Tew Cardenas Partners Defeat $200 Million Accounting Malpractice Claim

Attorneys Thomas Tew and Joseph A. DeMaria Represented Rachlin Cohen & Holtz in Accounting Malpractice Case Stemming from Massive Tax Fraud Scheme

MIAMI--(BUSINESS WIRE)-- Tew Cardenas LLP partners Thomas Tew and Joseph A. DeMaria have defeated a $200 million accounting malpractice claim that had been filed against the South Florida accounting firm Rachlin Cohen & Holtz, LLP and Senior Partner Laurie S. Holtz.

Judge Gregory A. Presnell of the U.S. District Court, Middle District of Florida in Orlando entered an order on August 22, 2011, dismissing the case that was filed by bankruptcy liquidator R.W. Cuthill on behalf of a defunct Orlando company known as Mirabilis Ventures, Inc.

Mirabilis was one of several entities involved in a massive tax fraud controlled by Frank Amodeo involving misappropriated payroll taxes from professional employer organizations (PEOs). Rather than turning the taxes collected by the PEOs over to the IRS, Amodeo and his co-conspirators used the funds to purchase real estate, a Learjet, automobiles, and other property. Amodeo pled guilty and was sentenced to 22 ½ years in prison and ordered to pay restitution to the IRS of approximately $180 million for his role in the scheme. Mirabilis was also convicted for conspiring with Amodeo and was ordered to pay $200 million as restitution and forfeiture based on its criminal conviction.

Cuthill filed suits against two law firms and two accounting firms, including the former Rachlin Cohen & Holtz firm. The complaints blamed the professionals for Mirabilis’s criminal conduct and sought $200 million in damages.

Following a June 24th evidentiary hearing, Judge Presnell entered two orders that excluded Plaintiff’s liability expert and then excluded Mirabilis’s $200 million damages claim. Shortly after the orders were entered, Cuthill obtained permission to request that the case be dismissed.

Plaintiff had hired a nationally recognized accounting expert to support Mirabilis’s accounting malpractice claim. During a Daubert hearing, Thomas Tew cross-examined the Plaintiff’s expert to show that there was no basis to support his opinion. He successfully argued that Rachlin was not Mirabilis’s auditor nor did it violate its duties to the company. On July 14, 2011, Judge Presnell entered the order barring Plaintiff’s expert from testifying at trial. See 2011 WL 2784105.

The second part of the hearing addressed the defendant’s challenge to Mirabilis’s $200 million damages claim. Joseph DeMaria cross-examined Cuthill to establish that the damages claim was unsupportable. On July 28, the Court excluded the damages claim and held that: “Mirabilis relied on a bogus calculation on the $200 million allowed claim and failed to produce any evidence supporting it.” See 2011 WL 3236027.

The Tew Cardenas partners stated that the combination of the willingness of the defendants and their insurers to fight to prove the truth, and the Court’s willingness to take the time before trial to consider these defenses, led to this positive result.

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Kreps/De MariaSissy De Maria or Cindi Perantoni, 305-663-3543
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Source: Tew Cardenas LLP