From the desk of Hector Lombana

One of the most significant and memorable cases in the recent history of South Florida's civil courts, the case of Banco Espirito Santo Intl. Ltd. v. BDO Seidman LLP concluded recently with a historic $521 million verdict for the Portugal-based bank. I helped try the case with lead counsel Steven Thomas of the internationally renowned law firm Sullivan & Cromwell in Los Angeles and co-counsel Gonzalo R. Dorta, a solo practitioner based in Coral Gables.

The four and a half month trial proved to be one of the most interesting experiences of my career. Thomas benefited from the counsel of the team of local attorneys in the selection of the jury as well as the shaping of the trial testimony and presentations on a daily basis.

The credibility of the expert witnesses who testified in the case also proved to be critical. The issue of the importance of the complete independence of accountants from the organizations that they audit became a significant matter in this case. Under interrogation from plaintiff's attorneys, one of the key expert witnesses for the defendant committed a monumental gaffe on this subject. The expert admitted that he was unsure whether civil trial judges must be completely independent from the parties involved in the cases over which they preside to maintain impartiality. This admission of confusion as to the importance of independence cast significant doubts as to the validity of the expert's testimony as well as the defense's entire case.

The trial hinged on our ability to demonstrate that the public's trust had been violated by certified public accountants who breached their duty to conduct a complete and impartial audit. By selecting the very best expert witnesses and discrediting the defendant's experts through interrogation, we were able to prevail in the matter for the bank.

The jury ruled that accounting firm BDO Seidman was responsible for negligent financial audits performed over several years at E.S. Bankest, a Miami factoring company. Those audits were blamed for facilitating one of the largest bank frauds in South Florida history. The same jury ruled in June that Chicago-based BDO, the nation's fifth largest accounting firm, was grossly negligent in its duty to detect the massive fraud at Bankest. In the damages phase, the jury deliberated for only one hour on Monday, August 13, in deciding that BDO must pay $170 million in compensatory damages. The following day, the jury deliberated for slightly more than an hour and concluded that BDO must also pay $351 million in punitive damages, for a total of $521 million.

I am very proud to have played a role in this landmark case and look forward to the possibility of working again in the future with the other attorneys who were involved.