02/24/2010

News / Receiver Charged with Theft of $6 Million from Fiduciary Funds

Jeffrey H. Sloman, United States Attorney for the Southern District of Florida, and John V. Gillies, Special Agent in Charge, Federal Bureau of Investigation (“FBI”), Miami Field Office, announced the filing of an Information against defendant Lewis B. Freeman, 61, of Miami, charging him with conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349. Defendant Freeman is scheduled to make his initial appearance in federal court today before U.S. Magistrate Judge Robert Dubé at 1:30 p.m.

For the past 10 years, Freeman has been appointed as a fiduciary in federal and state courts in numerous matters, including receiverships, liquidating trusteeships, and assignments for the benefit of creditors. In all of these matters, Freeman was entrusted with safeguarding and protecting the assets of others he obtained by virtue of his appointment. However, according to the Information, Freeman engaged in a long-term scheme to misappropriate funds from the matters he was appointed to oversee.

U.S. Attorney Jeffrey H. Sloman stated, “Mr. Freeman was a respected member of the South Florida business and legal community for decades. 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. Although our trust in individuals may be shaken, our commitment to investigating and prosecuting financial fraud is resolute.”

“At the heart of these charges is the egregious breach of fiduciary responsibility by Lewis Freeman. The courts routinely relied on him as an expert to assist in liquidating assets of companies,” said John V. Gillies, FBI Special Agent in Charge. “Instead, he was motivated by greed and stole from the assets he was responsible for protecting. It doesn’t matter whether a person is a con artist from the beginning or becomes one over time, the FBI remains committed to routing out fraud.”

According to the Information, after receiving these fiduciary appointments, Freeman would establish bank accounts into which he would deposit the funds belonging to the related entity. In handling these fiduciary matters, Freeman retained his forensic accounting firm, Lewis B. Freeman and Partners, Inc. (“LBFP”), with offices in Miami and Plantation, to assist him in performing his duties. Freeman was president and sole shareholder of LBFP, and was the only person with an ownership interest in the company.

According to the Information, from at least June 2000 through August 2009, Freeman misappropriated funds from fiduciary accounts by writing unauthorized checks to himself or to his company, LBFP. The unauthorized checks were deposited into LBFP’S operating account, and the funds were subsequently withdrawn by Freeman and used to support a lavish lifestyle.

The Information also alleges that Freeman used some of the money from unrelated fiduciary accounts under his control to repay shortfalls in the depleted fiduciary accounts by moving funds, in a Ponzi-like fashion, into the depleted accounts. Freeman also instructed other employees at LBFP to falsify financial reports by omitting the unauthorized checks that were issued, thus falsely inflating account balances for the respective fiduciary accounts. Many of these false financial reports were mailed as part of official reports that were submitted by Freeman to the courts overseeing Freeman’s fiduciary appointments.

In this manner, Freeman issued approximately 162 unauthorized checks, misappropriating at least $6 million from numerous matters to which he had been appointed fiduciary, resulting in at least $2.6 million in losses to affected fiduciary matters.

An Information is only an accusation and a defendant is presumed innocent until and unless proven guilty.

Mr. Sloman commended the investigative efforts of the FBI. The matter is being handled by Assistant U.S. Attorney Andrew K. Levi.

http://miami.fbi.gov/dojpressrel/pressrel10/mm022310.htm

1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27 | 28 | 29 | 30 | 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | 41 | 42 | 43 | 44 | 45 | 46 | 47 | 48 | 49 | 50 | 51 | 52 | 53 | 54 | 55 | 56 | 57 | 58 | 59 | 60 | 61 | 62 | 63 | 64 | 65 | 66 | 67 | 68 | 69 | 70 | 71 | 72 | 73 | 74 | 75 | 76 | 77 | 78 | 79 | 80 | 81 | 82 | 83 | 84 | 85 | 86 | 87 | 88 | 89 | 90 | 91 | 92 | 93 | 94 | 95 | 96 | 97 | 98 | 99 | 100 | 101 | 102 | 103 | 104 | 105 | 106 | 107 | 108 | 109 | 110 | 111 | 112 | 113 | 114 | 115 | 116 | 117 | 118 | 119 | 120 | 121 | 122 | 123 | 124 | 125 | 126 | 127 | 128 | 129 | 130 | 131 | 132 | 133 | 134 | 135 | 136 | 137 | 138 | 139 | 140 | 141 | 142 | 143 | 144 | 145 | 146 | 147 | 148 | 149 | 150 | 151 | 152 | 153 | 154 | 155 | 156 | 157 | 158