A Miami judge has ruled that a former principal in a series of investment firms is entitled to, at a minimum, answers on money he lost when he purportedly sold his interests in the firms to his onetime partner.

Circuit Judge William Thomas of the Eleventh Judicial Circuit ruled April 20 that defendant James Fratangelo must provide an equitable accounting of all assets owned by the companies to plaintiff John Olsen, and any funds that may be due to Olsen.

Although neither party acted in a completely forthright manner, Thomas said, he found that Olsen proved during a bench trial that there was evidence that Fratangelo owed a duty to Olsen to act fairly.

“Olsen believed that Fratangelo would deal with him honestly, fairly, and in good faith,” Thomas said. Instead, the evidence showed that Fratangelo had an “intent to destroy” Olsen, the judge said.

It was not clear in the ruling what assets or funds may be due to Olsen.

Olsen's lead attorney, Mark Auerbacher of the Miami office of Buchanan Ingersoll & Rooney, said Olsen feels “very pleased and very validated by the ruling.”

“Our client proved liability and demonstrated that Fratangelo was diverting and hiding assets,” he added.

Fratangelo's attorney, Jose Sepulveda of Stearns Weaver Miller Weissler Alhadeff & Sitterson in Miami, did not return a call seeking comment.

The case originally had been assigned to Judge John Thornton Jr. He recused, however, because his son, Ryan Thornton, is an associate at Stearns Weaver. It is Judge Thornton's practice to recuse from any case in which Stearns Weaver represents a party, the Daily Business Review previously reported.

Olsen and Fratangelo, according to Thomas' ruling, began their business relationship in 2007 to invest in various performing and nonperforming assets. At the time, Fratangelo was working for a company that sold mortgage-backed assets to the company jointly owned by Olsen and Fratangelo, the judge said.

At the beginning of the business relationship, Fratangelo remained a silent partner because of the conflict of interest. It was understood that Fratangelo would become a 50 percent owner of the companies once he resolved his conflict of interest. That conflict was resolved in 2011, when Fratangelo left his employer to become a public co-owner of the joint companies, according to the decision.

“This was the first deception created by the parties intended for personal gain,” Thomas said.

In 2013, the two began seeking financing from the Bank of the Internet, but were unable to do so because Olsen owed back taxes to the Internal Revenue Service, according to the ruling. To resolve that issue, Olsen transferred the assets of the primary company, 21 AMH, to Fratangelo.

Thomas said it was clear, however, that Olsen never intended to dissolve his interests.

“[I]t is clear to this court that this action by Olsen and Fratangelo was yet another example of the parties' deception intended for personal gain,” the judge said.

Fratangelo was supposed to pay Olsen $300,000 for the transfer, but the money was never paid, Thomas said.

In March 2014, Fratangelo sought to divest himself entirely from all of the firms because of personal differences with Olsen, and the two began working on a plan for for Olsen's compensation.

“The court finds that Olsen relied on Fratangelo's representation during the negotiations,” Thomas said, adding that the evidence shows that Fratangelo began moving and selling assets without Olsen's knowledge.

“Yet another act of deception for personal gain,” the judge wrote.

After the accounting is complete, Thomas said he would enter a judgment in Olsen's favor of the amount due to him.