IOTA ACCOUNT FRAUD
PARTIES
I. INTRODUCTION
WALTER L. LISTA (“Complainant”) hereby files this complaint against JorgeCarbonell (“Carbonell”); Benjamin R. Alvarez (“Alvarez”), the law firm of Alvarez, Carbonell, Feltman & Da Silva, P.L. (“A/C”); and Roniel J. Rodriguez IV (“Rodriguez”), in violation of rules 41.3, 41.4, 41.7, 43.3, 44.1, 51.1, of the Rules Regulating the Florida Bar.
Alvarez,Carbonell et. Al (collectively “A/C”) intentionally defrauded Citizens Property Insurance Corporation (“Citizens”) by fabricating the supporting documentation relied upon during the course of litigation between A/C’s client, Inglewood Townhomes Condominium Association (“Inglewood”) and Citizens. A/C acted with the express purpose of artificially inflating Inglewood’s damages, and, consequently, A/C’s contingency fee. In order to unjustly enrich themselves further, and continue to perpetuate a scheme to defraud, A/C & Rodriguez siphoned Inglewood’s settlement funds being held in A/C’s trust account by fabricating & utilizing straw invoices to create the appearance of legitimate litigation costs. Complainant Lista Engineers company was unwittingly used as one of the straw invoices fabricated by A/C and Roniel Rodriguez IV “Rodriguez” in this complex scheme to defraud Citizens, Inglewood, and the courts.
After defrauding Citizens and siphoning Inglewood’s Settlement funds, A/C and Rodriguez conspired to devise an additional scheme and artifice to plunder approximately $55,000.00 from Inglewood’s cash reserves. As part of this scheme, A/C intentionally caused Inglewood to default on an agreement with Rodriguez’s straw clients, thereby entitling Rodriguez to a default judgment (the “Judgment”) against Inglewood. The sham settlement agreement between A/C & Rodriguez & the default Judgment in favor of RJR Charitable Holdings, LLC formed the basis of Rodriguez’s writ of garnishment directed against Inglewood’s bank and the disbursement of Trust account funds being held by A/C.
II. IOTA ACCOUNT FRAUD
Composite Exhibit A “The checks”
On or about January/February 2011 A/C fraudulent use of the legal system and fabrication of fraudulent documents netted A/C an approximate $460,000 settlement from Citizens insurance regarding the Inglewood case. Once the approximate $460,000 Citizens settlement proceeds were cleared into the A/C IOTA account, A/C began preparing, under the cost reimbursement contingency fee agreement between A/C and Inglewood, to disburse funds.
Alvarez, knew or should have known that invoice# 10420 was a SHAM as Alvarez did not in any way shape or form, or at any time whatsoever speak with me, the complainant, Lista Engineer about invoice #10420 or check # 3327 made payable to me. Complainant, Lista Engineer had no idea this invoice #10420 or check # 3327 even existed as the invoice #10420 is completely fraudulent. Complainant holds a Florida professional engineering license, and renders professional services as an agent of Lista Inc. and was NOT AWARE OF HIS ROLE therein until the fraud was uncovered.
Exhibit C Series of Emails between Inglewood and Alvarez
On or about May 2014, The Coral Gables Police Department has confirmed that check #3327 payable to Walter L Lista P.E. was never cashed. Lista Engineer never received check #3327.
See Exhibit “D” Sham Settlement Agreement
III. Fraud Upon the Courts, Expert Claims v. Inglewood, Florida Circuit case in Miami-Dade, Case no. 2011-12415 CA 03.
Note: The multiplication on Line 3 of Eduardo Rodriguez Invoice # 100 is incorrect.
See Exhibit “E” Expert Claims Lawsuit, Judgment & Garnishment
As previously stated, Straw 2’s preSettlement fee consisted of approximately $91,870.00 out of the total $128,070.00 in Straw Costs. The remaining balance of $36,200.00 was comprised of a) the Lista Engineer Inc. preSettlement fee of $16,000.00; b) the Straw 3 preSettlement fee of $8,200.00; and c) $12,000.00 which represented Inglewood’s share of mediation fees. It should also be noted that, as of April 29, 2014, Straw 2’s registered agent was ACG Registered Agents, LLC (“ACG”). At all relevant times, Carbonell and Alvarez were the managing members of ACG. It should also be noted that, at all relevant times, Alvarez and Rodriguez were partners in numerous current and past business ventures.
Exhibit “F” Sunbiz Records
A/C performed some of its obligations under the Settlement by “paying” Lista Inc. and Straw 3, but the Firm ultimately caused Inglewood to default on the Settlement by intentionally failing to pay Straw 2 and Rodriguez before the May 12 deadline. On May 17, 2011, Rodriguez filed for a Clerk’s default against Inglewood due to Inglewood’s failure to file a responsive pleading in the Expert litigation. On May 26, 2011, Rodriguez obtained a Final Judgment in the amount of $128,070 plus pre judgment interest in the sum of $13,894.72 plus fees of $456 for FINAL JUDGMENT of $142,420.72 (the “Judgment”).
Violation of the Rules Regulating the Florida Bar
Complainant alleges that A/C and Rodriguez (collectively the “Lawyers”) violated Rule 34.3 of the Rules Regulating the Florida Bar. Rule 34.3 provides in pertinent part:
The commission by a lawyer of any act that is unlawful or contrary to honesty and justice, whether the act is committed in the course of the attorney's relations as an attorney or otherwise, whether committed within or outside the state of Florida, and whether or not the act is a felony or misdemeanor, may constitute a cause for discipline.
Lawyers violated rule 34.3 by: i) fabricating supporting documentation in the Citizens litigation, specifically, the Invoice directed at A/C; ii) executing the Settlement as assignee of Lista Inc.; iii) drafting a negotiable instrument naming Lista Inc. as payee with the knowledge and specific intent to perpetuate the fraud against Citizens and Inglewood;9 iv) endorsing the abovementioned instrument by fraudulently claiming and exercising an assignment of a right which was not granted; v) converting Inglewood’s proceeds from the Citizens litigation by utilizing straws; vi) intentionally causing Inglewood to default on the Settlement; and vii) conspiring to convert Inglewood’s cash reserves as a result of the abovementioned default.
As a product of their expertise in the area of firstparty insurance litigation, Lawyers possess asymmetrical information over the lay population in general and Inglewood specifically. Lawyers used their position and asymmetrical information to the detriment of Inglewood by manipulating the intricacies of the legal system. Lawyers conduct is highly prejudicial to the administration of justice, and so egregious that it may constitute a violation of state and federal criminal statutes.
Complainant alleges that A/C violated rule 41.3, Rules Regulating the Florida Bar. Rule 41.3 provides, “[a] lawyer shall act with reasonable diligence and promptness in representing a client.” The Comment to the rule further provides that:
“A lawyer should pursue a matter on behalf of a client despite opposition, obstruction, or personal inconvenience to the lawyer and take whatever lawful and ethical measures are required to vindicate a client's cause or endeavor. A lawyer must also act with commitment and dedication to the interests of the client and with zeal in advocacy upon the client's behalf.”
A/C violated rule 41.3 by failing to act diligently in the representation of Inglewood. Specifically, the Firm failed to act diligently by intentionally failing to satisfy the terms of the Settlement, thereby causing Inglewood to default under the Settlement and suffer default judgment. As a result of the Judgment, Rodriguez garnished approximately $55,000.00 of Inglewood’s cash reserves.
Complainant alleges that A/C violated rule 41.4, Rules Regulating the Florida Bar.
Rule 41.4 provides:
(a) Informing Client of Status of Representation. A lawyer shall:
(1) promptly inform the client of any decision or circumstance with respect to which the client's informed consent, as defined in terminology, is required by these rules;
(2) reasonably consult with the client about the means by which the client's objectives are to be accomplished;
(3) keep the client reasonably informed about the status of the matter;
(4) promptly comply with reasonable requests for information; and
(5) consult with the client about any relevant limitation on the lawyer's conduct when the lawyer knows or reasonably should know that the client expects assistance not permitted by the Rules of Professional Conduct or other law.
(b) Duty to Explain Matters to Client. A lawyer shall explain a matter to the extent
reasonably necessary to permit the client to make informed decisions regarding the representation.
A/C violated rule 41.4 by failing to inform Inglewood of the status of its representation of
Inglewood throughout the Citizens and Expert Claims litigation, and the Expert Claims
Settlement negotiations. A/C did not properly inform Inglewood of its relationship with Rodriguez such that Inglewood could give informed consent to A/C’s continued representation. Further, A/C violated subsection (b) of the rule by failing to fully and adequately explain to Inglewood the consequences of a default on the Expert Claims
Settlement.
4. Rule 43.3 Candor Toward the Tribunal
Complainant alleges that the Lawyers violated rule 43.3, Rules Regulating the Florida Bar. Rule 43.3 provides:
(a) False Evidence; Duty to Disclose. A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer;
(2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client...
(4) offer evidence that the lawyer knows to be false. A lawyer may not offer testimony that the lawyer knows to be false in the form of a narrative unless so ordered by the tribunal. If a lawyer, the lawyer’s client, or a witness called by the lawyer has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence that the lawyer reasonably believes is false.
Rodriguez violated rule 43.3 by failing to amend the complaint in the Expert Claims litigation to reflect the satisfaction of the Lista Inc. and Straw 3 debts. The Firm violated rule 43.3 by knowingly presenting a falsified affidavit in connection with the Expert Claims litigation. Further, Lawyers violated the rule by utilizing straws to procure a judgment against Inglewood, and failing to disclose this fact to the court.
Complainant alleges that Lawyers violated rule 48.4, Rules Regulating the Florida Bar. Rule 48.4 provides:
A lawyer shall not:
(a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another;
(b) commit a criminal act that reflects adversely on the lawyer's honesty, trustworthiness, or fitness as a lawyer in other respects;
(c) engage in conduct involving dishonesty, fraud, deceit, or misrepresentation…[or]
(d) engage in conduct in connection with the practice of law that is prejudicial to the administration of justice.
The Lawyers violate rule 48.4 by utilizing straws to convert Inglewood’s litigation proceeds, and by conspiring to convert $55,000.00 of Inglewood’s cash reserves. Lawyers’ conduct is prejudicial to the administration of justice.
6. Rule 51.1 Trust Accounts
Complainant alleges that Carbonell and Alvarez violated rule 51.1, Rules Regulating the Florida Bar. Subsection (b) of the rule provides:
Application of Trust Funds or Property to Specific Purpose.
Money or other property entrusted to an attorney for a specific purpose, including advances for fees, costs, and expenses, is held in trust and must be applied only to that purpose. Money and other property of clients coming into the hands of an attorney are not subject to counterclaim or setoff for attorney’s fees, and a refusal to account for and deliver over such property upon demand shall be deemed a conversion. [emphasis original]
51.1(e) provides:
Notice of Receipt of Trust Funds; Delivery; Accounting.
Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property. [emphasis original]
Carbonell and Alvarez violated rule 51.1 by a) holding the proceeds of the Citizens litigation in trust for Inglewood; b) Intentionally failing to apply those funds to the specific purpose for which the money was intended, namely, timely distributing the funds to Inglewood’s creditors as required under the Settlement; and c) converting said funds for A/C’s personal use. Additionally, after it negotiated the Settlement on behalf of Inglewood, A/C was obligated under rule 51.1 to promptly notify the thirdparty creditors and distribute Inglewood’s funds by May 12, 2011. A/C did not distribute the funds due to Straw 2 and Rodriguez until June 1, 2011 when it filed a response to Rodriguez’s motion for writ of garnishment. On June 6, 2011, A/C made the final distribution of funds under the Settlement. A/C’s violation of the rule ultimately caused Inglewood to default under the Settlement and permitted Rodriguez to garnish Inglewood’s cash reserves.
In an email dated February 28 2011 from Alvarez to Inglewood Alvarez states:
“In case you are not aware, A trust account is a bank account maintained incident to a lawyer’s law practice in which the lawyer holds funds received in a fiduciary capacity, including those held on behalf of or belonging to a client. This account is monitored by the Florida Bar Rule 5-1.1 Trust Account. It is not money that belongs to me – It belongs to the client…”
IV. CONCLUSION
Complainant respectfully requests that the Florida Bar investigate Benjamin R. Alvarez, Jorge L. Carbonell, and Roniel J. Rodriguez for violations of the Rules Regulating the Florida Bar, and fashion sanctions the Bar deems appropriate.