of Education is "historic," landing on the moon is "historic," Bo Derek running on the beach in a gold suit is -- well, you get my drift.

And if asked I would simply state that the Order was well-reasoned and a solid application of longstanding federal law, policy, and jurisprudence.

But what do I know -- I've never received an "historic" order before.

Allen Stanford Receiver Wants Miami Heat to Pay Money Back.

Oh I long for the days when we used to make fun of R. Allen Stanford.

Can anyone forget Bowman Brown's amazingly accurate "spidey sense" and deft way with a self-deprecating anecdote?

God I miss that material.

Well, there is hope:

The National Basketball Association’s Miami Heat was sued by the R. Allen Stanford receivership for allegedly collecting more than $1.3 million in ill-gotten gains from Stanford’s alleged fraud.

“The payments to the Miami Heat parties are related to Stanford’s sponsorship, advertising and promotional activities,” Ralph Janvey, the court-appointed receiver, said in a complaint filed today in Dallas federal court.

What is it with crooks and sports teams?

Remember how Scott Rothstein blew wads of dough getting close to sports stars so he could pretend he had a jump shot or could throw the ball just like Dan Marino?

Short Jews, what can I say.

"Significant Fee Enhancement" Request Almost Causes Judicial Heart Attack

There's been a lot of discussion lately about the bills submitted by receivers and trustees in bankruptcy to compensate lawyers for marshaling up assets.

David notes Vanessa Blum's excellent coverage of the recent hearing before Judge Moreno, where Roberto Martinez argued for an $11 million "enhancement" for his and KTT's work on the MBC receivership.

As reported by Vanessa, the Judge in his usual manner had something funny and charming yet witty to say:

“I needed a defibrillator,” he joked. “We’re talking about a lot of money.”

He's right, but to be fair I pulled the final fee app, which you can review here.

Roberto basically argues that his firm and KTT agreed to discount their rates back in 2004, have not sought any increases during the five years of the receivership, and did incredible work very efficiently which resulted in a big distribution to investors. Accordingly, they ask for 10 percent of what they collected as a bonus, which apparently was an option contemplated in the original fee agreements.

Michael Hanzman, who served as counsel in a related class-action case involving MBC, approves:

“If you want to attract the best and the brightest people to take these cases, you have to pay a reasonable fee,” Hanzman said. “This is not a pro bono case.”

I think the Judge's comments highlight where he is going with this.

However, I wonder whether these firms could have billed at incrementally higher rates over the last five years and possibly recouped a chunk of this bonus back through regular applications to the Court without ever garnering this kind of headline?

Indeed, consider what's going on with our friend Allen Stanford and his receivership, which is just off the ground and has accrued over $36 million in fees -- or $100,000 a day. Not good.

The Judge also referenced the Supreme Court's recent dismay over how much it costs to litigate cases nowadays, though that involved a fee-shifting statutory question not at issue here.

My own take is this is probably not the best case or the best time to make a request like this, and you definitely do not ever want to make Judge Moreno's eyes boggle if you can avoid it.

Let's see what he does with it.

Greenberg Traurig Compared to Grisham's "The Firm"?

Well, consider me stunned.

I am shocked -- shocked mind you -- that in this excellent Herald article on Carlos Loumiet and his disgraced client R. Allen Stanford, there is nary a single mention of The World's Finest Legal Anecdote.

Bowman, you broke my heart.

Still, it's a blockbuster article, and certainly leads one to think there may be some potential liability down the road somewhere.

It's funny how the world can turn in a minute. Here you have Carlos, leaving GT to go to Hunton, and undoubtedly part of that is an evaluation of his book of business. So at that moment having R. Allen Stanford as a major client is a big deal, and attractive to any firm that would want to hire Carlos away from GT.

Now, that client doesn't look so hot:

Though not under criminal investigation, Greenberg Traurig is facing a legal review of its actions on this tiny island that was the center of his banking kingdom.

The court-appointed receiver trying to recover money for victims is demanding records of the legal work provided to the disgraced banker -- including that of Greenberg. The effort is the latest by the receiver to untangle the complex deals spun by Stanford as well as the conduct of his lawyers.

The demand for the records has put a rare spotlight on Greenberg Traurig and another firm, Hunton & Williams, which now holds the records.

``I'm sure one of the things they will look at is what did Greenberg Traurig know, and when did they know it, and did they have any liability?'' said Ross Gaffney, a former FBI agent who investigated Stanford.

Greenberg Traurig's effort to help Stanford in 1998 was one in a string of instances in which the Florida law firm propelled Stanford's business interests and helped rescue him from crisis.

The Miami Herald sought interviews with five lawyers who represented Stanford while working for the law firm, but only two responded.

Those lawyers, citing confidentiality concerns, declined comment, saying they were simply giving legal support and were unaware of any illegal schemes by Stanford.

Cesar Alvarez, the firm's chief executive officer, also declined to be interviewed.

Taking it a step further, The Business Insider wonders whether this all sounds vaguely familiar:

Judge David Godbey in Houston is expected to decide whether the firm must comply.

Regardless, we wonder if John Grisham is taking note. With a few embellishments -- an extortion here, a murder there -- he could have a another big book.

Come on. I don't think this comparison is remotely fair.

For example, there is no one at GT that looks anything like Tom Cruise.

(Gene Hackman, maybe.)

It does, however, raise an interesting question -- who would you cast as Cesar?

Probably Not Good to Be "Outside Attorney A."

Former CFO for R. Allen Stanford, Jim Davis, pleaded guilty to fraud yesterday.

This is probably not good news for Proskauer's Tom Sjoblom, who the WSJ Law Blog has written is most likely "Outside Attorney A" in the Davis plea agreement.

Here's just some of the fun stuff detailed by the Law Blog from the agreement:

For starters, Sjoblom comes across in the agreement as a fervent defender of Stanford International Bank as early as 2006. Davis agreed that the government could prove that in 2006 “Outside Attorney A” (Sjoblom) contacted the SEC, which had started an investigation of the bank, to tell the agency that it had “no basis” to request documents concerning the bank’s investment portfolio, and that he “had spent 15 years investigating fraud for the SEC and was ‘well-equipped’ to recognize the ‘hallmarks of fraud.’”

But the allegations relate to events from a couple years later. In 2008, the plea agreement says, Sjoblom was informed that the bank’s CD investment portfolio included a tier of illiquid investments valued at $6 billion and that it wasn’t disclosed to investors. (The tier later turned out to be mostly fictitious.) Also, Sjoblom learned that the bank’s chief investment officer Laura Pendergest-Holt, didn’t manage that part of the portfolio.

But Sjoblom, in a meeting in January of this year with SEC lawyers who were investigating the CD investment portfolio, according to the plea, “falsely maintained” that the company’s chief executive and chief financial officer didn’t “micro-manage” the CD investment portfolio and falsely maintained that Holt would be in the best position to talk about it. Sjoblom then “falsely informed the SEC attorneys at this meeting that [the bank] was ‘not a criminal enterprise.’”

Later, in February, Sjoblom allegedly learned at a Miami meeting with Stanford execs that the bank was, according to the plea agreement, likely insolvent because the CD investment portfolio was essentially fictitious. The chief executive, Allen Stanford, later told him that the bank’s “assets and financial health had been misrepresented to investors.”

A few days later, on Feb. 10, Sjoblom sat by Holt’s side as she told SEC lawyers under oath that “she was unaware of the assets and allocations of assets” in the $6 billion tier, despite the fact that both Holt and Sjoblom had allegedly been given details about the tier in the Miami meeting with Stanford execs. On Feb. 14, Sjoblom resigned from representing the bank and sent a note to the SEC, saying, “I disaffirm all prior oral and written representations made by me and my associates to the SEC staff.”

It's weird -- I have scoured the agreement and news reports, and have not found a single interesting anecdote by anyone reached for comment in connection with this story.

I did, however, just come across this Miami lawyer arguing that if you want to be a player in international banking you have to have a presence in Miami, thanks to our "world-class money management."

And don't forget our great regulators!

I mean seriously, what could possibly go wrong?

Bowman Brown Also Had Nothing To Do With Representing Stanford's "Outside Wives" Either.

Quick question -- how many "outside wives" do you have?

R. Allen Stanford had the customary number -- no more, no less -- for a Miami bigshot who was bilking investors for billions from his base at the Miami Center.

I mean, the guy's not greedy or anything.

But I guess one of his "outside wives" sold her Key Biscayne house and moved the proceeds offshore blah blah blah, and the Houston receiver overseeing the case doesn't really like that too much:

Stanford receiver Ralph Janvey said he wants U.S. District Judge David Godbey to find Rebecca Reeves-Stanford and her Florida attorneys in contempt for selling a $3 million house in May, after she learned Stanford’s assets were being sought to repay investors allegedly swindled in a $7 billion Ponzi scheme.

Reeves-Stanford, a resident of Key Biscayne, near Miami, is “one of several ‘outside wives’ with whom Stanford had an ongoing relationship” for “nearly two decades,” Kevin Sadler, Janvey’s attorney, said in court papers filed yesterday in federal court in Dallas.

Reeves-Stanford’s newest lawyer, Bradford M. Cohen of Fort Lauderdale, Florida, said Janvey won’t succeed in having his client or her previous attorneys found in contempt.

Hmm, just who are the Miami attorneys who are alleged to have assisted Ms. Reeves-Stanford?

(Please please please please please.....)

Darn!

Janvey is asking that Reeves-Stanford’s two previous lawyers -- Melida Viera and John Priovolos, both of Miami -- be held in contempt for allegedly facilitating her sale of the property and movement of the proceeds to an offshore account. Priovolos declined to comment. Viera couldn’t be reached for comment after regular business hours yesterday.

Cue well-worn anecdote.......

Bowman Brown Recounts Stanford Anecdote For Last Person in Miami Unaware of Story

I suppose there is a small possibility somebody somewhere has not yet heard Bowman Brown recount his nearly perfect Gore Vidal-level anecdote regarding R. Allen Stanford.

For example, maybe somebody living under a rock (highway underpass?), or somebody who just came out of a coma, or a recently-freed prisoner from a notorious French penal colony, somebody like that.

For that last person, there is this:

Bowman Brown, a partner at Shutts & Bowen in Miami, had limited dealings with Stanford when he came to Miami to hire a lawyer. Brown looked at Stanford’s plan and dismissed it.

“I sat down and talked to him. What he had in mind was not plausible,” Brown said. “It wasn’t something I wanted to be involved in.”

Stanford ended up hiring Miami’s Greenberg Traurig law firm instead. The firm did not respond to questions about its involvement with Stanford.

“After having declined to represent him, I followed the development of Stanford carefully,” Brown said. “I was astounded he was able to develop what he did without any apparent impediments.” Brown’s firm shared a downtown office building with Stanford’s Miami branch.

For those of you keeping score, we have only covered this single Bowman Brown anecdote ten times -- here, here, here, here, here, here, here, here, here and here.

Now, if somebody would just ask Lew Freeman about the Titanic, my work here would be done.

Just Lucky, I Guess.

This from Alana Roberts in today's DBR:

This is the second, high-profile Loumiet banking client that has been implicated in a fraud.

Note -- Carlos was completely cleared of the first one.

Still, I'm curious -- Bowman Brown, do you have anything to add to this story?

Who Is Bowman Brown's Mystery Man?

Remember when Bowman Brown nearly had his own Teevee show, appearing all over the media and sharing that now-apocryphal "brush with Stanford" anecdote? I love the anecdote personally, but even I started to wonder when I turned on iCarly and dang it! -- there he was again....

But it is such a great story. To borrow from Gore Vidal for a moment, the art of a good lawyer war story is to craft something that manages to burnish your own skills and competence at some other lawyer or judge's expense.

By that measure Bowman has hit it out of the park.

Still, there was always this lingering unanswered question:

"What he wanted to do was just not workable in my view, it was not anything I wanted to be near," Brown said. "I told him that I couldn't help him, so he went across the street and found somebody who could and set up in Miami."

So -- just who is Bowman talking about??

Now comes this tantalizing clue:

As part of his effort to locate and recover Stanford assets, Ralph Janvey, a court-appointed receiver, asked a judge to force the law firm Hunton & Williams LLP to turn over all records of its work for Stanford International Bank, according to papers filed March 24 in federal court in Dallas.

The Richmond, Virginia-based law firm rejected a Feb. 24 request to ship the receiver original files and billing records for Stanford’s foreign businesses, including the Antigua-based bank and operations in Ecuador, Panama and Grenada, according to Janvey.

“The Hunton & Williams law firm has declined to relinquish possession and control of records that are part of the receivership estate,” Janvey said in the filing. “Information regarding valuable assets belonging to the bank and other offshore Stanford entities may be found in the files.”

The law firm and one of its Miami-based lawyers, Carlos Loumiet, questioned Janvey’s jurisdiction over Houston-based Stanford’s foreign records. Janvey, appointed to recover assets to repay victims, said Hunton & Williams is providing only the requested documents for Stanford’s U.S. businesses.

We previously wrote about Carlos here (he was completely acquitted, by the way).

Now Carlos appears to only be representing his firm regarding the subpoena, from what I can tell.

But does this bring us any closer to solving the mystery?

Fun At the Miami Center!

Hey kids, have you folks been by the Miami Center today? Here's the latest:

Nearly 140 Stanford Financial employees are being escorted in small groups into their downtown Miami offices today to remove all their possessions, NBC 6 is reporting.

Wait a minute -- this article is missing something. I can't quite put my finger on it.

An anecdote, maybe?

Come Back to the Five and Dime, Bowman Brown, Bowman Brown.

Oh Bowman Brown, why have you left us all alone?

Where will we get all of our super easy Stanford scandal posts? Will we have to put some effort into this blog again? Oh hail.

Let’s take a wistful look back at the evolution of a media anecdote writ large:

Our story begins on February 17, when the breaking news of the scandal emerged, with this quote from Brown:

''The Miami operation was an important focal point for international investors, especially from Latin America'' said Bowman Brown, a Miami attorney, who has several clients who bought CDs from the loosely regulated Antiguan bank. ``The consequences, particularly in Venezuela and also in Colombia and other Caribbean jurisdictions, will be significant.''

By Sunday, February 22, however, this blockbuster anecdote appeared in the Palm Beach Post:

During the 1980s, Stanford came calling at the office of Miami attorney Bowman Brown, a respected banking lawyer with the Shutts & Bowen law firm. Stanford needed help setting up a new venture.

"He wanted to set up an offshore operation with an office in Miami that would not be regulated by U.S. regulators," Brown said.

Suspicious, Brown declined the job.

Stanford ended up going elsewhere for legal help, and established the Miami office of Stanford International Bank of Antigua. The bank grew to three floors of an office building in downtown Miami. But around town, the Stanford bank's credibility wasn't high.

"It was an open secret in the banking community that the business model wasn't right," Brown said. "If you're paying above market rates and have a small accounting firm in a jurisdiction where they don't heavily regulate banks, and the process involves putting money into a black box and it comes out enhanced ... something is wrong."

About nine months ago, Brown said he saw Stanford in the elevator of his building, and Stanford bragged about the billions of dollars under management. But Brown got the last laugh. Last week, the Securities and Exchange Commission charged Stanford with orchestrating an $8 billion fraud selling high-yield certificates of deposit in his Antiguan bank. The SEC froze the assets of three of the companies Stanford controls: the bank; Stanford Group Co., a broker-dealer; and Stanford Capital Management, an investment adviser.

All Brown can say now is: "I am so glad I took a pass."

Ahh, a delicious war story, one of the best in my opinion.

The story of Bowman's Nostradamus-like good judgment was picked up everywhere, with inevitable TV interviews, and by the time the DBR picked it up, the story had this additional detail:

"What he wanted to do was just not workable in my view, it was not anything I wanted to be near," Brown said. "I told him that I couldn't help him, so he went across the street and found somebody who could and set up in Miami."

Now we know Shutts & Bowen (and Stanford's offices) are located in the Miami Center. And the American Lawyer reported this about Stanford's counsel:

One issue in particular, though, is relevant for the Am Law community: that an attorney for the company, Thomas Sjoblom of Proskauer Rose, sniffed out the fraud, withdrew his representation, and told federal investigators he essentially took back everything he had told to them in recent weeks, according to Bloomberg.

Sjoblom didn't return calls for comment, nor did Richard Razook of Hunton & Williams, another attorney reportedly representing Stanford.

Richard's office is not "across the street," it's well down the street on Brickell, and thus the mystery remains.

So by my estimation there are at least two more news pegs to this great anecdote -- (1) just who Bowman was vaguely alluding to without really identifying anyone in particular; and (2) the indignant denial by whoever the lawyer is that Bowman didn't specifically identify.

Come on folks, these posts don't write themselves. Give a brother a hand, will ya?

Did I Mention That Crook Almost Hired Me?

Can anyone politely ask Bowman Brown to shush up already over his now legendary near-miss almost representation of R. Allen Stanford:

“He came to town referred by a prominent Texas law firm in the late ’80s, early ’90s,” said Bowman Brown, an international banking attorney with Shutts & Bowen. “He was referred to me initially and I met with him.”

Stanford wanted to set up an offshore operation with an on-shore presence to sell into Latin America.

“He had just been thrown out of Montserrat — he didn’t tell me that — but researching that I see that he has and he wanted to set up in Antigua, which received sort of the refuse from Montserrat, which was a pirate banking community until Britain closed it down,” Brown recalled. “He had a bank chartered there and when Britain closed it down, they closed him down.”

Then Antigua opened up.

“What he wanted to do was just not workable in my view, it was not anything I wanted to be near,” Brown said. “I told him that I couldn’t help him, so he went across the street and found somebody who could and set up in Miami.”

Well, come on now, tell us!

What nudnick lawyer "across the street" was desperate enough to be retained by this patently obvious two-bit huckster?

But Bowman's once-sealed lips are now sealed again....sort of:

“I saw him [Stanford] in the elevator maybe nine months ago and as he got off the elevator,” Brown said, “he said, ‘Hey, remember me?’ I said, ‘Yeah, sure I do. How are doing?’ He said, ‘Now we have $50 billion under management,’ sort of saying, ‘You dummy, look at all the fees you passed on.’ I thought to myself, ‘I’m sure I’ll see you in handcuffs some day.’ I’m so glad I didn’t get near that guy.”

Brown and other international banking attorneys are getting deluged by Stanford clients fearing the worst and hoping that somehow their money can be recovered.

“We’re working with maybe 40 or 50 clients at this point, and we’re just at the beginning,” Brown said. “I mean, I’m getting a call every 15 minutes, or people lining up at the door. This at a minimum will probably involve the $8 billion that supposedly was booked in the bank, but it will also involve all of the stuff that was booked in the broker dealer and whatever else he says, if half of it is to be believed — he has under advisement, which is $50 billion. Conceivably it could be in the range of the Madoff thing.”

Well, I guess there's nothing wrong with a little press to drum up some business, especially in this economy, and Bowman's a quality lawyer of course.

I particularly love any war story that burnishes your own reputation at the expense of the reputation of someone else. Like Gore Vidal says, it's not enough to win -- others must fail.

Time to Dust Off Those Stanford War Stories!

Boy, it's funny how everyone in town now swears they always knew R. Allen Stanford was a crook.

Hail, the lady pouring my cafecito this morning went on and on about how she always thought the guy was bad news.

Now comes Shutts attorney Bowman Brown, who shares this delightful war story about the good old days:

During the 1980s, Stanford came calling at the office of Miami attorney Bowman Brown, a respected banking lawyer with the Shutts & Bowen law firm. Stanford needed help setting up a new venture.

"He wanted to set up an offshore operation with an office in Miami that would not be regulated by U.S. regulators," Brown said.

Suspicious, Brown declined the job.

I don't know, the last time I checked isn't that an attorney-client conversation?

Who cares, the guy's sunk anyway:

"It was an open secret in the banking community that the business model wasn't right," Brown said. "If you're paying above market rates and have a small accounting firm in a jurisdiction where they don't heavily regulate banks, and the process involves putting money into a black box and it comes out enhanced ... something is wrong."

About nine months ago, Brown said he saw Stanford in the elevator of his building, and Stanford bragged about the billions of dollars under management. But Brown got the last laugh. Last week, the Securities and Exchange Commission charged Stanford with orchestrating an $8 billion fraud selling high-yield certificates of deposit in his Antiguan bank. The SEC froze the assets of three of the companies Stanford controls: the bank; Stanford Group Co., a broker-dealer; and Stanford Capital Management, an investment adviser.

All Brown can say now is: "I am so glad I took a pass."

See, everyone knew -- except the SEC (and Bowman's clients).

Bankers Behaving Badly, South Florida Edition.

Geez, I don't know who's worse -- Mr. Drysdale, or Mr. Mooney? Or maybe it's our own Miami Center's R. Allen Stanford:

At the heart of the investigation are CDs issued by Stanford International Bank, which claims to have 30,000 clients in 131 countries. The CDs paid ''improbable and unsubstantiated high interest rates,'' ranging from 11.4 percent to 16.5 percent between 1993 and 2005, and were sold by a web of brokers who collected hefty commissions for touting them, federal regulators alleged. Stanford claimed to invest the CD proceeds to buy safe, liquid assets, but instead invested in real estate and private equity, according to the SEC.

''The Miami operation was an important focal point for international investors, especially from Latin America'' said Bowman Brown, a Miami attorney, who has several clients who bought CDs from the loosely regulated Antiguan bank. ``The consequences, particularly in Venezuela and also in Colombia and other Caribbean jurisdictions, will be significant.''

Stanford's Miami office, which occupies three floors at the Miami Center at 201 S. Biscayne Blvd., has 138 employees, down from about 500 in 2006. Operations include a private client group, corporate affairs and investment banking, Brian Bertsch, a Stanford spokesman, said last week. The company transferred its Latin American operations, which were formerly part of the Miami office, to Mexico City about two months ago, he said. On Tuesday, Bertsch referred requests for comment to the SEC.

Stanford, a U.S. citizen who became a citizen of Antigua & Barbuda 10 years ago, has other Miami ties. He bought the sprawling bayfront Tyecliffe Castle, formally the Wackenhut estate, in Gables Estates in 2003 for $10.5 million.

Finally -- a nice solid bank fraud that is not centered in New York. Take that, Bernie!

See you all in the SD FL......