In a case with international financial implications, Casa Casuarina LLC, owner of a landmark Miami Beach resort property, is suing its mortgage holder German bank WestLB on multiple counts of alleged fraud.
“We are seeking justice for our client, which lost money, income, and reputation because of the bank’s alleged deceptive and illegal actions,” said attorney Israel Reyes, a partner at Miami-based Diaz Reus & Targ, LLP, who represents Casa Casuarina LLC with co-counsel Adam Steinberg, a Fort Lauderdale attorney.
Located at 1116 Ocean Drive, Miami Beach, Casa Casuarina is a Spanish-style villa once owned by designer Gianni Versace and known as the Versace mansion. In 2006, executives at WestLB’s New York branch closed on a $25 million mortgage on the property so Casa Casuarina could pay off a $14 million Bank of America loan.
A complaint filed December 12, 2011in the 11th Jurical Circuit in Miami (case #11-414111 CA 23) alleges that Dusseldorf-based WestLB and related parties conspired in a plot to foreclose on the property, based on fabrications of the loan documents, while preparing to sell the mortgage loan to another party for a profit. The suit cites provisions of the Racketeer Influenced and Corrupt Organizations Act (RICO) and the Florida Civil Remedies for Criminal Practices Act.
“The lawsuit alleges that WestLB took signature pages and slapped them on a loan document that was never agreed to by the parties, and pretended like this was a finalized loan document when it wasn’t,” said Steinberg.
The Casa Casuarina complaint outlines how WestLB, once a successful German bank, began a rapid decline in 2003. “Hit by high levels of insolvency and with losses of more than 2 billion euros by 2005, WestLB began to take calculated, fraudulent steps to artificially book liquidity and delay its demise,” the complaint alleges. “In doing so, it took on toxic loans, deceptively altered loan documentation, forced its clients to sign a forbearance agreement and set the stage for packaging and selling loan portfolios to the highest bidder.”
As Reyes said, “We want WestLB to change its deceptive practices and become a good corporate citizen.”