A 77-acre tract of land on North International Drive -- directly south of Artegon Marketplace -- is the target of potential seizure and liquidation, part of a fraud judgment by the United Kingdom's highest court totaling nearly $600 million against an Ecuadorian banking family believed to own the property.
In a case that has spanned 20 years and bounced between courts in the Bahamas, England and Florida, a final judgment by Florida's 11th Circuit Court on Nov. 20 now allows Ecuador's government to pursue assets of two members of the Ortega Trujillo family and a holding company they formed, GrowthSpotter has confirmed from Florida and British court records.
One of the largest land parcels under investigation is at 5001 Vanguard St. on North I-Drive, vacant for a decade and once destined for an amusement park. Its ownership LLC had an Ortega connection removed from its management in late 2014, replaced by a Bahamas bank manager believed to be holding the asset on behalf of the family.
This property is one of 10 parcels totaling roughly 140 acres of vacant land north of the International Drive-Kirkman Road intersection that should ripen for development over the next few years, as I-4 Ultimate construction brings an overpass to connect visitors directly between Universal Studios and Orlando Premium Outlets.
HOW IT STARTED
The story begins with the failure of an Ecuadorian bank, Banco Continental, during an economic crisis in the mid-1990s. Ecuador's fourth largest bank at the time, Banco Continental's failure would prompt a federal investigation of the bank's ownership and management, according to case history detailed in UK court records.
Banco Continental was owned and controlled by a well-known family in Ecuador, the Ortegas, made up of six brothers and a sister. The Ortegas had used the bank to lend their own non-banking companies loans totaling $191.9 million.
The Ortegas set up an offshore program in Curacao in 1995 to issue Global Depository Receipts (GDRs) to investors, similar to shares in the bank's interests. The funds used to set up this program were wired from Ecuador, through an international investment bank in the Bahamas.
The Ortega family made Banco Continental (which they owned) trade those loans back to their family in exchange for the GDR shares, like a debt for equity swap.
But the GDRs were worthless. The Ortegas pegged the GDR value to that of the related party loans. Banco Continental lost valuable loans, gained nothing in the swap, and the family gained $191.9 million, according to British court records.
Ecuador's Central Bank had to rescue Banco Continental once it lost the $191.9 million in loans. That's what the Republic of Ecuador is now seeking to recover, with decades of compound interest.
Members of the Ortega family then moved to Miami, set up a variety of businesses and made as many as 20 real estate investments across Florida in the late 1990s through the 2000s. One of those is the 77 acres on North International Drive.
The plaintiff/creditor in the case was Interamerican Asset Management Fund Ltd (IAMF), a Nassau-based company set up by the Ortegas that was the entity they defrauded in three transactions between December 1995 and March 1996. The Republic of Ecuador has stepped in for IAMF to collect the fraud judgment.
The defendants/debtors in the case were Luis Alberto Ortega, Jaime Ortega and Conticorp SA, a holding company the Ortegas created in the British Virgin Islands for Banco Continental. The family's oldest brother, Leonidas Ortega Trujillo, was also a defendant but filed for bankruptcy in Florida on June 11, which protects him from being held financially responsible for this judgment.
Ecuador's Central Bank pursued the case through courts of the Bahamas and UK from 1995 through March of this year, when a judgment for IAMF was granted by the Privy Council of England, equivalent to the United States' Supreme Court.
That judgment against the Ortegas stood at $573.8 million as of March 15, based on the $191 million principal sum and compound interest applied by the UK court. The interest has continued to rise since, putting the total closer to $600 million now.
A judge with Florida's 11th Circuit Court in Miami-Dade County ruled on Nov. 20 to domesticate that foreign court's judgment, setting the stage for property seizure next.
Ecuador is now working with attorneys in the U.S. to go after any assets they can trace back to the Ortega family, in order to satisfy the debt owed.
Attorneys at Liles Gavin, P.A., of Jacksonville, counsel for the Ortegas, did not respond to requests for comment.
Miami-based attorneys with multinational firm K&L Gates LLP, representing the plaintiff IAMF and the Republic of Ecuador, also did not respond to an interview request.
LINK TO I-DRIVE PARCEL
Ecuador's team will have to dig deep into the history of land and business assets in Florida they believe are owned by the Ortegas.
The 77 acres on North I-Drive were bought in March 2005 for $16.6 million by I Drive Investors LLC, according to county records. That entity's original managing member was OKA Orlando LLC, which was registered with Jorge A. Ortega and managed by REDH JVC, an entity that was managed by Jorge A. Ortega and registered with Luis A. Ortega.
That link between Luis A. Ortega and the I-Drive property should allow Ecuador's attorneys to pursue the property in court, even though in late 2014 the management of I Drive Investors LLC was changed, removing any link to the Ortegas.
Last November, OKA Orlando was replaced as managing member with Errata Florida LLC, an entity directed by James Coyle and a bank he manages in Nassau, Guaranty Trust Bank Ltd.
This type of bank in the Bahamas is often used to store assets, with nominees holding them on behalf of an owner.
Using offshore asset management firms has been commonplace for wealthy families in many South American countries as a legitimate way to protect assets in the past against government and economic instability. Ecuador, for example, suffered through a severe financial crisis in 1999, and a coup d'état and currency replacement in 2000.
A writ of execution was issued Dec. 1 for the nearly $600 million in debt, and is being held by the sheriff of Miami-Dade County. K&L Gates' attorneys representing IAMF/Ecuador told the Miami-Dade court on Dec. 1 they believe I Drive Investors LLC plans to transfer or sell its interest in the North I-Drive property to thwart collection efforts.
Depositions are scheduled for the coming weeks in Miami for the management behind LLCs Errata Florida and I Drive Investors (Coyle of Guaranty Trust Bank), Ocean Bank and 10 direct or indirect members of the Ortega family.
On Dec. 10, Miami-Dade Circuit Court Judge John Schlesinger granted judgment for a Dec. 1 motion by IAMF/Ecuador's attorneys to require third-party defendants to testify.
The management of I Drive Investors and Errata Florida will have to testify before the judge on Feb. 1 about their relationship to the Ortegas.
If a Florida court decision in 2016 is made in the Republic of Ecuador's favor, the North I-Drive property would be seized, likely put into receivership, appraised and then sold. The process could take another year or more.