Embezzlement and plundering of public and federal monies, sadly, are recurring themes in Miami-Dade and many of its cities. The crime against the community often manifests itself in shady payments routed through ghost companies, construction change orders and kickbacks from the selected contractors.
In these cases, taxpayers and governments suffer the most. These are heinous crimes because they plunder precisely the programs meant to provide social assistance to the have-nots. These projects could be life-changing for some of our residents, yet money assigned to them often fattens the pockets of the haves.
That’s why the latest allegations of fraud are so egregious in our community, which is desperately in need of affordable and, especially, low-income housing.
The Miami-based Carlisle Development Group was once the state’s biggest developer of affordable housing, with a reputation for building some of South Florida’s finest low-income apartments. Last week, prosecutors filed charges against its respected leaders, principals Matthew Greer and Lloyd Boggio, saying that they stole tens of millions of dollars in federal subsidies by inflating construction costs and receiving kickbacks from contractors.
Mr. Greer, Carlisle’s chief executive officer, and Mr. Boggio, the company’s founder, are charged with conspiring with others in a fraud scheme by padding the cost of eight projects in Overtown and Little Haiti and six other government-subsidized projects in other parts of the county. The duo even set up shell companies with the names of Marquesas Capital and Caesar and Cleopatra Investments to secretly collect the illicit payments, federal prosecutors said. In total, Mr. Greer, Mr. Boggio and four other defendants are accused of plundering $36 million in U.S. tax credits to line their pockets.
The allegations alone are an insult to our community. The evidence, so far, damning: As reported by Miami Herald’s Jay Weaver last month, Miami developer Michael Cox, head of the Biscayne Housing Group, lashes out in an email 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 rake in higher government subsidies: “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.”
For the record, U.S. prosecutors say that Mr. Cox eventually succumbed to the alleged scheme. This community, no doubt, is eager to hear from the other side.
We’ve been here before. Back in 2006, developer Oscar Rivero was the focus of a sweeping affordable-housing scandal in Miami. He took at least $736,000 in money from the Miami-Dade Housing Agency — and ended up buying himself a pretty swank home in South Miami. Meanwhile low-income, elderly Little Havana residents who would have benefited from the 54 homes he was supposed to build were out of luck. Rivero went to prison, but for a disappointingly short time.
In the Carlisle case, U.S. Attorney Wifredo Ferrer said that the defendants were “motivated by personal greed.” His office has recovered nearly $11 million in government funds related to the arrests. Good job. No matter the outcome of this case, governments should demand much greater accountability as to whether developers are using public funds as intended.