Forget Tom Scott, if I were Judge Gold I would appoint the intrepid Julie Kay to figure out what the hail is happening here:
“I don’t know why it has risen to this level,” said Concepcion, lead counsel for the Elliotts. “This is one of those unfortunate cases where the animosity has spilled over to the attorneys.”
He tried to withdraw as counsel for lack of payment, but Gold refused to let him drop out.
Concepcion, who is facing a contempt hearing Sept. 18, is accused of lying to Gold by saying in open court that the Elliotts did not have any U.S. bank accounts. It later turned out they did and paid Concepcion from one.
In his declaration filed Wednesday opposing the plaintiffs’ motion for contempt and sanctions, Concepcion maintained he did not know his law firm received wire transfers from the Elliotts out of a Miami bank. Elliott testified that all his U.S. bank accounts had been closed.
“Neither I nor attorneys at CSM typically know the source of a wire transfer,” Concepcion said in an interview.
Concepcion’s co-counsel also filed declarations explaining why they should not be held in contempt or sanctioned.
Plaintiff attorneys in the case are also on the defensive. In documents filed last week, Concepcion asked for the disqualification of both Diaz and Piloto. He accuses Diaz of conspiring with Piloto, whom he terms Diaz’s girlfriend and the mother of his child, to file a separate lawsuit without disclosing their personal connection.
The purpose of a suit filed by a different attorney was to conceal the fact that Diaz was representing both sets of investors, according to the disqualification motion. Because one set of investors included EMI sales agents, Concepcion argues it was a conflict of interest for Diaz to represent both sets, which have been dubbed “the innocent investors” and the “impact investors,” who are sales agents including James Catledge.
“Diaz used Piloto as a front to avoid the appearance of impropriety arising from a conflict of interest between his then-clients, the innocent investors, and Catledge and his impact agent investors,” the motion states.
The agents have been sued separately throughout the country for participating in the alleged Ponzi scheme, according to the lawsuit. Concepcion’s motion claims Catledge conspired with Diaz to exploit a group of investors to take over their lawsuit, seize control of the Elliotts’ real estate and keep the agents from being lawsuit targets.
Concepcion argued that the two lawsuits mirror each other and clearly show the two firms are working hand in hand on the cases.
He also alleges attorneys for the investors took an expired asset-freeze order, issued by Gold, to the Turks and Caicos Islands and used it to obtain a temporary restraining order from the court there.
“After the Turks and Caicos court learned of the plaintiffs’ deceit, on April 9, 2009, the court discharged the TRO, stating, ‘This case causes me some disquiet,’ ” according to Concepcion’s motion.
The restraining orders froze the Elliotts’ assets and endangered the completion of renovations at a resort in the Dominican Republic, Concepcion stated. As a direct result, a bank is set to foreclose on several resorts owned by the Elliotts.
In a joint response to the disqualification motion, Diaz and Piloto called Concepcion’s allegations “gratuitious, speculative and completely devoid of merit.”
“Unable to defend their case on the merits, the Elliott defendants and their counsel continue to focus their energies on a litigation strategy directed at attacking the character and good name of plaintiff’s counsel,” their motion states.
A letter from Arthur Klein, general counsel for Arnstein & Lehr in Chicago, accompanied the motion. Addressing the issue of Piloto and Diaz’s relationship, Klein states: “In our judgment, your letter is inappropriate and unprofessional. We do not believe it merits a substantive response.”
Responding to the claim that the investors are responsible for pushing resorts into foreclosure, the plaintiffs say Elliott conceded his companies missed payments months before judicial liens were imposed in the Dominican Republic.
“The spuriousness of the Elliott defendant’s allegations is further demonstrated by the fact that it had been plaintiffs who notified the court of the foreclosures, and plaintiff attorneys have moved heaven and earth to do whatever they could to prevent the foreclosures from occurring,” the plaintiff attorneys said in opposing their disqualification.
In an interview, Piloto, an Arnstein & Lehr partner, said she and Diaz are no longer involved in a relationship.
“We stand by our papers,” she said. “Judge Gold is not going to be happy. He sees this for what it is.”
Piloto said Burr is motivated by a personal vendetta against the Diaz Reus law firm, where he used to work. The Daily Business Review reported in May that Burr resigned from Diaz Reus in 2007 “under less than amicable circumstances.” He also is suing Miami-based Astigarraga Davis for allegedly firing him because he is gay. The law firm strongly denies that allegation.
(BTW, that’s Hilda Piloto pictured above.)Let’s see — sex, money, vendettas, lawsuits, children, wire transfers from unknown locations, Tom Scott somehow, and the DR.
Kids, don’t tell our friend from Leesburg, but this is how we roll in Miami.