Attorney-Trustee Charged With Wire Fraud
for Looting Millions Fromn Accounts of Clients

By John Pacenti
Daily Business Review
New York Lawyer
February 23, 2010

MIAMI - Attorney-accountant Lewis Freeman, for years a favorite when judges were ready to name receivers and trustees, was charged today with wire fraud for allegedly skimming funds from the accounts he controlled under court appointments.

Freeman was charged by criminal information, indicating a plea deal has been arranged. The single count carries a maximum 20-year prison sentence by law. He was set for an initial appearance this afternoon before U.S. Magistrate Judge Robert Dube, and the case was assigned to U.S. District Judge Ursula Ungaro for plea or trial.

The Miami and Plantation offices of Lewis B. Freeman & Partners were raided by the FBI last October after investigators said they were trying to trace $3.6 million in accounts controlled by Freeman. The information charges he illegally cashed 162 checks worth a total of $2.6 million since 2000.

"Lew Freeman made serious mistakes in the way he ran his business," said Joseph DeMaria, one of Freeman’s criminal defense attorneys. "Lew cooperated immediately and fully."

Freeman, who has an outsized personality, was always willing to talk about the companies he operated and the world of receivers and trustees parachuting into failing companies and ventures ridden by fraud to recover as much as possible for investors.

He lived a showy lifestyle in an eight-bedroom, 5,800-square-foot home in Miami’s Coconut Grove neighborhood with an estimated market value of $1.38 million, according to the Miami-Dade County property appraiser’s records.

Top South Florida Money Sleuth
 Now Faces His Own Scandal

By Jay Weaver
The Miami Herald
Oct. 28, 2009

Lew Freeman may have been leading a double life for years.

The public knows him as affable, funny, charitable -- a friend of the legal establishment, children's causes and his alma mater, the University of Miami. He was even the campaign treasurer for Miami mayoral candidate Joe Sanchez, who once worked for him.

In private, the go-to forensic accountant, who made his name investigating companies crippled by bankruptcy or fraud, is suspected of stealing from the very victims he was

Lewis B. Freeman made his name investigating  appointed by judges to protect.
companies crippled by bankruptcy or fraud.         Authorities, who are crafting embezzlement charges, believe he stole at least $3.6 million from the accounts of several failed businesses once under his company's control, according to sources familiar with the probe.

Until the FBI seized his business records earlier this month, Freeman, 60, was clueless about the investigation. But just weeks before that dark day, Freeman was scrambling to keep his company afloat by borrowing about $1.4 million from family and friends against the equity in his eight-bedroom, five-bathroom Coconut Grove home, court records show. The property is now on the market for $2.2 million.

After the federal raid, the accountant dissolved his 30-plus employee company, Lewis B. Freeman & Partners, which had grown rapidly from Miami to other major cities during the economic meltdown -- normally good times for his type of trade.

"This case is about a forensic accountant who faced financial obligations that he could not meet,'' according to a statement issued by Freeman's lawyers. "He has cooperated from Day One with the new receiver [of his company] and he is preparing to answer all of the U.S. attorney's questions.''

The criminal allegations boggle the minds of many in Miami's legal, business and charity circles. Those who benefited from his generosity said the accusations are a side of Freeman they didn't know -- until now.

"I've just known him as a good person with a big heart,'' said Deborah Spiegelman, executive director of Miami Children's Museum, where Freeman once served on the board of directors. "When he had a passion, he encouraged others to support what he cared about,'' including raising money to build the museum on Watson Island.

The University of Miami -- which honored Freeman as its alumnus of the year in 2005, mainly for landing the lead sponsor for the first-ever presidential debate held at UM -- issued a statement of support.

"I am saddened by the allegations of wrongdoing,'' said Sergio M. Gonzalez, senior vice president for UM's advancement and external affairs. "Lew has been a good friend and supporter of the university and many community organizations for years.''

Freeman, an upstate New York native who moved south to attend the University of Miami in the late 1960s and then obtained a law degree there, found his niche as a forensic accountant examining businesses ruined by insolvency, mismanagement or fraud. The goal is to uncover any assets to repay creditors or victims.

What's unclear is why Freeman, at the peak of his profession, may have taken millions from his firm's receivership accounts -- aside from propping up his company, of which he is the sole shareholder.

He and his wife, Eddi-Ann, a speech pathologist, enjoyed an affluent Miami lifestyle: a 6,000-square-foot, Spanish-style residence, leased Lexus and Mercedes cars, private schools for now-grown children, and vacations to Europe and Colorado. To those who knew him, Freeman seemed like a "regular guy'' who mixed business with pleasure, with a penchant for picking up the tab.

But by all outward appearances, his upper-class lifestyle didn't seem to compare to the ostentatious habits of Miami's one-time high-fliers: S&L banker David Paul, tort lawyer Louis Robles, and healthcare entrepreneurs, Carlos and Jorge de Cespedes -- all convicted and sentenced to lengthy prison terms.

But like them, Freeman, who built his reputation as an honest sleuth recovering millions of dollars for creditors and victims of fraud, now faces a potential prison sentence for alleged theft.

Freeman was the founder of the Florida Receivers Forum, an organization that promotes ethics in the profession. This year, he was often quoted in the media about investor Bernard Madoff's $65 billion Ponzi scheme, the largest in history.

A 2004 profile of Freeman by SouthFloridaCEO Magazine was titled "`The Science of Dead Money,'' followed by a flattering introduction: "If there is a scandal in South Florida involving absconded money, you can bet Lewis Freeman is on the case -- or should be.''

Freeman likened forensic accounting to "financial autopsies,'' comparing himself to Quincy, the fictional medical examiner on TV.

Freeman also declared: "I don't care if you're Tyco or WorldCom or Enron, accounting is purely bookkeeping -- where the money came from and where the money went to. There is always a trail.''

Which might explain why Freeman plans to cooperate with the FBI and U.S. attorney's office in Miami. Federal authorities are investigating alleged embezzlement of receivership accounts -- money owed to creditors. He is suspected of moving those assets between accounts and writing checks to his business and himself, sources said.

In mid-October, Freeman dissolved his company and petitioned the Miami-Dade Circuit Court to appoint an independent receiver. Kenneth Welt was chosen to wind up the affairs of the business. Freeman also resigned as the receiver in at least six ongoing cases, including the defunct Boca Raton Internet firm, Professional Resource Systems Inc.

Behind the scenes, defense attorney Robert Josefsberg, along with lawyers Joseph DeMaria and Thomas Tew, are trying to rebuild the financial trail of Freeman's company. They face obstacles because the FBI seized all of Freeman's records and computers from his Coconut Grove and Plantation offices.

Freeman and his firm, appointed by state and federal judges, have worked as receivers on hundreds of cases over the past two decades.

Among the biggest: E.S. Bankest, a financial services company that bilked about $165 million out of Banco Espirito Santo.

Freeman, known for his pithy quotes, told SouthFloridaCEO Magazine that the Bankest case was like a "bowl of spaghetti.''

"You've got all of this pasta intertwined, and you've got to find the beginning and the end -- and each one has a story,'' he said.

Freeman did such a good job unraveling it all that federal prosecutors used him as an expert witness in 2007 to win convictions of Bankest's top executives.

Now those same prosecutors are crafting a criminal case against Freeman.

Miami Herald staff writers Larry Lebowitz and Chuck Rabin contributed to this report.

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