Former Miami Beach developer Michael Stern faces more prison time in fraud plea
06/30/2014 3:11 PM
06/30/2014 5:19 PM
Already jailed for swindling an NFL player in California, former Miami Beach developer and one-time government informant Michael A. Stern faces up to eight years in prison after pleading guilty to collecting about $20 million from fraudulent mortgages on his Collins Avenue properties.
In a plea deal, Stern admitted using the identity of two business partners to buy beach properties in their name and then taking out mortgages without their knowledge, keeping the money for himself. Stern, 54, who pleaded guilty to one count of mail fraud, will be sentenced on Sept. 10 in federal court.
Under the plea agreement reached Friday, Stern’s federal sentence would run concurrently with his five-year prison term imposed last year in California, where he was convicted of fleecing former Indianapolis Colts linebacker Dwight Freeney in a bogus restaurant investment deal. Freeney is now with the San Diego Chargers.
At the peak of the real estate boom in 2007, Stern was working with Miami-Dade prosecutors as a confidential informant in a Miami Beach City Hall bribery probe. Stern said he paid off building officials and planners with more than $100,000 in gifts, and he wore hidden microphones and video cameras to catch them on tape. Three Miami Beach building officials were convicted in the investigation.
But while working as an informant, Stern also was racking up seven-figure mortgages on many of his properties — mortgages based on false information or forged signatures, federal prosecutor Roger Cruz charged in a 2012 indictment.
Stern was accused of using the identities of Miami Beach developer Rita Starr and her brother, Steven, without their knowledge, to refinance the mortgage on one corner property that extended from 215 Sixth St. to 604-608 Collins Ave., according to a statement filed with his plea deal.
Stern forged their signatures on the mortgage loan documents, the statement said. The settlement agent diverted most of the $6 million proceeds to Stern.
“Stern diverted millions of dollars in fraud proceeds from this transaction and other real property transactions for his personal use and benefit, and to further the fraud scheme,” according to the statement.
But getting any money out of Stern for his victims, including the Starrs, could prove difficult. In 2009, the former developer filed for bankruptcy protection, claiming more than $52 million in debts. A bankruptcy trustee already disposed of many of his assets.
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