BDO Seeks Mistrial in Fraud Case

In violation of the judge's order, a plaintiff's attorney told jurors that shortly after the fraud was discovered at the firm's audit client E.S. B...
Dave Cook and Stephen TaubMarch 2, 2007

Attorneys for BDO Seidman have called for a mistrial in the $170 million fraud case brought by Portugal-based Banco Espirito Santo, reported The Miami Herald.

According to the newspaper, defense attorneys made their motion after a plaintiff’s attorney, while questioning a witness, referred to the suicide of a BDO executive in 2003. The death reportedly took place shortly after a $220 million fraud was discovered at a BDO audit client, financial-services firm E.S. Bankest.

Banco Espirito Santo filed suit against BDO in 2004, accusing it of unprofessional conduct and failing to uncover the Bankest fraud, which allegedly cost the bank $170 million, the newspaper noted. Bankest is no longer in business.

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BDO has reportedly asserted that Bankest managers appointed by the bank were responsible for the fraud and concealed it.

The Herald stressed that there has been no suggestion that the executive’s death was connected to the fraud. And indeed, before testimony began, Miami-Dade Circuit Judge Jose Rodriguez ruled that to avoid unduly prejudicing the jury, the suicide must not be mentioned in its presence.

This “is the 15th motion [BDO] has made since the trial began,” a spokesman for the bank told the newspaper in an E-mail. “The judge considers each motion on its merits.”

Judge Rodriguez also recently ruled that no evidence had been presented to establish a claim by the bank against BDO International, which coordinates efforts among the 95 BDO firms in its network, and ruled that it should be removed from the case, according to the Herald.