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A federal magistrate judge has ordered a civil lawsuit against San Antonio attorney Edward Valdespino be sent to arbitration. A Florida company is seeking the return of $5 million from the lawyer.<\/p>\n
Josie Norris\/San Antonio Express-News<\/p>\n
A Florida company sued San Antonio attorney Edward Valdespino for the return of $5 million it gave to him to hold in escrow.<\/p>\n
Courtesy photo<\/p>\n
Three months after San Antonio attorney Edward Valdespino<\/a> failed to comply with a judge\u2019s order to turn over <\/a>$5 million he previously said was in his lawyer trust account, a federal magistrate judge raised questions about \u201cwhat on earth is going on\u201d with the money.<\/p>\n U.S. Magistrate Judge Richard Farrer<\/a> nevertheless ruled that the dispute between Valdespino and a Florida company, which says the attorney was supposed to return the money he held in escrow for it, must be resolved through private arbitration under the terms of an agreement the parties signed.<\/p>\n Article continues below this ad<\/p>\n \u201cThere\u2019s concerns here. There\u2019s equitable concerns here,\u201d Farrer said from the bench Friday. \u201cThere\u2019s concerns and curiosity about what on earth is going on here. But it\u2019s an incomplete record at this stage. And that will all be hashed out in arbitration.\u201d<\/p>\n The ruling sidelines for now Boca Raton, Fla.-based I.C. Deposits Development Inc.\u2019s<\/a> effort to have Valdespino held in contempt and jailed until he produces the $5 million. Farrer said he would stay the company\u2019s federal lawsuit and dismiss the remaining pending motions as moot without prejudice, meaning some of the issues could return to court later.<\/p>\n READ MORE: Florida company asks judge to jail San Antonio lawyer over missing $5M<\/a><\/p>\n San Antonio Express News Logo<\/p>\n Make us a Preferred Source on Google to see more of us when you search.<\/p>\n <\/p>\n Add Preferred Source<\/p>\n <\/a><\/p>\n Farrer emphasized that sending the dispute to arbitration does not necessarily end questions surrounding a Bexar County judge\u2019s May 11 order requiring Valdespino to deposit the $5 million into the court registry.<\/p>\n Article continues below this ad<\/p>\n \u201cI\u2019m not immune to the significant concern and even outrage that I\u2019m detecting from plaintiffs,\u201d the judge\u00a0said. \u201cWe need to figure out what all is going on here. That\u2019s going to happen in the arbitration.\u201d<\/p>\n If events unfolded as I.C. Deposits alleges, Farrer added, \u201cthere will be a reckoning.\u201d<\/p>\n Valdespino did not attend the hearing. His attorneys appeared on his behalf.<\/p>\n After the hearing, his lawyer, Jason Davis<\/a>, declined to answer a reporter\u2019s question about why Valdespino has not returned the $5 million.<\/p>\n Article continues below this ad<\/p>\n \u2018I think they\u2019re gone\u2019<\/p>\n Attorney Kelli Cubeta<\/a>, who represents I.C. Deposits, offered her own explanation during the hearing.<\/p>\n \u201cIt defies logic \u2026 why in the world wouldn\u2019t he just pay these funds,\u201d she told\u00a0Farrer. \u201cWhy? Because I think they\u2019re gone. I think he has lied to the court repeatedly. And there\u2019s got to be consequence for this. Thus far, he has been able to avoid any consequence.\u201d<\/p>\n Cubeta argued the arbitration provision should not be enforced because the escrow agreement was a fraudulent instrument used to induce her client to turn over the $5 million.\u00a0Farrer concluded those challenges should be decided by the arbitrator rather than the court.<\/p>\n Article continues below this ad<\/p>\n I.C. Deposits sued Valdespino<\/a> in April after a private investment transaction involving $5 million the company had placed with him as an escrow agent failed to close.<\/p>\n RELATED: San Antonio attorney faces suits alleging misuse of trust accounts tied to promises of big returns<\/a><\/p>\n The company alleges it transferred the money into\u00a0Valdespino\u2019s IOLTA account in September 2025 after being told the transaction would generate about $50 million in returns. Under the escrow agreement, the $5 million was to be returned if the deal was not completed. An IOLTA account is a lawyer trust account used to hold client or escrow funds.<\/p>\n In an April court filing, Valdespino acknowledged that more than $5 million was in his IOLTA account and that $5 million had been sent to him by I.C. Deposits. A state judge later issued a May 11 temporary injunction requiring him to deposit the money into the Bexar County court registry by 11 a.m. May 14.<\/p>\n Article continues below this ad<\/p>\n The same day he was required to turn over the money,\u00a0Valdespino shifted the lawsuit from state to federal court.<\/p>\n Other allegations<\/p>\n The I.C. Deposits case is not the only time Valdespino has faced allegations over money he was supposed to hold in escrow.<\/p>\n Article continues below this ad<\/p>\n In May, Buffalo, N.Y., couple Kevin and Holly Wyse sued Valdespino and his former law firm, Naman Howell<\/a>,\u00a0alleging they were persuaded to wire $1 million into his IOLTA account after being promised their money would grow to $10 million within 45 days.<\/p>\n The Wyses allege their lawsuit is at least the fourth in which parties have sued seeking the return of money transferred to Valdespino, describing the cases as a recurring pattern. Valdespino has said he \u201cvehemently\u201d denies the allegations against him. Naman Howell was later dismissed from the case and cut ties with Valdespino.<\/p>\n<\/p>\n