Two Fort Lauderdale, Fla., attorneys indicted in a nearly $1 billion Ponzi scheme known as Mutual Benefits are anything but fly-by-night hucksters known to be associated with the worn pyramid con.
Michael McNerney and Anthony Livoti Jr. are well-respected advocates and have been fixtures in the legal community for decades.
McNerney served as chairman of the University of Florida Law Center Board of Trustees and the Fort Lauderdale Chamber of Commerce’s downtown council, among many trusted positions.
Livoti was a well-known litigator in Broward County courtrooms who earned the respect of a number of judges. He served on boards of directors of such causes as the Art for AIDS Auction and was a nominee for a Florida Bar pro bono award.
“I am in suspended disbelief over the allegations,” said attorney Stuart Grossman of Miami’s Grossman Roth, who worked with McNerney when both were Florida Bar officers. “When a lawyer is charged, the whole legal community gasps, and when it’s a lawyer of Mike McNerney’s stature, I think they gasp, and they have a feeling of utter disbelief.”
Lawyers for the men say that they were acting in their ethical role as attorneys advising Mutual Benefits.
Livoti’s attorney, Joel Hirschhorn of Hirschhorn & Bieber in Coral Gables, called his client “a decent, honest straightforward lawyer who is overwhelmed by the storm around him.”
“He did his job as an escrow agent and trustee and is innocent of any wrongdoing,” he said. “It’s going to cost a lot of emotional and financial capital, but in the end, we think the jury is going to say not guilty on every single count.”
McNerney’s attorneys, Miami criminal defense attorneys Jose Quinon and Scott Srebnick, say the case is one that should concern their colleagues, especially those advising corporate officers.
“It’s fair to say any time a lawyer is prosecuted for conduct in which he was acting as a lawyer deserves close attention by the rest of the Bar,” Srebnick said.
It’s too early to say whether this is another example of the criminalization of the law profession like the money-laundering indictment of fellow Miami attorney Ben Kuehne, Srebnick said. But he adds it’s disconcerting when the government “tries to paint a lawyer with the same broad strokes” as a client who runs afoul of the law.
Before Wall Street poseur Bernard Madoff set new standards for robbing Peter to pay Paul, Mutual Benefits set the gold standard for Ponzi schemes, according to the Securities and Exchange Commission, which shut down the Fort Lauderdale-based company in 2003 and placed it in receivership.
Mutual Benefits dealt in viaticals, buying life insurance policies from the terminally ill, elderly and people with AIDS. It made money if the policyholder died ahead of actuarial schedules or on time. The company described the investment as safe enough for investors saving for college or retirement.