By Ralph De La Cruz
Florida Center for Investigative Reporting
This is as unlikely a sentiment as you might expect to find in 21st century America: Thank God for lawsuits.
Yep. The butt of jokes and bane of modern culture is proving useful in these days of strapped governments and hyper-reduced regulation.
There may not be people in jail as a result of the bank shenanigans that helped push the country to the edge of collapse, but a lot of folks may now be feeling a financial sting courtesy of courts. Call it O.J. Simpson justice.
There’s the fraud case filed by Attorney General Pam Bondi against Bank of New York Mellon in which it’s alleged that the bank grossly overcharged institutional customers such as Florida’s pension fund by manipulating currency exchange rates.
How “grossly”? Four other states and the Manhattan Attorney General joined the lawsuit, and they’re asking for $2 billion. The U.S. Department of Justice has also filed a separate lawsuit in the case. That’s $2 billion supposedly taken from the pensions of present and future retirees.
A whistleblower offered prosecutors a sobering look inside the bank’s practices. Among his testimony: a senior bank executive nicknamed “Rambo” told traders not to tell their customers how much the bank was making. We’re not talking about George-Bailey-Saves-Bedford-Falls kind of bankers here.
Bank of New York Mellon has pushed the edge of propriety to the point that academics are left trying to explain the difference between “puffery” and “fraud.”
The bank denies all allegations.
You might remember that this bank was also accused of committing fraud in its handling of mortgage pools. And it’s the same bank that gave CEO Robert P. Kelly a $17.2 million severance when he was pushed out.
Which might make you wonder: How did our state get into a relationship with these people?
And then there’s the case against the founders of CompUSA, the Fiorentino brothers.
The lawsuit was filed by the New York company that bought CompUSA in 2008 and the Miami company that was brought in to operate the electronics chain. The CompUSA case also relies on whistleblower testimony. Maybe our earlier praise should have gone to whistleblowers, not lawsuits.
The testimony alleges that Carl and Patrick Fiorentino used their positions to do stuff like steal millions in electronics (the company filed a police report in which it alleged the brothers stole $17 million in goods), set up friends and family with trips and other perks, and receive kickbacks from vendors.
“Carl Fiorentino is the poster child for personal greed and unethical corporate conduct, having intentionally stolen and wasted million of dollars of money and other assets,” the lawsuit asserts.
If that’s true, where does that leave Rambo?
Not to speak of Broward County lawyer Scott Rothstein, who is facing both criminal and civil charges for supposedly defrauding hundreds of investors out of billions. Fiorentino’s alleged $17 million theft is like a kid stealing a pack of gum compared to Rothstein’s Ponzi scheme transgressions.
He has reportedly confessed to blowing $150 million on a rock star lifestyle. And for more than a month, Rothstein has supposedly been singing like Tweety Bird in what The Miami Herald calls “The Big Deposition.” He has apparently provided information about bribes to politicians, judges and influence-peddlers, not to speak of his company’s downtown Fort Lauderdale Love Shack condo used to sexually service clients and all of the above.
According to the Herald, Rothstein “fingered so many colleagues and associates during his so-called Big Deposition that the federal criminal investigation could result in far more defendants than first envisioned, according to lawyers familiar with the evidence.”
Poster child? He bought the franchise.