RECEIVER PLEADS GUILTY TO 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 today that defendant Lewis B. Freeman, pled guilty before the U.S. District Court Judge Paul C. Huck to a one-count Information charging him with conspiracy to commit mail fraud, in violation of Title 18, United States Code, Section 1349.
Freeman is scheduled to be sentenced on May 13, 2010. At sentencing, Freeman faces a statutory maximum of 20 years in prison.
According to the Information and statements made in court today, during at least the last 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, Freeman engaged in a long-term scheme to misappropriate funds from the matters he was appointed to oversee.
According to his plea and as charged in 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.
During today’s hearing, Freeman admitted that 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 The unauthorized checks were deposited into LBFP’S operating account, and the funds were subsequently withdrawn by Freeman and used to support a lavish lifestyle, including paying for extravagant vacations, clothing, and expensive home renovations and redecorating. Some of the money was also donated to charity to promote Freeman’s business, LBFP.
A portion of the misappropriated funds were also used to pay back at least one individual from whom Freeman had misappropriated funds in the mid-1990's. Freeman misappropriated funds from this victim when he was managing his retirement account at his accounting firm.
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.
Mr. Sloman commended the investigative efforts of the FBI. The matter is being handled by Assistant U.S. Attorney Andrew K. Levi.
A copy of this press release may be found on the website of the United States Attorney's Office for the Southern District of Florida at http://www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at http://www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.