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ROBLES ROBBERY
A crooked lawyer lives the high life while his clients die destitute.
When asbestos lawyers get greedy, an overwhelmed judiciary is often unable
to prevent misdeeds that can include inflated bills, payments to dummy companies,
bribery, conspiracy, the kind of fraud highlighted in Judge Janis Jack’s
stunning order,[201] and even outright theft. The ultimate
victims are the truly sick left destitute, even though the supposed villain—big
business—has paid large settlements.
One Miami case in particular should shock the conscience. Attorney Louis Robles
was convicted of pocketing $13.5 million in payments made by asbestos defendants
to benefit his sick clients. The total losses, however, could be some multiple
of that, because the deceit continued for years before investigations of complaints
to authorities bore fruit.[202]
A Vast System of Deceit
Robles collected $164 million between January 1, 1989, and September 30, 2002,[203]
but how much of that actually reached his more than 7,000 clients[204]
may never be known. Besides grossly inflating his legal bills,[205]
Robles admitted taking from trust funds over $13.5 million that would have gone
to almost 4,400 claimants nationwide.[206]
 Before
looting his clients’ trust accounts outright, Robles charged fees[207]
and expenses[208] that totaled as much as 63 percent of
the settlements. [209] Those sums included $10 million
paid to a dummy “outside” computer firm he owned, $6.9 million in
“file storage fees,” $2.1 million as a “set-up/investigation
fee,” and $1.2 million for travel.[210] Robles also
secretly extracted millions of dollars in so-called accruedinterest charges—a
percentage of already inflated expenses that was added to bills while cases
awaited settlement.[211] According to the U.S. Attorney’s
statement accompanying Robles’s guilty plea, the lawyer would misappropriate
settlement proceeds from one group of clients, and then to quiet their complaints
about the resulting delay in payment, he would finally pay them, in pyramid-like
fashion, with the settlement proceeds owed other clients. His delays in making
payments naturally produced delays in his clients’ payment of expenses,
on which Robles shamelessly imposed interest charges.
The Florida bar had serious complaints about Robles in hand by 1999, yet it
did not file a formal disciplinary complaint until May 16, 2001, and Robles
was not suspended until February 19, 2003.[212] He was
finally disbarred on May 15, 2003, and it would be another which Robles would
serve a ten-year prison term, he was given, on December 4, 2007, a 15-year sentence,[213]
after pleading guilty to three counts of mail fraud.[214]
Lifestyle of the Rich and Infamous
Robles admitted pocketing over $13.5 million that would have gone to almost 4,400 claimants nationwide.
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At his plea allocution, Robles declared, “I am truly sorry.” But
prosecutors did not fail to point out that “Robles sought out clients who
were dying and cheated them out of millions of dollars, so that he could finance
his own extravagant lifestyle.”[215]
Just how extravagant? From 1999 to September 30, 2002, the amounts Robles looted
from client trust funds ballooned from about $6 million to over $13 million.[216]
That princely sum covered Robles’s $2 million in annual living expenses,
including almost $600,000 in mortgage payments on a 9,000-square-foot Key Biscayne
waterfront mansion, plus the cost of limousines, private jets, and apartments
in New York and Los Angeles.
He blew millions more producing bizarre movies and records.[217]
In 1999, Louis and his wife were the executive producers of the bomb Love
God, a tale of “a nearsighted, epileptic schizophrenic with a history
of suicide attempts and public masturbation,” who, after getting out of
the loony bin, goes to live in a hotel where giant worms crawl out of the toilet
and “rip off stray jewelry with extensor suction tongues.”[218]
It should be no surprise that it received neither an MPAA rating nor a U.S.
video-store release.[219]
Insider Deals Make It Worse
Before Robles’s disbarment and indictment, his firms borrowed over $3
million from Core Funding Group LLC.[220] In the bankruptcy
of Robles personally as well as the two firms with which he was affiliated,
the Robles entities, now consolidated, were ordered to pay Core $3.75 million,
representing the loan’s unpaid principal plus unpaid accrued interest.[221]
VICTIMS SPEAK OUT
These are sampling of the over 100 pages of comments filed to the court
by a Robles’s victims and relatives prior to his sentencing.
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Attorneys and consultants in the Robles bankruptcy racked up over $1 million
in bills,[222] money unavailable to compensate victims.
Lawyers for the trustee are still billing up to $420 an hour; paralegals, up
to $135.[223] There’s even a $4,958 bill for legal
work involving the setting of fees.[224]
If that wasn’t bad enough, the court has authorized the trustee in the
case, who complained of the costs of storage, to start destroying Robles’s
files.[225] In perhaps the ultimate insult, the high-flying
Robles, now bankrupt, was represented by federal public defenders,[226]
though he had earlier been able to post a $1 million bond.
What Do the Victims Get?
Before Robles’s sentencing, victims and their relatives were offered a
chance to file comments with the court. The more than 100 pages they submitted
included an offer to serve as judge and executioner; many accounts of victims
dying destitute; and perhaps most poignant, a simple question: “Are widows
allowed any reimbursement? I don’t understand any of this.” Another
widow simply returned a letter that was addressed to her late husband, noting
the date he had died (see box).[227]
The tales of Robles’s real victims are in these court files—heartbreaking
tales of people who really suffered, whose claims were paid by companies that
did the right thing but who never received proper medical treatment or money
that would have provided a decent life for their spouses and children.
Ronnie and Dorothy Thomas of Caddo Mills, a small town northeast of Dallas,
started building their retirement home, expecting that money resulting from
settlement negotiations Robles claimed to have started would help pay for it.
With only the garage finished, Ronnie became too ill from asbestosis to continue
working. The settlement money they were counting on never arrived.
“It breaks my heart thinking of [Ronnie] having to spend his final years
living in this garage, but that is how things turned out,” Mrs. Thomas
wrote. “It is where I still live today, with no hope of ever being able
to finish the house. While Mr. Robles has led a life of wealth and excess, many
of his victims have suffered and died in poverty, my late husband among them,”
she told the judge who decided Robles’s sentence.[228]
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201. See Order in the Court, supra pp. 12-13.
202. See infra notes 203-28 and accompanying text.
203. USA v. Robles, No. 06-20286 (S.D. Fla. May 11, 2006) (Doc. 3, Indictment
¶ 10).
204. No. 06-20286 (Doc. 129, Factual Basis in Support of Entry of Guilty Plea
¶ 4).
205. Robles billed clients on behalf of an “outside company” that
was supposedly handling the “extraordinary computer and data processing
needs” demanded by the “sheer complexity” of the litigation.
The firm was actually part of the Robles business and legal network, but clients
were never told. Florida Bar v. Robles, No. SC-01-051 (Fla. 2003). Other bills
found to be illegal or questionable by the state bar association included seven
different charges for X-ray screenings that were supposed to be free, even $1
allocated for electricity. Bar v. Robles (initial complaint). Alicia Vale, special
counsel to the U.S. Attorney in Miami, confirmed in a telephone interview on
Sept. 24, 2007, that the
$13.5 million figure covered only money “directly diverted from client
accounts,” not inflated billing or other practices. She said prosecutors
have not made a comprehensive estimate of the total loss to victims.
206. No. 06-20286 (Doc. 129, Factual Basis in Support of Entry of Guilty Plea
¶ 19).
207. Such fees were limited by law or contract to 33 to 40 percent. See note
205. See No. SC-01-051.
208. See id. Such fees were limited by contract to 10 percent. See
note 205.
209. See id. (initial complaint ¶ 72).
210. Such fees were imposed 1.6 million times by Robles’s law firms. In
re: Appointment of Inventory Attorney for Louis Steven Robles, No. 03-11-CA
60 (Cir. Ct. Fla.) (exh. A).
211. See note 205.
212. No. SC-01-051 (Order of the Supreme Court of Florida) (granting motion
for emergency suspension).
213. No. 06-20286 (Doc. 143).
214. Id. (Doc. 3).
215. Associated Press, Former Attorney Gets 15 Years for Stealing Asbestos
Settlements, Naples News, Dec. 4, 2007; John Pacenti, Fla. Attorney Sentenced
to 15 Years in Prison for Bilking Elderly Clients Out of $13M, Daily Bus. Rev.,
Dec. 7, 2007.
216. No. 06-20286 (Doc. 129, Factual Basis in Support of Entry of Guilty Plea
¶ 14).
217. Id. at ¶ 15.
218. Vanessa Blum, S. Fla. Attorney Pleads Guilty in $13.5 Million Theft,
South Florida Sun Sentinel, Sept. 19, 2007; Movie Synopsis, Hollywood.com, accessed
at http://www.hollywood.com/moviedetail/Love_God/168698
(last accessed Sept. 23, 2007).
219. Adam Groves, The Cutting Edge, Fright Sight, www.fright.com/edge/lovegod.html
(last accessed on Sept. 23, 2007).
220. In re: The Robles Law Center, P.A., and Louis B. Robles, P.A., Nos. 04-16685,
16686 (Bankr. S.D. Fla.). Both the history of the case and the loan from Core
Funding Group are detailed in a settlement agreement filed July 23, 2007.
221. See id. (Doc. 348). The deal sets up a complex payment schedule giving
Core a fixed share of the estate’s income; if that doesn’t pay off
the debt in full by the time there are funds to pay unsecured creditors, Core
gets to file an unsecured claim for a share of that money.
222. An analysis by the author of bills submitted by attorneys for the trustee,
their financial and other advisors, and consultants, and for their expenses
in the bankruptcy cases of the two law firms with which Robles was affiliated
(No. 04-16685 (Bankr. S.D. Fla.) (six consolidated for administration)) shows
that attorneys billed the estate $1.025 million. The bills included $640,220.26
in attorney fees and expenses, of which $505,900 was approved; and $385,257.43
in fees and expenses for accountants, data management consultants, and financial
consultants, of which $81,832.29 had been approved as of Sept. 18, 2007. A 20
percent holdback was imposed on the fees but can be sought when the proceedings
conclude, and hearings on some fees and expenses had not yet been scheduled
as of that date.
223. No. 04-16685 (Summary of Third Interim Application for Allowance and Payment
of Compensation, at 17).
224. Id. (Fee Summary Attachment, at 11).
225. Id. (Docs. 318, 332). Certain parties had the right to protect certain
documents from shredding; others had 30 days to seek exemptions for documents
that the trustee would otherwise be allowed to shred. After that period the
trustee was free to shred whichever documents had not been exempted.
226. No. 06-20286 (May 25, 2006) (Docket item No. 9) (Order).
227. Id. (Doc. 78).
228. Id. (Doc. 78, at 91).
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