When Nevin Shapiro wanted to finance his Ponzi scheme or buy a sports agency, he turned for help to a childhood friend from Miami Beach: Marc Levinson, a tobacco litigator at Shook Hardy & Bacon, according to a negligence lawsuit.
The 92-page lawsuit was filed by the court-appointed bankruptcy trustee for Shapiro’s defunct company, Capitol Investments USA Inc. in state court last month and removed to U.S. District Court in Miami this month before Judge Jose Martinez.
The lawsuit is replete with accusations of illegal gambling, parties attended by prostitutes and allegations that the law firm helped facilitate Shapiro’s $930 million Ponzi scheme. Shapiro is serving a 20-year prison sentence while the NCAA decides how to punish the University of Miami for Shapiro’s admittedly vigorous boosterism.
The 12-count complaint alleges negligence, negligent supervision and control, aiding and abetting fraud, aiding and abetting breach of fiduciary duty, fraudulent and negligent misrepresentation and securities violations.
“We are disappointed that this matter has advanced to litigation,” the firm said in a statement late Monday. “We will diligently defend ourselves in this case and will continue our commitment to resolve any issues that arise in a reasonable, judicious and professional manner.”
The law firm repeatedly rejected the trustee’s allegations of wrongdoing in an answer filed last Friday by the firm’s attorney, Deborah S. Corbishley of Kenny Nachwalter in Miami. She did not respond to a message for comment by deadline.
The lawsuit refers to a Shook Hardy partner and supervising attorney in the Miami office who were responsible for Levinson’s work. Neither is identified by name but are described as related “nonparties.”
The lawsuit filed by trustee Joel Tabas of Tabas, Freedman, Soloff, Brown & Rigali in Miami maintains Shook Hardy was Shapiro’s “principal legal adviser for all of his business interests,” including the lead company in his fraud scheme, and his “de facto general counsel” as loans were sought, financial presentations were made and suggestions were made for criminal and securities counsel.
A message left for Levinson at the firm was not returned by deadline.
The lawsuit weaves a tale of inseparable childhood friends who allegedly became key players in a major fraud that as a sidelight caused another black eye for UM athletics.
“Shapiro shared all aspects of his business dealings with Levinson” as well as personal interaction, including his gambling addiction and partying with UM athletes at Shapiro’s Miami Beach mansion, on his yacht and at nightclubs, according to the lawsuit.
Levinson and Shapiro met when they were 6 years old, became soccer buddies and remained close as Shapiro hosted Levinson’s 2002 bachelor party at a hotel with more than 40 prostitutes and up to 20 student-athletes. A group of friends was known as the “rat pack,” which included Eric Sheppard. He developed the Canyon Ranch resort in Miami Beach. He invested in Shapiro’s scheme, losing $1.3 million and paying Tabas $700,000 to settle clawback litigation.
Shapiro and Levinson as adults became avid gamblers, placing large bets on sporting events, the lawsuit asserted. Levinson’s financial difficulties led to Shapiro arranging two loans from Sheppard to the lawyer for $15,000 and $25,000 from a Capitol lender. The lawsuit states $30,000 was never repaid.
“Shapiro would also provide Levinson tickets to UM football games while Shapiro was on the sidelines with UM athletes, invited Levinson to attend UM football games in Shapiro’s luxury box and provided Levinson Miami Heat tickets, including Shapiro’s floor seats,” the lawsuit said.
Levinson was key in helping set up Shapiro’s purchase of a sports agency, according to the lawsuit.
“Based upon his personal relationship with Shapiro, Levinson stepped outside of his legal specialization and experience and become the attorney primarily responsible for SHB (the firm’s) client relationship with Shapiro and Capitol,” the lawsuit said.
Coral Gables attorney Maria Elena Perez, who represents Shapiro, said Levinson should have known it was against state law for a college booster to become a sports agent.
Perez is attempting to secure a sentence reduction for Shapiro in his criminal case, which was brought by federal authorities in New Jersey.
The NCAA last week acknowledged that its investigation into UM was tainted because it broke its own rules by paying Perez for some of her work on behalf of Shapiro. Perez reiterated Tuesday that she is the NCAA’s “patsy” and that the work she performed always was in the best interest of her client. Among other things, Perez observed a bankruptcy court deposition and forwarded notes to the NCAA.
The suit brought by Tabas maintains Shook Hardy knew Shapiro was breaking NCAA rules by entertaining UM players at Shapiro’s expense.
From there, the lawsuit alleges the Shook Hardy law firm recommended Shapiro create a middleman to distance himself “from personal liability for his criminal activities.”
In an unusual turn, Tabas has obtained notes from Lewis Tein attorneys Guy Lewis and Michael Tein from a 2007 meeting with Shapiro and Levinson after the Miami Beach millionaire retained them as criminal counsel.
Gary Freedman, Tabas’ attorney and law partner, states in the complaint that Lewis compared Shapiro’s Capitol Investments to Premium Sales Corp., a notorious South Florida grocery-trading fraud that cost investors an estimated $265 million in the 1990s.
Lewis Tein represented Shapiro when he testified as a witness for the government in the La Bamba Check Cashing money-laundering scandal.
Shapiro replaced Lewis Tein with Perez after he was indicted in New Jersey in the Capitol Investments scam.
Am Law Daily reporter Sara Randazzo conributed to this story.