Winning Wasn't Everything

Jim Dougherty exposed insurance fraud for Lloyd's of London -- until they concluded the Miami Beach lawyer had overbilled them by millions. Now the U.S. attorney is involved and things have turned very ugly, indeed.

Dougherty defended insurance companies when they contested claims -- a specialty looked upon as hack work by the Brickell crowd. But Lehrman was struck by the lawyer's candor. "I called before my first interview to tell him my car had been broken into and my suit had been stolen," Lehrman recalls. "He told me, 'I don't care what you look like. I care about your mind.'" Dougherty, Lehrman continues, promised him plenty of work and a handsome salary. Then he began effusing about a multimillion-dollar insurance fraud case that had led him into a web of intrigue and a hornet's nest of litigation. A bright associate like Lehrman would be perfect for the case, Dougherty said. Lehrman, who secretly delighted in defying convention, signed on with Dougherty in January 1989.

The two made an odd couple. Lehrman, the grandson of revered Rabbi Irving Lehrman, was soft-spoken, cerebral, and polite to a fault. Five years working on the Hill as a congressional staffer had barely dented his naivete. Twenty years Lehrman's senior, Dougherty was volatile, a proud alumnus of Notre Dame and a self-proclaimed Vietnam vet with a trip-hammer temper that left holes in his walls and underlings cringing. While Lehrman was engaged to be married, Dougherty had already been through one messy divorce, and was now on his second wife, Lucia, a big-name zoning attorney.

Dougherty had come to Miami in the late Sixties. For many years his practice had consisted of minor insurance and personal-injury work. One of his more celebrated cases centered on a fishing guide who had been bitten in the crotch by a German shepherd. By the Eighties, however, he had upgraded his clientele. In 1986 a syndicate of underwriters at Lloyd's of London hired him to investigate a dubious insurance claim.

Munther Bilbeisi, a jet-setting Jordanian coffee merchant, alleged that bandits had invaded his posh Boca Raton home and made off with more than one million dollars' worth of fine art. Dougherty unearthed records that cast grave doubts on his story, and the claim was later thrown out of court. In February 1987, meanwhile, Bilbeisi submitted an insurance claim for $4.7 million, alleging that one of his coffee shipments from Guatemala had been stolen and replaced with inferior beans. Impressed by Dougherty's ferocity, a second group of Lloyd's underwriters, the Sturge syndicate, retained him to delve into the matter and to file a suit to void the claim.

Beaming over his affiliation with the venerable insurance concern, Dougherty beefed up his staff and moved into a new office in the Kovens Building on Dade Boulevard in Miami Beach. He assigned Richard Lehrman to the coffee case in August 1989, giving the new lawyer responsibility for the endless pleadings and court appearances.

Dougherty supervised the legwork required to disprove the claim, enlisting a motley array of experts that included several former Bilbeisi associates. Chief among them was Louis Altemar, a street-smart Haitian who worked for years as Bilbeisi's chauffeur, gained his trust, and was eventually assigned to coordinate his coffee-import business. Dougherty and his lead investigator, an exporter named Vicente Valls, traveled to Central America 30 times. There, with Altemar's guidance, they tracked down numerous witnesses who described Bilbeisi's import business as a coffee-smuggling ring that had grossed $100 million during the mid-Eighties.

To Lehrman the case against Bilbeisi looked unbeatable. "We used to walk into court like the guys in the white hats," he recalls, "and blow Bilbeisi's attorneys away." Indeed, a federal judge would eventually reject this second claim from Bilbeisi.

But Dougherty didn't stop with coffee. He was determined to unravel Bilbeisi's entire financial skein, and his inquisition soon took on the shadings of a criminal probe. He dug up records showing that the portly businessman had brokered a series of arms deals dating back to the Seventies and he contended that Bilbeisi was still dealing arms. He based this claim on a 1988 deal that sent three surplus helicopters A readily convertible to gun ships A from Jordan to Guatemala. Louis Altemar, who set up the transaction for Bilbeisi, provided Dougherty with documents indicating that his former boss netted $3 million on the $5.1 million sale and had brazenly proposed a second deal involving American-made jet fighters.

"Jim's theory, legally, was that showing Bilbeisi was an arms dealer and a coffee smuggler would prove he dealt in bad faith with Lloyd's," Lehrman notes. "So pretty soon his focus went beyond the original claim." Far beyond.

In an effort to have Bilbeisi indicted, Dougherty lobbied U.S. federal officials and high-ranking Guatemalans, sending them voluminous documentation. He got results. Though federal prosecutors declined to charge Bilbeisi for smuggling or arms violations, they did indict him for tax evasion in May 1991; then-U.S. attorney Dexter Lehtinen lauded Dougherty for helping make the case. Later that year the Guatemalan government charged Bilbeisi with smuggling and accused former president Vinicio Cerezo and his brother Milton of receiving kickbacks from the helicopter deal A all charges based on evidence generated by Dougherty. Bilbeisi fled to Jordan, where he remains an international fugitive.

By this time Dougherty had stumbled into the heart of a more sweeping scandal. Sifting through a mountain of bank records, he discovered that the Bank of Credit and Commerce International had given Bilbeisi dozens of letters of credit, financing much of his business. In December 1990 Dougherty persuaded the Sturge syndicate to file a civil racketeering suit against BCCI, seeking treble damages. (The insurance underwriters had never paid Bilbeisi's claims, of course, but they had paid Dougherty several million dollars, and he argued that Sturge could claim these fees as damages. "His pitch was basically that they could triple their money," explains Lehrman, whose job it was to draft the RICO complaint.)

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