Miami-based Davos Financial Group CEO David Osio was dealt another legal blow this week when Florida’s Third District Court of Appeal rejected his efforts to immunize various offshore financial entities from responsibility in a lawsuit filed by former Davos partners. The April 29 ruling rebuffs Osio’s latest attempt to distance himself from the U.S. courts in the suit, brought by former partners Rodrigo Fernandez and Andres Sotillo.
By upholding a trial court’s earlier denial of Davos’ motion to dismiss for lack of personal jurisdiction in Florida, the appeals court allows international bankers Fernandez and Sotillo to proceed with their 2011 fraud lawsuit against Osio and the Davos Group. Fernandez and Sotillo were ousted from a partnership interest in Davos in 2010 when they learned of a number of improper actions that Osio had taken. Osio has also been dogged by allegations of wrongdoing in other jurisdictions.
Osio tried to deflect responsibility to his mother, Isabel Cecilia Montiel de Osio, claiming that the partnership assets were part of an offshore trust that was set up to benefit her. He alleged that she had loaned money to various Davos Group financial services companies but was unable to specify to which companies and in what amounts.
Several Davos companies moved to dismiss the lawsuit, claiming that they were exclusively foreign and had no contacts with the State of Florida. However, evidence discovered and shown to the trial court proved that all the entities were controlled and directed from Miami. Osio himself testified that he controlled the trust and its constituent entities and that he could do whatever he wanted with the companies and their assets, including granting himself a loan to purchase a luxury apartment in Paris.
“The evidence in the record overwhelmingly showed that the offshore entities in the Davos Group were foreign in name only,” said Diaz Reus partner Brant Hadaway, who argued the case in both the trial and appellate courts. “Osio and his right-hand person, group comptroller Naemar Beltran, also a defendant in the lawsuit, orchestrated everything from an office in Coconut Grove, right across the street from Miami City Hall. These companies are no more ‘foreign’ than I am.”
Diaz Reus partner Gary Davidson added, “One of the companies is an Antigua bank that first came to court saying, under oath, that it did no business in Florida. But that turned out to be completely untrue – the bank had millions of dollars in mortgages on South Florida real estate, despite not having registered to do business in Florida, and every key decision was made from Miami.”
“It was incredible,” said Hadaway. “As a witness for the bank, they produced an employee from Antigua who had no idea what was going on. She didn’t even know who the bank’s customers were. And of course she didn’t know; she was in Antigua. The decisions were being made here, in Miami.”
“The fact that the appellate court affirmed without an opinion strongly indicates that the panel saw this as an open and shut case,” said Hadaway. “The next step will be to depose Mr. Osio’s mother, who is also a defendant in the case. A motion to compel her deposition has been filed.”