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A former Miami executive of defunct Banco Latino International is close to being reimbursed for $1.2 million in legal fees he spent to successfully defend himself against fraud charges brought against him by Venezuelan regulators. Gustavo Gomez Lopez is experiencing a reversal of fortune after nearly a decade of fighting allegations in a Miami federal courtroom. Gomez Lopez is the former chairman of the shuttered Edge Act institution in Miami that filed for Chapter 11 bankruptcy protection in January 1994. A run on deposits had forced the Venezuelan bank’s Brickell Avenue office to close. At the time, Banco Latino International was a U.S. subsidiary of Venezuela’s second-largest bank, Banco Latino, that was shut a week earlier when that country’s banking regulators deemed it insolvent. In U.S. District Court in Miami, the bank and Venezuelan regulators accused Gomez Lopez of offenses ranging from wire fraud to money laundering. The charges were dismissed for insufficient evidence in 2000. Since then, lawyers for Gomez Lopez have persuaded a U.S. bankruptcy judge in Miami that the banker is entitled to be reimbursed for his legal fees from the Banco Latino International estate. “This is an astounding vindication,” said Peter Homer of Homer & Bonner in Miami. “You have a gentleman here who had an impeccable reputation until all of this happened,” he said. Gomez Lopez is awaiting a decision by U.S. Bankruptcy Judge A. Jay Cristol on a motion requesting sanctions against his former employer, Banco Latino International, its legal counsel, Akerman Senterfitt, and firm attorneys Rodolfo Pittaluga Jr. and David Softness. Softness could not be reached for comment. Pittaluga was out of town and could not be reached for comment. WINNING STREAK In bankruptcy court Wednesday, Gomez Lopez’s lawyers argued that the bank, law firm and attorneys caused him unnecessary expenses and fees with “baseless filings and abusive practices” in prematurely appealing a ruling by Cristol that Gomez Lopez should be reimbursed by money from the Banco Latino estate. The decision to award costs was appealed before Judge Cristol’s order was final. Gomez Lopez’s legal team insists the appeal was another example of Banco Latino International’s pattern of legal harassment. “We have prevailed on every other material issue in this case thus far,” Homer said. “I don’t feel any differently about his one.” His confidence is the result of Gomez Lopez’s recent winning streak in the courtroom. First, Gomez Lopez’s motion to dismiss civil RICO charges against him was granted five days before the trial was scheduled to begin in April 2000. U.S. District Judge Shelby Highsmith cited a lack of evidence that Banco Latino International was defrauded in issuing a summary judgment. That decision led to subsequent fines, restitution and sanctions in 2002 against Banco Latino International and its legal team at the time, from Cleary Gottlieb Steen & Hamilton, for filing a lawsuit that lacked a factual basis. A judge determined their lawsuit to be a violation of Rule 11 of the Federal Rules of Civil Procedure. A third favorable decision came earlier this year when Judge Cristol ruled that Gomez Lopez and three other former Banco Latino International directors were entitled to be repaid for legal costs and fees incurred over the past 10 years. For Gomez Lopez, the decision is worth at least $1.2 million. Cristol’s decisions regarding the entitlement and the resimbursement amounts are both on appeal by Banco Latino International. 15 MONTHS ON THE JOB Gomez Lopez’s legal troubles started in late 1993 when the Venezuelan bank regulatory body, known by the acronym FOGADE indicated it would seize control of Banco Latino, which had assets of $2 billion. Gomez Lopez had been president of the bank for 15 months before that, having succeeded Antonio Ugueto Truijillo in September 1992. Gomez Lopez contends the bank was targeted not for its banking practices, but because it supported opponents of the political party of then-President Rafael Caldera. Gomez Lopez reportedly tried to save the bank by offering to resign and then doing it, but to no avail. FOGADE seized the bank three weeks later. Fearing the loss of their deposits, clients of Banco Latino International in Miami began lining up outside the institution’s office at 801 Brickell Ave. to withdraw their money. Unlike U.S. banks, Edge Act institutions may only accept deposits from non-U.S. residents. Those deposits are not insured by the Federal Deposit Insurance Corp. Within days of the run, Banco Latino International took the unique approach of filing for bankruptcy to keep creditors and depositors at bay while it reorganized. This was the first and only time an Edge Act institution has filed for Chapter 11. In 1995, FOGADE-controlled Banco Latino International sued Gomez Lopez and dozens of other former executives and directors of the bank in U.S. federal court in Miami under the Racketeer Influenced and Corrupt Organizations Act, claiming triple damages. The case was dismissed in June 1998. U.S. District Judge Wilkie D. Ferguson Jr. ruled the United States was not the appropriate place to try what constituted a Venezuelan legal matter. The judge did allow an amended lawsuit against the Banco Latino International executives and directors on the grounds that it was a U.S. corporation. In April 1999, Banco Latino International filed an amended lawsuit against eight former directors, including Gomez Lopez and his wife, Claudia Cordero Febres de Gomez. “BLI was one victim of a fraudulent scheme carried out by defendants over the course of several years, starting in or before 1989 and continuing until the time BLI was forced into bankruptcy in January 1994,” Banco Latino International claimed in the suit. The suit was based on Banco Latino International’s “triangular placements” under Gomez Lopez’s leadership. According to the lawsuit, Banco Latino International extended millions of dollars in loans — as much as $74 million — to its affiliate Banco Latino N.V. in the Netherlands Antilles, which then transferred the funds to the parent company Banco Latino C.A. in Venezuela. The loans, according to the suit, made at below-market interest rates, according to the lawsuit, creating “substantial damages” in the form of lost interest income. Gomez Lopez won a motion to dismiss Banco Latino International’s civil RICO charges against him in April 2000, just days before the trial was scheduled to begin. U.S. District Judge Highsmith determined no factual basis existed to support Banco Latino International’s claims. “At the end of the day, it turned out the Edge Act bank was solvent,” said bankruptcy attorney Andrew Herron of Homer & Bonner, who is also representing Gomez Lopez. As proof of that, Herron said, Banco Latino International repaid creditors and depositors 100 cents on the dollar, plus interest and administrative fees. Unlike traditional bankruptcy liquidations, Herron said, Banco Latino International still has $5 million remaining in an escrow account. It is from that fund that Gomez Lopez and three other former Banco Latino International directors who were also sued hope to collect their legal defense fees. The three former directors, Pedro Gilly, Maria Teresa Pulgar and Giacomo Leon, have been awarded by Judge Cristol a combined $370,000 in legal fees through Jan. 29. Supplemental claims are being pursued, Homer said. Judge Cristol ruled the monetary awards are permissible under an indemnification protection provided in the bylaws of Banco Latino International. The bank, which would be entitled to the money, has argued the claims of Gomez Lopez and the other three former directors were filed well after the bankruptcy case’s deadline for such notifications had passed. While fighting in court, Gomez Lopez has sought to repair his career. After spending time in Madrid, Gomez Lopez now lives in London. Shortly after the bank’s failure, Gomez Lopez had the added burden of being convicted in absentia in a Venezuelan court of diversion of public funds, breach of fiduciary duties, continuous fraud, preparation, signing and publication of inaccurate financial statements, and concealment of a war weapon. “Within the last six to nine months, he got what we believe is a final adjudication completely exonerating him of any criminal wrongdoing there whatsoever,” Homer said. With Gomez Lopez’s indemnification case unlikely to be finalized until next year, Homer said it remains unclear whether his client will sue his former employer and Venezuelan bank regulators, as former director Gilly is doing. In February, Gilly filed a malicious prosecution and conspiracy to commit malicious prosecution lawsuit in Miami-Dade Circuit Court. The case was moved to U.S. District Court on May 30 and assigned to U.S. District Judge Paul Huck. Gilly has not specified how much he is seeking for alleged injuries to his reputation; shame, humiliation and mental anguish; and injuries to his health. “A lot of other people in the case settled,” Homer said. But Gomez Lopez has not. “He said, ‘I am going to litigate this to conclusion, and get vindication out of it,’ ” Homer said. “ He got all of the vindication but his name and his reputation have been sullied. His ability to be able to do business has been injured by what they did here. The repayment of his fees and costs is just a small compensation for the kinds of injury that he has incurred.”

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