The federal prosecution of an elaborate affordable-housing racket that cost taxpayers $36 million has reached a critical turning point this week: Four prominent Miami developers and a major Fort Lauderdale contractor are pleading guilty to theft of government funds.
On Monday, Michael Cox and Gonzalo DeRamon, co-founders of the Biscayne Housing Group, consummated plea deals in Miami federal court. They now stand convicted of conspiring with the top two principals of the Carlisle Development Group — once the state’s biggest affordable housing developer — as well as two South Florida contractors who already pleaded guilty.
Cox, 47, who cooperated with authorities, pleaded to a single conspiracy offense before U.S. District Judge Ursula Ungaro. He faces up to five years at his sentencing in November — though he is expected to receive less punishment because of his assistance — and must pay back $4.4 million to the federal government.
“This is an important step because he wants to make right what went wrong,” his defense attorney, Brett Tolman, said after Monday’s plea hearing. “He wants to account for every dollar that needs to be paid back.”
His former partner, DeRamon, 51, pleaded to two conspiracy charges, which carry up to 10 years. He must also pay back $4.4 million as part of his punishment at his sentencing in November.
Combined, Cox and DeRamon pocketed between $7 million and $9.5 million in illegal kickbacks from contractors in their Miami-Dade affordable-housing developments, according to their plea agreements.
Also on Monday, Michael Runyan, president of BJ&K Construction Services in Fort Lauderdale, finalized a plea deal for his pivotal role of paying millions of dollars in kickbacks to Carlisle’s senior executives. Runyan, 66, who also cooperated with prosecutors, pleaded to a lone conspiracy charge. He faces up to five years in prison at his sentencing in November and must repay about $1.15 million that he pocketed from the scheme.
On Friday, Matthew Greer, 37, the onetime chief executive officer of Miami-based Carlisle, and the company’s co-founder, Lloyd Boggio, 69, are planning to plead guilty to two conspiracy offenses, according to court records. They’re accused of accepting more than $26 million in unlawful funds from Runyan.
Overall, Greer and Boggio are accused of conspiring with Biscayne’s Cox and DeRamon as well as Runyan and another contractor to steal a total of $36 million in federal housing subsidies by inflating construction costs and receiving kickbacks, charges filed in Miami federal court in July revealed.
In total, Greer, Boggio and the other defendants are accused of plundering U.S. tax credits to line their pockets from 14 government-subsidized projects built mostly for the poor in Miami-Dade County. All but one were built in the low-income Brownsville, Little Haiti and Overtown neighborhoods between 2007 and 2012.
Greer and Boggio even set up shell companies with the names of Marquesas Capital and Caesar and Cleopatra Investments to collect the illicit payments secretly, prosecutors Michael Sherwin and Michael Berger said in court papers. The contractors kept records of the kickbacks on “tick” sheets, they said.
U.S. Attorney Wifredo Ferrer said his office has recovered nearly $11 million in government funds stolen by the two Carlisle principals. That money will be returned to the U.S. Treasury Department, not to the tax-credit program for affordable housing run by the state of Florida and Internal Revenue Service.
Boggio had launched Carlisle with the CEO’s father, Bruce Greer, a well-known 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.
Cox and DeRamon are accused of receiving kickbacks from two 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, sold the land for the project, known as Labre Place.
Another defendant, Rene Sierra, 57, president of Plantation-based contractor Siltek, pleaded guilty in July to conspiring with Cox, DeRamon, Greer and Boggio in four projects. Still another defendant, Arturo Hevia, a Doral contractor, pleaded guilty in July to conspiring with Cox and DeRamon in two projects.
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.