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6 janvier, 2007 10:52

Julie Kay

Daily Business Review

05-24-2006

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.

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.

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."