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June 19, 2008 8:46 PM

No Evidence to Suggest Hunton & Williams Partner Committed Fraud, Judge Says

Posted by Amy Kolz

Sometimes it pays to fight back.

Earlier this week, a federal judge, concluding that there was no evidence that the cochair of Hunton & Williams' international practice group helped cover up fraud at now defunct Hamilton Bank, recommended that bank regulators drop the charges. The decision marks the end of lawyer Carlos Loumiet's 19-month battle with the Office of the Comptroller of the Currency over work Loumiet had done for Hamilton Bank, N.A. while he was a partner at Miami's Greenberg Traurig.

In November 2006, the OCC accused Loumiet of helping executives at Hamilton Bank, N.A. conceal financial misconduct. The OCC also brought charges against Greenberg Traurig and firm partner Robert Grossman. As The American Lawyer reported in a March 2007 feature about Greenberg's growing list of public scandals amid the firm's spectacular growth, the firm and Grossman settled in the fall of 2006, without admitting guilt, for nearly $1 million. The OCC prohibited Grossman from undertaking any regulatory responsibility for any bank insured by the Federal Deposit Insurance Corporation for five years; Greenberg Traurig agreed to develop a training program for lawyers who represent banks. The firm also paid $7.6 million as part of a settlement with the Federal Deposit Insurance Corporation.

Loumiet, resolutely insisting he had done nothing wrong, refused to settle.

The OCC's case centered on two reports authored by the Greenberg lawyers as part of an internal investigation for Hamilton Bank's audit committee looking at a series of bad loans Hamilton made in Russia in the 1990s. The law firm's reports found nothing amiss with a pair of 1998 loan swaps that federal regulators later concluded were carried out to hide the Russian loan losses. The OCC closed Hamilton in 2002 and the bank's CEO, president, and CFO were later convicted of fraud.

In a 57-page decision, Chief Administrative Law Judge Ann Cook found no evidence that Loumiet "knowingly engaged in any of the acts alleged to be misconduct." She described Loumiet as a "capable, conscientious and respected attorney known for doing exemplary work." And she found no evidence that "either Greenberg or Mr. Loumiet knew the truth and intentionally and purposefully concealed or misrepresented it."

The recommendation, if adopted by the OCC, may set a precedent on whether outside lawyers can be held responsible for the conduct of their financial institution clients, according to Loumiet's lawyer Alan Greer of Miami's Richman Greer law firm. "The OCC was faulting Carlos Loumiet for not having controlled the bank's conduct. Had [the recommendation been guilty], it would absolutely chill the conduct of any lawyer retained by an audit committee to do an investigation," Greer says.

Loumiet, who spent 19 years at Greenberg Traurig, including ten as head of the firm's international and banking practice, has "gone through two years of hell" as a result of this case, says Greer. "Financial institutions think twice before hiring anyone who the OCC says is bad," says Greer, noting that Loumiet's practice has been severely impacted.

The Am Law Daily was unable to reach Loumiet for comment.

Download Loumiet Recommended Decision.pdf


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