Sunny Isles Beach commission candidate David Grossman is running on a platform of government transparency and financial accountability, but he hasn’t paid a $32,000 state fine for allegedly participating in a scheme to fool investors.
In 2015, the Florida Office of Financial Regulation found that Grossman had tricked investors into believing they could buy stock in the popular video game company Virgin Gaming, records show. Operating out of a boiler room, Grossman called potential investors and told them that the money they contributed would be used to buy Virgin Gaming stock, according to a consent agreement the candidate reached with the Office of Financial Regulation in 2015.
Instead, the agreement alleges, Grossman and other participants used the money for their own benefit and to bankroll their operation. Grossman was paid more than $17,000 of the investors’ money and the company where he served as president, Grossman & Stein, Inc., was paid another $21,000, according to the agreement. Other South Florida residents and companies were also accused of participating in the scheme.
State regulators found that Grossman had engaged in fraud to obtain money, sold stock without a license and offered and sold unregistered stock. The consent agreement did not require Grossman to admit or deny the findings, but stipulated that he had to pay a $32,000 fine within 90 days and would be banned from working as a stock dealer or investment adviser for 12 years. Office of Financial Regulation spokeswoman Jamie Mongiovi said that the fine was referred to a collection agency in November 2015 and has not yet been paid.
Grossman, one of two city commission candidates headed to a Dec. 4 run-off election, declined to comment on the unpaid fine. In a written response filed with the state’s Division of Administrative Hearings in 2015, Grossman denied allegations that he had engaged in fraud and led investors to believe they were buying shares of Virgin Gaming.
The Office of Financial Regulation’s findings and the unpaid fine appear to be at odds with Grossman’s platform as a candidate for Sunny Isles Beach’s five-member city commission. Grossman said during an interview in September that, if elected, he would focus on making the city government more transparent and a better steward of taxpayer dollars.
“My first issue is government transparency,” Grossman said. “My whole campaign is based on accountability and accessibility.”
Grossman accused the current commission of “very poor planning and execution” on recent projects, including the installation of showers on the beach and construction on 174th Street. “I think there’s a low-grade contempt that comes out of City Hall that shows itself in the lack of consideration of how they spend our money,” he said.
Grossman & Stein, Inc., was shut down in 2014, records show, and Grossman, 39, said he now works as a lease broker at Evolution Leasing, a company run by his brother. The candidate is running for Seat 2 on the city commission, which represents a section of Sunny Isles Beach between 172nd and 178th streets. The commission is a nonpartisan body whose members serve four-year terms.
Three candidates ran for Seat 2 in the Nov. 6 elections, but none of them secured more than 50 percent of the vote. Grossman and Alex Lama, both political newcomers, are facing off again in a run-off election.