Attorney Maria Elena Perez, the lightning rod in the NCAA’s troubled investigation of the University of Miami, sighs as she looks at her empty saltwater fish tank.
The aquarium was a centerpiece of her zen-style office, a Coral Gables bungalow replete with scented candles, numerous tchotchkes and a 4-foot sculpture of Lady Justice.
The office stands in contrast to the volatile, fast-talking criminal defense attorney for Nevin Shapiro, the imprisoned Ponzi maven and onetime University of Miami sports booster.
Her fish went belly-up as the latest chapter in the Shapiro-UM saga unfolded. The NCAA acknowledged it sullied its own investigation by paying Perez to conduct three depositions in the bankruptcy case of Shapiro’s collapsed fraud vehicle, Capitol Investments USA Inc.
"All this negative energy," Perez said. "The fish must have absorbed it."
After throwing off sparks for weeks, the controversy blew up last week. The National Collegiate Athletic Association issued an internal investigation indicating Perez was complicit in misusing bankruptcy proceedings to acquire information on UM athletes.
The NCAA released 40 email threads showing executives and investigators ignored the association’s own legal staff in hiring Perez, who repeatedly appealed to get paid in the electronic exchanges. The NCAA balked at her $57,000 in invoices, eventually paying her $18,000. Perez took a legal education course in bankruptcy law, which was paid for by the NCAA, so among other things she could conduct the depositions.
It also purchased a mobile phone for Shapiro and put $4,500 in his prison commissary account in New Jersey.
The NCAA report refers to the arrangement with the attorney as "the Perez proposal."
She responded by taking to South Florida’s airwaves to blast the NCAA, saying she is going to make it her life’s goal to expose its procedures as flawed and wrong. She was everywhere at once, appearing on television newscasts, sports talk radio and morning shock-jock shows to "set the record straight."
"The NCAA is a bunch of mall cops," Perez said, settling in for an interview with the Daily Business Review. "If they don’t know what’s going on with their own enforcement staff, how can they know what’s going on the national level of college athletic programs and how they are being run?"
But no attorney wants to be in Perez’s position right now. The UM law graduate is the subject of a Florida Bar investigation based on a complaint she blamed on men targeted by her for depositions in the bankruptcy case of Shapiro’s fraudulent grocery-trading company.
The NCAA terminated its top enforcement officer who approved payments to the lawyer against the association’s own legal advice. It previously fired the investigator who worked with Perez.
The NCAA issued a notice of allegations against the private university last week, charging it had a "lack of institutional control" for allowing Shapiro to infiltrate its football and other athletic programs. Shapiro has said he provided athletes with prostitutes, cars, television sets and yacht trips.
The NCAA did not respond by deadline to questions submitted by the Review.
For Perez, one question is whether she violated ethical boundaries under Florida Bar rules in her work for the NCAA as it investigated wrongdoing perpetrated by her client and if she knew she was helping the NCAA violate its own rules.
Legal ethics experts assert Perez propelled herself into a gray area on several Bar rules including conflict of interest, informed consent, competency and misrepresentation.
Perez is adamant she did nothing wrong. She insists she never took on the NCAA as a client but allowed it to pay some of her now-indigent client’s attorney fees since he cooperated with the investigation into UM.
"I didn’t break any laws or any rules," she said. "I know what I did was right."
Conflict Of Interest?
"I have only represented Nevin Shapiro. Nevin Shapiro is my client. The NCAA is not my client," Perez said. "We shared information. They gave me information. I gave them information."
Robert Jarvis, a law professor at Nova Southeastern University’s Shepard Broad Law Center, said the emails released by the NCAA actually play in her favor. He said the NCAA was Perez’s de facto client, but the evidence shows all parties were informed and she was clearly working to assist Shapiro.
"I don’t think she was conflicted at all," Jarvis said. "The real issue comes down to whether she did know that the NCAA was violating its own internal policy by paying her legal fees and she was helping it do that."
Charles Pouncy, an associate law professor who specializes in ethics at Florida International University in Miami, said it can become problematic when attorneys receive payment from another source for their client’s representation, but it’s absolutely permissible.
The client must give "informed consent," knowing the attorney will be receiving fees from someone other than the client. And the person or organization paying the bill must know it’s not permitted to interfere with the lawyer’s independence or professional judgment in the lawyer’s representation of the client.
"I believe, an attorney should have a reasonable basis to believe that this relationship will benefit the client, although the rules do not specifically require that," Pouncy said.
But he said what is confusing is who was the real party in interest on the depositions — Shapiro or the NCAA.
"If they were paying a lawyer to give them confidential information on a client’s bankruptcy proceedings, that looks like a conflict of interest," he said.
Perez said Shapiro was cooperating with the NCAA before her representation and pointed its investigators toward key players. In the end, the NCAA threw out 20 percent of its investigation tied directly to Perez before moving ahead with possible sanctions.
UM president Donna Shalala attacked the NCAA for its flawed investigation and maintains the university has been punished enough through two self-imposed postseason bans even though the NCAA gives the final word on punishment for violations.
Shalala is incredulous that the NCAA is taking the word of Perez’s client, "who made a fortune by lying."
"The lengthy and already flawed investigation has demonstrated a disappointing pattern of unprofessional and unethical behavior," she said.
But the scandal has an element of personal embarrassment for her. A much-published photograph shows Shalala grinning as she accepted a $50,000 check from Shapiro at a UM bowling fundraiser.
Sentenced to 20 years in prison for his Ponzi scheme, Shapiro contacted the NCAA to offer information on student athletes who accepted his largesse. Perez is certain Shapiro’s cooperation with the NCAA, the bankruptcy trustee and federal prosecutors will result in a reduction of his prison sentence.
Under bankruptcy court rules, interested parties can conduct what are known as 2004 examinations. But the court-appointed bankruptcy trustee for Shapiro’s Capitol Investments and his attorney were not involved in the depositions set up with Perez’s subpoenas in the case.
Bankruptcy trustee Joel Tabas of Tabas, Freedman, Soloff, Brown & Rigali in Miami and his attorney, law partner Gary Freedman, declined to comment.
Some attorneys believe Perez may have overplayed her hand for Shapiro.
Miami attorney Joseph Rosenbaum hired Perez while she was in law school. He said Perez should have realized the risk-reward in helping the NCAA was not worth it. He said it’s unlikely Shapiro’s cooperation with the NCAA will help reduce his sentence, which was relatively light considering the hundreds of millions of dollars lost by investors who were victimized by his fraud.
Rosenbaum also criticized her for using bankruptcy depositions as a vehicle for the NCAA.
"She is abusing the federal system," he asserted. "The bankruptcy courts are set up to do certain things under certain rules and not for an ulterior motive."
Perez said Rosenbaum is bitter because she took the Dabouze from him and was able to get him released.
Miami attorney Richard Klugh, who worked with Perez on the Dabouze case, said he wished "everything would just cool down." He said, "She did wonderful work for Mr. Dabouze, who has returned to society to become a very successful businessman."
The NCAA’s internal investigation concluded its investigators, including chief enforcement officer Julie Roe Lach, "paid insufficient attention to the concern that the Perez proposal could constitute a manipulation of the bankruptcy process." Lach was fired.
Rosenbaum noted UM alumni are a strong presence in the South Florida legal community.
"It’s sad to see her in this situation. Maybe she is right, maybe she is wrong, but it can’t be helping her," he said. "There are a lot of judges who went to UM."
Perez said she loves UM but acknowledges receiving death threats from rabid Hurricanes fans. As for judges, she said they know she donates hundreds of hours as a guardian ad litem and pro bono attorney.
Hailing from a well-to-do Cuban-American family, Perez bristles at the suggestion that her alliance with the NCAA was financially motivated.
But a Jan. 31, 2012, email to NCAA investigator Ameen Najjar indicates differently. Perez wrote, "I am single mother of a 24-month-old son, and I cannot be financially responsible for the NCAA investigation."
The emails, offered as exhibits attached to the NCAA internal investigation report, showed how closely Perez worked with the association.
Najjar brought Perez into the case while looking into Shapiro’s wrongdoing at UM, first reported by Yahoo Sports in August 2011 following an 11-month investigation.
Najjar, in a message to Perez, wrote, "I ran into a problem with our legal dept concerning ‘retaining’ you but there is a way around it." Payment was approved by Lach.
The NCAA tapped Perez to depose three men who allegedly served as Shapiro’s go-betweens with UM athletes. They were former Shapiro bodyguard Mario Sanchez, former UM equipment manager Sean "Pee-wee" Allen and Michael Huyghue, the principal in Shapiro’s sports agency, Axcess Sports & Entertainment LLC.
Najjar told his supervisors, "Other than conducting these depositions, I do not believe we will be able to secure interviews with these witnesses."
But NCAA lawyers advised Najjar not to hire Perez. He retained her anyway, couching the payments as reimbursements. Najjar was fired last May for threatening UM players. He reportedly advised them they should cooperate or be considered guilty.
"Najjar in particular knew all the angles of the arrangement with Ms. Perez, yet he completely overlooked several that should have raised concern in his mind," the internal report read.
Passing along information among interested parties in bankruptcy proceedings is not unusual, Perez insists.
"Information is shared all the time in bankruptcy court," she said.
Perez insists she did everything at the direction of Shapiro. She says he wants to clean up college sports from outside influences like himself.
If if you can keep up with Perez, several things become clear: She is extremely dedicated to Shapiro and aggressive in the way she practices law. There were screaming matches at bankruptcy depositions she attended.
"I ruffle feathers," she said. "That is what good defense attorneys do."
Shapiro hired Perez because she represented his stepfather, Richard Adam, who was imprisoned in Canada for 3½ years for fraud. Perez got him time served after he was extradited to the United States.
Perez’s dedication to her clients also can be seen in her representation of Yves Darbouze, a drug trafficker sentenced to 17 years in prison before she entered the case. Perez showed the government withheld evidence at trial, and he was released from prison in 2006 after serving about six years.
Trouble in court
But she also was referred by U.S. District Judge Donald Middlebrooks in West Palm Beach to the district’s Ad Hoc Committee for Attorney Admissions after he found she failed to protect a client’s right to appeal. He adopted a magistrate’s finding in 2010 that Perez was dishonest with the court.
Perez underwent a six-month mentorship and moved on with her practice. She blamed the action on trying to balance a difficult pregnancy with her practice.
Jarvis, who analyzed the emails for the Review, said Perez postures herself as a lawyer hellbent on cleaning up the NCAA.
"She is saying that the NCAA, rather than looking out for student athletes, has become a pimp," he said.
But Jarvis notes, within all that subtext, Perez continually gripes about getting paid. She charged $575 an hour.
And, he said, Perez is doing herself no favors by claiming she is an NCAA scapegoat. It is incumbent upon lawyers to know all the legal ramifications for their clients, and Perez should have consulted an attorney specializing in sports law.
After all, the NCAA rules are complicated enough that universities have dedicated personnel to make sure they are in compliance, and outside counsel specialize in helping schools during investigations.
Florida Bar ethics rules require attorneys to be competent to represent clients.
"How could she be competent to represent them if she did not know the rules?" Jarvis asked. "Whatever explanation she chooses, it shows she was not focusing on the possible ethical ramifications."
Jarvis said he wished he was teaching an ethics class this semester so he could explore the many issues raised by Perez’s choices.
"It’s a terrific cautionary tale for lawyers," he said. "We would have many class discussions on all the possible rule violations."
"The real issue comes down to whether she did know that the NCAA was violating its own internal policy by paying her legal fees and she was helping it do that."