By Michael E. Miller
By Allie Conti
By David Villano
By Jose D. Duran
By Michael E. Miller
By Allie Conti
By Kyle Swenson
By Luther Campbell
Within six months the renegade bank, besieged by investigators, had filed for bankruptcy. The deep pocket was suddenly empty. Case closed, Lehrman figured. But Dougherty insisted Sturge could still recover some money. At an eventual cost of more than $700,000 to his clients, he hired the prominent New York firm of Weil Gotshal & Manges to intervene in the bankruptcy case.
In his mind, Lehrman questioned the wisdom of the outlay. But like the underwriters, he placed his faith in Dougherty, who by this time was paying him $8000 per month. Besides, he had to admit the work was more exciting than anything he could ever hope for as a second-year associate on Brickell. "Here I am sitting there with 30 of the top lawyers from the top firms in New York, deposing the BCCI liquidators," he remembers. "It was heady stuff."
Throughout 1991 reports of the Bilbeisi/BCCI saga, fed by Dougherty, began appearing in leading newspapers and magazines. In October Lehrman and his boss were summoned to the Capitol to testify before Kerry's subcommittee. Lehrman, who had coordinated such hearings as a congressional staffer just a few years earlier, now found himself transported, as if by magic, to the other side of the table.
In retrospect, Lehrman says, he should have listened more carefully to Louis Altemar. "He used to tell me this incredibly incriminating stuff about Bilbeisi," Lehrman recalls. "And I'd always say, 'Have you told Jim about this?' And Louis would say, 'He doesn't listen. Sometimes I think he doesn't really want the case to end.'"
At first Lehrman dismissed such comments; to him, Dougherty seemed obsessed with defeating Bilbeisi legally. But as time passed Lehrman could hardly deny the distressing pattern: The litigation simply kept expanding. In a memo sent to Sturge officials in January 1992, Dougherty outlined his "Plan for Recovery of Attorneys' Fees and Court Costs." This now included filing motions for sanctions against Bilbeisi's U.S. lawyers and preparing a second racketeering suit targeting a battery of still-solvent banks and creditors affiliated with BCCI. The memo, for instance, suggested naming Miami's Capital Bank as a defendant. "With assets over $500 million...they definitely would be interested in a settlement in this case," Dougherty assured the insurance underwriters.
In February Dougherty hired Robert Blakey, a Notre Dame law professor credited with drafting the federal criminal racketeering statute, to advise him on this second complaint. "So Blakey comes down for the weekend and he looks through our records and he tells me, 'You might as well be suing Adam,'" Lehrman recalls. Blakey collected $15,000 for his work on the case, courtesy of Lloyd's, and Lehrman quietly began looking for another job.
He wasn't the only one who'd grown disillusioned. In mid-March, Louis Altemar approached Lehrman, complaining that he would never receive the reward Dougherty had promised him when the case ended. "Mr. Jim owes you millions of dollars, too," he told Lehrman.
"What are you talking about?" Lehrman said.
Altemar took Lehrman aside and produced a copy of a quarterly statement to the underwriters at Lloyd's Sturge syndicate. The three-month bill for the Bilbeisi coffee case totaled a whopping one million dollars and listed a roster of attorneys, all purportedly working full-time on the case. Most of the attorneys, Lehrman knew, had never so much as researched a pleading. A chill traced his spine.
"You should see the other ones," Altemar said.
Dougherty's quirks A he alone spoke with Lloyd's representatives and he wouldn't let anyone else see the bills, which he hired a bookkeeper to work on after hours A now took on a sinister cast. Lehrman immediately consulted Vicente Valls, with whom he had grown friendly during the case. "You don't know the half of it," Valls said.
He proceeded to tell Lehrman wild stories of Dougherty's exploits in Central America, where the two men had traveled to investigate. (Many of these allegations are contained in a lawsuit that Valls filed against Dougherty in federal court two months ago; see accompanying sidebar.) Dougherty, Valls claimed, hired prostitutes, doled out thousands of dollars to potential courtroom witnesses, and bought fancy gifts for the officials charged with investigating Bilbeisi. Their boss had frittered away thousands more, Valls told Lehrman and later mentioned in his lawsuit, smuggling into the U.S. a Salvadoran named Korina Bretado (a.k.a. Cecilia Ramirez). Lehrman knew that it was widely assumed around the law office that Bretado was Dougherty's lover. Valls even claimed Dougherty had solicited Guatemalans to harm two of Bilbeisi's cohorts.
As he listened, Lehrman began to reassess the rationale behind Dougherty's legal strategy: The coffee case was Dougherty's cash cow, he now reasoned, and the only way to milk it was to keep it alive. The only way to justify the millions he was being paid, in turn, was to target a defendant A any defendant A whose assets were sufficient to reimburse Sturge for Dougherty's costs in pursuing Bilbeisi.
The revelation provided Lehrman little comfort. "Here I am looking to strike out on my own. My wife has just left her job to have a child," he recalls. "And suddenly my rosy future isn't looking too rosy." Concerned about the implications of his involvement, he did what any young lawyer in pickle would do: He hired a good attorney, Joel Hirschhorn. On Hirschhorn's advice, and without telling Dougherty, Lehrman and Valls flew to London in late March of 1992 to meet with John Blackwell, Lloyd's chief adjuster of cargo claims.