The Miami-based Carlisle Development Group, once the state’s biggest developer of affordable housing, had a reputation for building some of South Florida’s finest low-income apartments — including a tower in the historic black neighborhood of Overtown with after-school care and computer labs.
What no one knew was that its once-lauded leaders, principals Matthew Greer and Lloyd Boggio, stole tens of millions of dollars in U.S. government subsidies by inflating construction costs and receiving kickbacks from contractors, according to charges filed in Miami federal court Tuesday.
They even set up shell companies with the names of Marquesas Capital and Caesar and Cleopatra Investments to collect the illicit payments secretly, prosecutors said.
In total, Greer, Boggio and four other defendants were accused of plundering $36 million in U.S. tax credits to line their pockets from 14 government-subsidized projects built mostly in Miami-Dade County.
U.S. Attorney Wifredo Ferrer, noting that the defendants were already guaranteed millions in fees from these projects, said they were “motivated by personal greed” to steal additional “federal funds intended for the construction of housing for the poor, the homeless and the elderly of South Florida.”
He said his office has recovered nearly $11 million in government funds stolen by the defendants.
Greer, Carlisle’s chief executive officer, and Boggio, the company’s founder, are charged with conspiring with others in a fraud scheme by padding the cost of eight inner-city housing projects in Overtown, Little Haiti and Brownsville to qualify for larger federal tax credits and then pocketing the excess profits among themselves, according to court records.
Greer, 37, and Boggio, 69, charged with two conspiracy offenses that carry up to 10 years in prison, received more than $26 million in kickbacks from a single Fort Lauderdale construction company that worked on most of their projects from 2007 to 2012.
Boggio had launched Carlisle with the CEO’s father, Bruce Greer, a prominent Miami lawyer, in 1997. Greer’s son, Matthew, later bought out Boggio’s interest. Matthew Greer’s mother is Evelyn Greer, a former Pinecrest mayor and Miami-Dade School Board member.
Others charged Tuesday in the high-profile case are Carlisle’s partners in other affordable housing deals: Michael Cox, 47, former president of the Biscayne Housing Group, and Gonzalo DeRamon, 51, a company co-founder, who was originally arrested in June.
Cox and DeRamon are accused of pocketing more than $7 million in kickbacks from contractors who worked on six affordable housing projects — including a high-rise apartment building in Overtown that was jointly developed with Greer and Boggio, who also received illegal payments in the deal, prosecutors said. Camillus House, a major nonprofit agency that provides shelter and services for the county’s homeless, donated the land for the project, known as Labre Place.
Also charged: Michael Runyan, 66, president of the Fort Lauderdale-based family construction company BJ&K, which built many of Carlisle’s projects.
Another defendant: Rene Sierra, 57, president of Plantation-based contractor Siltek, was initially charged in June and plans to plead guilty Thursday. A seventh defendant, Arturo Hevia, a Doral contractor, was also charged in June and already pleaded guilty.
The remaining defendants are scheduled to appear in Miami federal court this month, when they are likely to receive bonds and enter not guilty pleas. All are being charged by information — not by indictment — a telltale sign in the federal justice system that they are negotiating plea deals and likely to plead guilty in the future. Among those who already cooperated with the U.S. attorney’s office during the four-year investigation: Cox and Runyan.
On Tuesday, Greer’s defense attorneys, Roy Black, Jackie Perczek and Hy Shapiro, declined to comment. Boggio’s defense attorney, Scott Srebnick, also declined.
Until the Miami Herald first reported in 2013 that Carlisle’s top principals were under investigation by a federal grand jury, the company had been among the largest affordable housing developers in the country. Carlisle, which developed dozens of low-income apartment buildings in Florida with both federal and local subsidies, was forced to sell off its few remaining Miami-Dade projects to another development company that year.
The federal investigation into Carlisle started in late 2011 when two senior executives quit and went to the U.S. attorney's office with their allegations of fraud, according to their lawyers, Alvin and Josh Entin. Carlisle’s former director of finance, Mitch Rosenstein, and senior vice president, Oscar Sol, had a falling out with Greer, the CEO. The two former executives assisted the FBI, Internal Revenue Service and U.S. attorney’s office in the investigation and were not charged.
“We were cooperating with them from Day 1,” the Entins said. “We brought the whole thing to their attention. These charges and likely pleas are a vindication of the honesty and integrity of Mitch Rosenstein and Oscar Sol.”
Greer, Boggio and the other defendants are accused of committing fraud by inflating construction costs of rental apartments to generate higher government-issued tax credits for their projects, according to court records. Prosecutors alleged that Carlisle and Biscayne Housing Group worked in cahoots with BJ&K Construction Services and other contractors to divert the resulting profits unlawfully.
Tax-credit applications are reviewed carefully on a project-by-project basis by the Florida Housing Finance Corp., which doles out millions of dollars in credits under strict Internal Revenue Service guidelines. The bids, scrutinized at the front end by developers’ lawyers, are later examined by the state’s underwriters and auditors. Approved credits are then sold to investors, such as banks, to generate tax deductions for them and investment capital for affordable-housing developments.
An email spotlighted in a recent federal criminal complaint, which charged Biscayne Housing’s DeRamon with stealing government money for affordable housing, made a strong case that prosecutors Michael Sherwin and Michael Berger were aiming at bigger targets.
The May 2009 email shows how the alleged plot was hatched between two of the most prominent development companies in the business.
At first, the email shows Cox, president of Biscayne Housing, expressing anger that his partners in an Overtown apartment project would threaten him for refusing to inflate the construction cost by $2.8 million so they could all get richer off higher government subsidies.
Cox asserted in the email that the venture’s partners “obviously falsified construction contracts” for the affordable housing project called Labre Place so they could qualify for more government funds.
“We are angry and disappointed that the only response we have received about this issue is first an offer ...to ‘share the excess,’ and then, when we refused, a threat that if we keep raising this issue, [your company] will implicate BHG,” Cox wrote to the partners, identified only as unnamed co-conspirators in the May 30, 2009, email. Those unnamed suspects, according to law enforcement sources, were Greer and Boggio, principals of the Carlisle Development Group — at the time, Florida's largest developer of affordable housing.
“Implicate us in what?” wrote Cox, who copied Biscayne Housing's DeRamon on the email. “Please, go ahead.”
But instead of sticking to their initial response, Cox and DeRamon would eventually go along with their partners’ alleged ploy to profit off the poor.