Caught Up in Deceit

Caught Up in Deceit

By Janet Leiser

Senior Editor

Tampa attorney Brian James Almengual, who represented more than 900 clients in U.S. Bankruptcy Court over the past two decades, says he intended no deceit in his personal bankruptcy when he failed to disclose many of his assets - including an office building, beach condo and valuable jewelry and art.

Almengual claimed he'd merely relied on "suspect advice" from the attorney who represented him and his wife, Suzanne Warner-Almengual, when they filed a Chapter 13 bankruptcy petition on Feb. 7, 2001, court records show. That attorney, well-known Tampa bankruptcy practitioner Harvey Paul Muslin, later died as the investigation against the Almenguals unfolded.

Last month, U.S. District Judge James Whittemore sentenced Almengual, 55, to 15 months in federal prison, three months after he and his wife pleaded guilty to seven charges related to bankruptcy fraud. Warner-Almengual, also 55, was placed on house arrest for nine months.

How did this couple, who ran a Hyde Park law office for about a decade, become embroiled in a bankruptcy conspiracy that resulted in criminal charges and the apparent end of their legal careers?

"It's a sad situation. I've known Brian for many years. He had a successful practice," says Herb Donica, attorney for the U.S. bankruptcy trustee who handled the Almengual's bankruptcy.

In a recent interview with the Review, Warner-Almengual, speaking from her home while on house arrest, says she had no idea she and her husband were doing anything illegal when they filed their bankruptcy petition.

"I relied on my husband," she says. "I left it in his hands. I signed the petition and I didn't read it. I was under a doctor's care at the time."

It's unclear from court records what prompted the couple's filing: There's no mention of an unexpected financial crisis, such as unpaid medical bills.

Donica says: "To this day I cannot make sense of this case. I don't know why it turned out this way."

Problems suspected

The couple's bankruptcy petition shows they had numerous credit cards, including multiple accounts with companies such as American Express, MNBA and Citibank. At the time of the filing, they listed assets of $455,113, including a Davis Islands home, and debts of $789,253. About $250,000 was owed to unsecured creditors. And they made payments for their newer luxury cars, a BMW and Mercedes Benz.

The bankruptcy, first filed as a reorganization where creditors are repaid at least part of what they're owed, was converted to a liquidation eight months after the initial filing.

It appears to have proceeded like any other bankruptcy case, with the judge ordering the discharge of the Almengual's debts on Feb. 5, 2002.

But Chapter 7 U.S. Trustee Andrea Bauman, who was responsible for the protection of the estate's assets for the repayment of creditors, suspected problems with the bankruptcy. She called Donica with her concerns.

Donica realized there was no mention of the Almengual's law practice or their Swann Avenue office building in the bankruptcy petition.

He researched Hillsborough public records and found the couple had formed a trust in the name of Warner-Almengual's mother, Francis C. Toledo, 10 months prior to the bankruptcy filing. And they also had another revocable trust. The Almengual's had not disclosed either trust, Donica says, as required by bankruptcy rules.

With Donica's suspicions raised, he subpoenaed records from the Bank of Tampa, which provided a recent financial affidavit for the couple. It showed assets, including an art collection valued at $100,000, not disclosed in the bankruptcy. The trustees had also discovered the couple owned a Hyde Park office building and a condo at Indian Shores beach.

In July 2002, Donica and Bauman filed what's called an adversarial proceeding in bankruptcy court. They asked the judge to order the couple to turn over all non-exempt property.

Instead, a settlement was reached. The couple agreed to pay $100,000 for distribution to their unsecured creditors. Warner-Almengual says she borrowed that money from her mother.

"We felt we cooperated fully with the U.S. Trustee's Office," Warner-Almengual says.

The call

In January 2004, the case blew wide open. A caller, who is not identified in court records, told a bankruptcy trustee the couple had hid many assets from the court.

The caller said Warner-Almengual's mother had hid the assets for the couple. But Toledo and her daughter were "not [now] speaking" and if Toledo was deposed she'd "spill the beans," records show.

The caller also gave the name of the Fort Lauderdale store where the couple's mother had placed their antiques on consignment, as well as the name and telephone number of the jeweler where they'd placed a three-carat diamond ring, valued at $30,000, and a diamond bracelet.

That jeweler later told the trustee he had a receipt that showed Almengual picked up the ring on Dec. 16, 2002. But the platinum diamond bracelet had been sold.

Donica and the trustee turned over the bankruptcy documents to the Federal Bureau of Investigation and the U.S. Attorney's Office.

Federal investigation

Within two weeks of that call, an attorney for the Almengual's notified the court they'd like to voluntarily waive the discharge, which means they'd still owe their debts as if the petition was never filed. The court granted the waiver of discharge.

From the filing of the bankruptcy in 2001 and through 2004, Almengual continued to work as a bankruptcy attorney. Meanwhile, the couple was under investigation by federal authorities and the Florida Bar.

In February of this year, Almengual resigned from the bar rather than face disbarment.

The following month, a federal grand jury issued an indictment, charging both husband and wife with seven criminal charges related to bankruptcy fraud. They faced as much as five years in prison on each count and a fine of $250,000.

In July, they pleaded guilty to the charges.

"At first, I wanted to go to trial," says Warner-Almengual, who resigned from the bar in September. "Basically, my husband was driving the bus while I was asleep."

Warner-Almengual's attorney, Jim Felman, pleaded for leniency for her. He told the court she was "a study in personal courage under repeatedly adverse circumstances." Her parents divorced when she was young, according to Felman, and she was primarily raised by her grandmother because her father was an alcoholic.

Felman then cited the anguish of her first marriage. After 13 years of marriage and the birth of two daughters, her first husband, Paul Warner, then a Tampa attorney, told her he wanted a divorce because he was homosexual. She was attending Stetson University College of Law and raising her daughters when she found out he had AIDS and was dying. She remarried him and cared for him until his death in 1991.

She also learned she'd contracted Hepatitis B from her late husband.

Her "mental condition continued to deteriorate as she suffered from chronic depression and more frequent panic attacks," Felman wrote.

In 1992, a year after her first husband's death, she married Brian Almengual. They practiced law together at the Swann Avenue office that had been her first husband's office. And he adopted her two daughters.

But in 2001 Warner-Almengual's "mental impairment effectively forced her to withdraw from the practice of law," court records show.

"Over the past eight years ... while there have been periods where she flourished personally, she also faces periods of complete and abject dysfunction which can last for months at a time," her doctor wrote.

The doctor also told how "recurring financial crises have led to several drastic reductions in their quality of life over the past several years," court records showed.

Warner-Almengual says: "It has been a downward financial spiral. I've lost everything."

But she was able to avoid prison.

Judge Whittemore placed her on house arrest, to be followed by 60 months probation. In addition, she and her husband must pay $8,858 in restitution.

It's unclear when Almengual, who remains her husband, will begin his 15-month sentence. The judge left that up to the U.S. Marshals Service. After his prison term, he'll serve 24 months of supervised release.

Warner-Almengual says she now rents an 800-square-foot house and is seeking a job. But prospective employers show her the door when she tells them she's a convicted felon.

"Shame on me," she says. "I relied on my husband, no questions asked."

Both she and her husband can apply for readmission to the Florida Bar after three years.

Timeline

Over the last five years, Brian and Suzanne Warner-Almengual lives have unraveled, starting with a 2001 bankruptcy. A timeline of key events:

April 7, 2000: Brian and Suzanne Almengual establish the Francis C. Toledo Living Trust.

Feb. 7, 2001: Couple files Chapter 13 petition; lists assets of $455,113 and debts of $789,253.

Oct. 1, 2001: Couple renegotiates loans and executes third mortgage with Bank of Tampa - without court knowledge.

Oct. 23, 2001: Converts case to Chapter 7, liquidation.

Feb. 5, 2002: Court discharges debtors of their debts.

July 11, 2002: Trustee asks court to order turnover of all property held by couple's revocable trust.

Oct. 15, 2002: Couple reaches settlement with trustee for payment of value of non-exempt property.

January 2003: Couple's beach place, an Indian Shores condo, re-mortgaged for $235,000.

Aug. 14, 2003: Couple transfers office building to Toledo trust U.S. trustee files second adversary motion

Jan. 22, 2004: Couple asks court for waiver of discharge, which means they receive no court protection for their debts.

Feb. 4, 2004: Judge grants waiver of discharge.

March 23, 2004: Trustee gives documents to Federal Bureau of Investigation.

April 6, 2004: Couple's attorney David Steen notifies the Court they will exercise Fifth Amendment right to remain silent because they're subject of a criminal investigation by the U.S. Attorney's Office.

Feb. 24, 2005: Florida Supreme Court accepts Brian Almengual's resignation.

May 11, 2005: Indictment issued for the couple by federal grand jury

June 17, 2005: Courts finds defendants qualify for court-appointed counsel.

July 11, 2005: Couple pleads guilty to charges.

Sept. 1, 2005: Florida Supreme Court accepts Warner-Almengual's resignation.

Oct. 17, 2005: Warner-Almengual is sentenced to nine months house arrest and 60 months probation. Brian Almengual is sentenced to 15 months in prison followed by 24 months of supervised release.