Miami Lawyer Wins $22M Judgment for Venezuelan Company Over Civil Theft

Edward H. Davis Jr. of Sequor Law argued that Miami businessman Luis Wolkowiez stole $8.6 million from Venezuelan finance company All Factoring, and the court agreed.


By Raychel Lean

Edward H. Davis Jr. of Sequor Law in Miami landed a $22 million judgment for a South American finance company after the court found that Venezuelan businessman Luis Wolkowiez had wrongly taken money from it — allegedly to settle a debt a Miami resident owed him.

But Miami-Dade Circuit Judge Pedro P. Echarte didn’t buy that explanation, branding Wolkowiez’s actions civil theft.

The international fraud case arrived in Miami-Dade Circuit Court in April 2013, with All Factoring de Venezuela, a finance company that helps businesses with cash flow problems, reporting a monetary predicament of its own.

The company lawyered up after losing 130 million Venezuelan bolivars to Wolkowiez and his company, Inversiones 01590 C.A. in December 2012. According to Davis, that loss equaled about $8.6 million at the time, but as of Jan. 7, it was worth only $2.30 because of skyrocketing inflation in Venezuela.

The case involved a short-term loan agreement between All Factoring and Miami resident Jorge Reyes, a broker for Atmosphere Fund.

All Factoring sells invoices from manufacturing companies and other businesses to outside parties, helping clients get quick cash to pay bills
and profiting from the difference. Under its deal with Reyes, All Factoring sent more than 234 million bolivars to a bank account for which Wolkowiez was custodian. The money was supposed to have remained in that account for less than 30 days, before it was returned in the currency of All Factoring’s choosing — dollars — to the tune of $15.5 million.

Both parties canceled the contract, realizing that it would take longer than 30 days to repay, and agreed to a refund.

‘That’s Insane’

Wolkowiez, as custodian, gave back about $6.9 million but kept the remaining $8.6 million because Reyes, a broker, allegedly owed him money from another deal.

It was an argument that Davis found hard to grasp.

“Just because some other guy owes you money, you can’t take some total stranger’s money and pay yourself back,” Davis said. “That’s insane.”

Davis wasn’t alone in his confusion, as the court found that Wolkowiez’s testimony was “not at all credible,” meaning Reyes may never have even owed him any money. Reyes was not to blame, according to the judgment, having only repeated what Wolkowiez had told him — not knowing it was a false promise.

Reyes, who appeared pro se, and Wolkowiez’s lawyer, Coral Gables attorney Robert M. Miller, did not respond to requests for comment before deadline.

The loss hit All Factoring hard, according to the judgment — causing it to lose credibility, lay off employees and fail to pay certain clients, one of whom committed suicide after losing money.

The original complaint alleged unjust enrichment, conversion, civil theft and fraudulent misrepresentation, and made claims against several more defendants that were eventually dismissed or sent into bankruptcy court.

The case landed in Miami because it involved several Miami residents, including Reyes and Wolkowiez, who handled all the negotiations from Miami.

There was one defendant who got away, according to Davis — Colombian broker Ricardo Ripepi.

“We sued him but we couldn’t find him,” Davis said.

Tracking down defendants was the toughest part of the litigation for Davis, who said it took two years of trying before serving one defendant at an airport in Spain. Gathering evidence from Latin American countries also meant extra time and money spent translating videos, phone calls and documents.

Davis has asked for more than $1.4 million in attorney fees and costs, and the defense has until Friday to oppose before the court will rule.

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8 Florida Cases to Watch in 2019

At the top of 2019, which Florida cases have lawyers checking dockets with bated breath? Here’s a look at eight cases that have gripped local litigators. Where…

By Raychel Lean

At the top of 2019, which Florida cases have lawyers checking dockets with bated breath? Here’s a look at eight cases that have gripped local litigators.

Where can a Florida-based company sue its out-of-state employees?

Miami business litigator Eric Ostroff, partner at Meland Russin & Budwick, has his eye on Citrix Systems Inc. v. Matthew Ware et al. Chief Broward Circuit Judge Jack Tuter will soon hold a hearing on the case, which tackles the question of personal jurisdiction when it comes to remote employees.

In 2017, Fort Lauderdale-based tech company Citrix Systems Inc. sued seven former employees who worked from North Carolina when they left to work for a competitor. The suit accused the staff of misappropriating trade secrets and breaching a contract that included a covenant not to compete. But the employees argue Florida doesn’t have jurisdiction over them.

Do foreign governments take precedence over state courts?

Former Florida Supreme Court Justice Raoul Cantero is among a group of Miami lawyers challenging a Third DCA ruling they say could result in Florida courts having to submit to totalitarian regimes.

The Ecuadorean government sued two brothers in Miami for allegedly embezzling about $662 million from Filanbanco, the bank where they were administrators. The suit — Republic of Ecuador v. Roberto Isaias Dassum and William Isaias Dassum — was initially dismissed for lack of standing and expired statute of limitations, but the appeals court reversed the move.

International litigator Arnoldo B. Lacayo of Sequor Law, Miami, said the case is a crucial one for international practitioners, as it asks whether acts in another sovereign state are valid in Florida’s courts.

Could this case reveal Bitcoin creator’s identity?

Dave Kleiman v. Craig Wright, an $11.4 million bitcoin trial will play out in Miami federal court in September, is almost certain to raise eyebrows. Kleiman’s suit accuses his Australian former business partner of committing forgery and filing false documents to take control of bitcoin. Wright has claimed to be Satoshi Nakamoto, mysterious creator of the cryptocurrency, but that claim has never been verified.

Complex litigator Daniel Maland at Kozyak, Tropin and Throckmorton is watching closely and says bitcoin transaction logs indicate that Nakamoto is one of the richest people in the world.

According to Alan Rosenberg with Markowitz Ringel Trusty + Hartog, the vast size and scope of the case could serve as a roadmap for future cryptocurrency litigation.

Will a key ADA ruling be overturned?

Juan Carlos Gil v. Winn Dixie, an Americans with Disabilities Act lawsuit pending in the Eleventh Circuit Court of Appeals, could unravel or affirm a landmark 2017 ruling that found a supermarket’s website violated blind internet users’ rights and laid the groundwork for an influx of website- accessibility lawsuits.

The court will consider Winn-Dixie’s appeal that websites are not places of public accommodation and that the supermarket is in compliance with the ADA. Commercial litigators Michael Landen of Kluger Kaplan and Jason Kellogg, partner at Levine Kellogg Lehman Schneider & Grossman, said many of their clients in the business world are waiting in suspense.

Can school shooting victims sue rifle makers?

The family of a victim of the Parkland shooting at Marjory Stoneman Douglas High School on Valentine’s Day in 2017 has sued Smith and Wesson, makers of the AR-15 semi-automatic rifle used in the attack. Miami firm Podhurst Orseck represents the plaintiff.

The court heard the defense’s motion to dismiss Jamie Guttenberg et al v. Smith and Wesson in December, and is expected to rule in a few weeks.

Has a Miami church breached its lease?

The Miami-Dade Property Appraiser has claimed Brickell’s First Presbyterian Church of Miami is violating its religious exemption status by leasing some of its grounds to a for-profit school and food trucks.

The case could have wide implications for developers and religious institutions, according to Franklin Zemel, a partner at Saul Ewing Arnstein & Lehr, who represents dozens of churches, synagogues and mosques around the country.

The Church claims it’s not leasing but merely “outsourcing” the administration of its school.

“Why is the characterization so important? Because in order to qualify for the tax exemption, there must be unity between the owner of the property and the user of the property,” Zemel said.

Will Florida courts embrace cannabis?

According to Kathi Giddings, deputy chair of Akerman’s Litigation Practice Group, cannabis is set to be a hot topic this year. Several appeals are pending in the First District Court of Appeal concerning the 2016 general election, in which Floridians voted to broaden the use of medical marijuana.

The legislature has restricted who can cultivate, process, sell and smoke medical marijuana, but the lawsuits argue otherwise. Akerman represents medical marijuana center Florigrown in one of those cases, and recently obtained an injunction against the Department of Health.

Will Florida courts side with EB-5 Investors alleging fraud?

A group of 78 Chinese investors sued Nicholas Mastroianni II, a high-profile EB-5 investment broker with ties to former Trump lawyer Michael Cohen. In a Palm Beach Court filing, the plaintiffs claimed Mastroianni cheated them out of almost $100 million in a real estate venture, but Mastroianni has rejected the suit as a “sham.”

Jeffrey Schneider, managing partner at Levine Kellogg Lehman Schneider + Grossman, who filed the suit, said the case could send a strong message to the EB-5 industry about promises made to investors.

“This case is important at a time when developers have completed their projects and are now expected to return the EB-5 money back that they ‘borrowed’ from the EB-5 investors,” Schneider said.

It’s hard to say which way the courts will rule, so observers must stay tuned for updates on these cases throughout the year.

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