Judge sentences Miami attorney to ten years for fraud

Lewis Freeman, a prominent attorney, accountant, and court-appointed receiver and trustee in Miami, has been sentenced to eight years in prison and 21 months house arrest for his role in a $2.6 million fraud.

The Daily Business Review, a sibling publication, reports that Freeman choked back tears as U.S. district court judge Paul Huck delivered the sentence on Friday as Freeman's family watched on.

Freeman's lawyers--Tew Cardenas's Joseph DeMaria and Podhurst Orseck's Robert Josefsberg, a past president and dean of the International Academy of Trial Lawyers--sought a seven-year sentence. But federal prosecutors pushed for the maximum 12.5- to-15.5-year term under federal sentencing guidelines, the DBR reports.

It was a cruel twist of fate for Freeman, no stranger to the U.S. attorney's office in Miami and private practitioners in Miami and Fort Lauderdale. He was a founder of Lewis B. Freeman & Partners, a law and forensic accounting shop that helped unravel several high-profile South Florida frauds.

Freeman's firm collapsed last October following an FBI raid on its offices connected to an investigation into $3.6 million in funds overseen by Freeman. Criminal charges followed in February, and Freeman pleaded guilty to perpetrating a $2.6 million fraud in early March.

Freeman served as the trustee for failed Miami factoring company E.S. Bankest, which collapsed in a $170 million fraud in 2003. Litigation arising from the demise of E.S. Bankest led Freeman to serve as a critical witness for plaintiffs that later sued the company's outside accounting firm, BDO Seidman, who they claimed missed the fraud through negligent audits.

That suit later ended with one of the largest damages verdicts ever against a U.S.-based accounting firm when a state court jury found BDO liable for $521.7 million in August 2007. The American Lawyer wrote about the lawyers involved in the case, including Freeman, in a February 2008 feature story.

Late last month, a Florida appellate court tossed out the verdict against BDO and ordered that the case be retried. While the criminal charges against Freeman were not mentioned on appeal, they could conceivably affect how a new trial proceeds, given how critical Freeman's testimony was to plaintiffs' counsel.

As for Freeman, his days as an extension of the court's authority are over. But that doesn't mean that former friends and colleagues of the gregarious Freeman, known for his flashy ties and strong support for the University of Miami's football program, have forgotten him.

The DBR reports that former U.S. attorney Kendall Coffey, interim U.S. attorney Guy Lewis, and famous Miami litigator Roy Black all wrote letters in support of Freeman urging Huck not to impose the maximum sentence.

Freeman's lawyers claimed their client began taking money from trust accounts in the early 1990s to offset a bad real estate deal. He continued shifting money from accounts that were supposed to remain separate, even tapping some of those funds for personal expenses, the DBR reports.

In the end, Huck split the difference between the punishment requested by prosecutors and defense lawyers, giving the 61-year-old Freeman a sentence that could still see him live out the rest of his days as a free man. The DBR notes the judge gave Freeman about 15 minutes to say a tearful goodbye to his family before being taken into custody.

(Published by The Am Law Daily – July 26, 2010)