Lewis B. Freeman - Hess Kennedy
Date: Thu, 03/11/2010 - 12:24
BY JAY WEAVER
[EMAIL="jweaver@MiamiHerald.com"][/EMAIL]
Miami accountant Lewis Freeman, who for years garnered the reputation of a trusted civic leader, pleaded guilty Wednesday to a federal fraud charge alleging he embezzled at least $2.6 million from client trust accounts over the past decade.
Freeman, a University of Miami law school graduate and big-time booster of his alma mater, admitted he stole the money from people he was supposed to protect as a court-appointed receiver who specialized in recovering assets in fraud and bankruptcy cases.
For Freeman, who moved to South Florida from upstate New York to attend UM in the late 1960s, the criminal prosecution marks the crushing end to a successful professional career that had won him respect in legal, business and academic circles.
Assistant U.S. Attorney Andrew Levi said Freeman ``betrayed both the courts that appointed him and the people he was responsible for protecting.''
But before Freeman formally entered his guilty plea to the mail-fraud conspiracy, Levi said for the first time that Freeman also took money from his accounting business to pay back investors whom he had ripped off dating back to the mid-1990s.
Levi said Freeman stole hundreds of thousands of dollars from investment retirement accounts under his control. He said Freeman, in one instance, covered up the theft by raiding client trust accounts to put the money into an investor's brokerage account.
Lewis B. Freeman Tried To Steal From Hess Kennedy
Lewis Freeman made some desperate phone calls to friends and family last August.
The attorney-accountant had to hustle to make up for a $1 million shortfall in court-supervised accounts. It turned out he had been moving money around from his receivership and trustee cases for more than a decade, pilfering $2.6 million from creditors and victims of fraud in the process.
Freeman unsuccessfully attempted to take $1.5 million from his firm's receivership of Hess Kennedy, a debt settlement law firm closed down by Florida attorney general's office, Assistant U.S. Attorney Andrew Levi told U.S. District Judge Paul C. Huck.
Employee co-conspirators who helped their boss embezzle money or cover up the thefts are expected to be charged, according to the criminal information filed last month. Both are expected to face charges.
Everything came crashing down on Freeman last August. The Internal Revenue Service claimed he owed $4.5 million for allegedly promoting a pre-tax employee parking deduction program with employers. The IRS maintains the parking program was a tax dodge used by nearly 5,000 taxpayers.
And Freeman was scrambling to make up for money missing from receivership and trustee accounts. He turned to friends and family to loan him $1 million.
"Ultimately, this was not enough to make up for all the deficiencies his theft had created," Levi told the court. Freeman also "unsuccessfully attempted to steal $1.5 million from the Hess Kennedy fiduciary account in order to cover shortfalls created by his other theft."
Attorney Daniel Stermer, one of Freeman's top staff members, had been appointed receiver in the Hess Kennedy case, which had more than $100 million in claims. Levi would not answer questions regarding Stermer.
Stermer attorney Richard Rosenbaum with Arnstein & Lehr in Fort Lauderdale said Stermer has not been implicated in Freeman's wrongdoing.
