He's argued as a special prosecutor before a grand jury about the possible crimes of President Bill Clinton during the Monica Lewinsky era. (The case was resolved without a trial.) He's defended Ponzi scheme king Bernie Madoff's accountant. (The accountant also happened to lose his life savings and died at 80 before there was a trial.) "He" is Latour "L.T." Lafferty, a 10-year former federal prosecutor in Tampa turned white-collar defense attorney at the Fowler White Boggs law firm here. Lafferty remains no less passionate about the law, justice and how it's being applied in a deep recession that has damaged the public's confidence in the economy, stock markets, real estate and how this country is run. Lafferty, 41, recently sat down and talked with the Times. Here are some highlights.
So is there really a link between economic times and prosecutions and enforcement actions?
Yes. There was a lot of fraud pursued in the 1990s. But after Sept. 11, 2001, a lot of government resources shifted to anti-terrorism matters like the (USF professor) Sami Al-Arian case and others. Now I see the pendulum coming around.
Back to tougher enforcement? Why now?
Several reasons. The economy is down and the government is spending more money to improve it. Citizens are demanding accountability, the government is responding and law enforcement wants to provide that accountability.
If I did not know better, I'd say you still sound like a federal prosecutor.
I would not disagree. I'm a citizen, as well. If you look at the FBI strategic plan under white-collar crime, one of its goals is restoring investor confidence. They achieve that through prosecutions. Securities, health care and mortgage fraudsters need to be held accountable before investors are willing to put their money back into the stock markets or real estate. This is an important part of the financial and economic success of this country.
You mention mortgage fraud. What do you hear?
There's a mortgage fraud task force in Florida, and it has a list with names on it. Prosecutors are telling me to get ready for a wave. The housing bubble burst a few years ago, but the fallout is happening now.
So this means more business for you as a defense attorney, yes?
We're seeing more mortgage fraud cases that are in the investigative stage. The mortgage task force is especially focused on southwest Florida, from Naples to Sarasota, with some cases in the Tampa Bay area. A lot of people there were building houses, investing in and flipping houses. You hear stories of buses of people coming over from Miami and buying multiple houses at a time, and then those portfolios would just collapse. Five years ago, prosecutors focused on illegal flippers, but now they are looking at foreclosure scams.
It's not just mortgage fraud, right?
I see health care fraud on the horizon. South Florida is called ground zero for this. There will be more securities fraud cases. The public will demand it and investor confidence will depend on it. This may take some years. At first, we'll see them go after the big names like (Bernie) Madoff and (Texas billionaire Allen) Stanford and (Sarasota money manager Art) Nadel. But it will trickle down, and small people will be pursued.
And your clients are sometimes the ones who were harmed?
We did an internal investigation, then presented our findings to law enforcement officials to pick up the case. In this example, Howard Rosenthal (the interim manager at the St. Petersburg's BayWalk entertainment center) of the Colliers Arnold real estate firm was prosecuted for diverting company funds.
You're pretty much a local boy, aren't you?
Mostly. Moved here from Ohio and attended public schools in Brandon. Still live there. Graduated from the University of Florida in '89, then Stetson Law School in '92. Clerked for a judge in Jacksonville, where I developed a passion to become a federal prosecutor. Then I joined Fowler White in late 2005.
Any regrets getting involved in the investigation of a U.S. president?
How many people can say they stood before a federal grand jury discussing whether the president of the United States had committed a crime? It was a once-in-a-lifetime opportunity.
You were influenced by someone to do that, yes?
William Reece Smith, now with Carlton Fields. He was a teacher and over lunch back then I asked him why he gave up a great law job to take a Rhodes scholarship. He said you have to seize such opportunities in life. So for a small guy from Brandon, Fla., going up to D.C. to be a special prosecutor was a no-brainer.
You served on the Florida Commission on Ethics for two years recently, and ethics are obviously important to you. How does this fit with what you do?
The failure of ethical leadership is at the core of white collar crime. S&L failures. WorldCom. Enron. Today's investment and real estate frauds. Everyone looks for someone in authority to make the right call, and they don't.
Robert Trigaux can be reached at [email protected]