Six South Florida Residents Charged In $36 Million Government Fraud Scheme Involving Low-Income Housing Developments
Six residents of South Florida were charged with conspiring to defraud the United States government by stealing millions of dollars and property intended for the construction of low-income housing developments.
Wifredo A. Ferrer, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Miami Field Office, Nadine Gurley, Special Agent in Charge, United States Department of Housing and Urban Development, Office of Inspector General (HUD-OIG), and Kelly R. Jackson, Special Agent in Charge, Internal Revenue Service, Criminal Investigation (IRS-CI), made the announcement.
The following defendants were charged by criminal information:
- Matthew Greer, 37, of Miami Beach, a former chief executive officer of Carlisle Development Group (“CDG”), a low-income housing developer in Miami;
- Lloyd Boggio, 69, of Coconut Grove, a former chief executive officer of CDG;
- Michael Runyan, 66, of Lighthouse Point, the chief executive officer of BJ&K Construction, Inc., a general contractor in Fort Lauderdale;
- Gonzalo DeRamon, 51, of Coral Gables, a founder of Biscayne Housing Group, Inc. (“BHG”), a low-income housing developer in Miami;
- Michael Cox, 47, of Miami, a co-founder of BHG; and
- Rene Sierra, 57, of Southwest Ranches, a founder of Siltek Affordable Housing LLC (“Siltek”), a general contractor in Plantation.
Greer, Boggio, and DeRamon were charged with two counts of conspiracy to commit theft of government money and property, in violation of Title 18, United States Code, Section 371, an offense punishable by a statutory maximum term of five years in prison as to each count.
Runyan, Cox, and Sierra were charged with one count of conspiracy to commit theft of government money and property, in violation of Title 18, United States Code, Section 371, an offense punishable by a statutory maximum term of five years in prison.
According to allegations contained in the charging documents, Florida Housing Finance Corporation (“FHFC”) issued federal tax credits and grant monies to developers for the construction of low-income housing in Florida. To obtain these federal funds, FHFC required developers to submit proposed development costs, including a construction contract signed by the developer and contractor. The informations allege that the defendants conspired to unjustly enrich themselves by fraudulently inflating the costs of the construction contracts in order to obtain excess federal funds to which they were not entitled, and then to use the proceeds for their own personal use and benefit.
From 2007 to 2012, CDG executives Greer and Boggio allegedly conspired with BJ&K executive Runyan to steal federal tax credits and grant monies, by submitting fraudulently inflated construction contracts to FHFC for eight different low-income housing developments in Miami-Dade County and elsewhere: Brownsville Transit Village II (a 100-unit apartment complex in Brownsville), Brownsville Transit Village III (a 103-unit apartment complex in Brownsville), Brownsville Transit Village IV (a 102-unit apartment complex in Brownsville), Everett Stewart Senior Village (a 96-unit apartment complex in Brownsville), Metro (a 90-unit apartment complex in Overtown), Poinciana Grove (an 80-unit apartment complex in Little Haiti), Villa Patricia III (an 89-unit Apartment complex in Little Haiti), and Wahneta Palms (a 64-unit apartment complex in Polk County).
From 2009 to 2012, BHG founders DeRamon and Cox allegedly conspired with Siltek owner Sierra to steal federal tax credits and grant monies by submitting fraudulently inflated construction contracts to FHFC for four different low-income housing developments in Miami-Dade County: Bonita Cove (a 60-unit apartment complex in Little Haiti), Labre Place (a 90-unit apartment complex in Overtown), Notre Dame (a 64-unit apartment complex in Little Haiti), and Village Carver II (a 90-unit apartment complex in Little Haiti). In addition, DeRamon, Cox, Greer, and Boggio, as alleged in the information, had a side agreement to share in the illegal kickback payments for Labre Place and Village Carver II.
From 2009 to 2012, BHG founders DeRamon and Cox allegedly conspired with Arturo Hevia to steal federal tax credits and grant monies by submitting fraudulently inflated construction contracts to FHFC for two different low-income housing developments in Miami-Dade County: Casa Matias (an 80-unit apartment complex in Homestead) and Georgia Ayers (a 72-unit apartment complex in Opa-Locka).
Court documents allege that as a result of the fraudulently inflated contracts, FHFC allocated more than $36 million in excess tax credits and grant monies for the fourteen low-income developments built by CDG and BHG. Both during and after construction of the developments, the contractors allegedly made periodic kickback payments of the construction inflation monies for the benefit of the CDG and BHG principals, including more than $26 million in kickbacks from Runyan for the benefit of Greer and Boggio; more than $6.2 million in kickbacks from Sierra for the benefit of DeRamon, Cox, Greer, and Boggio; and more than $1 million in kickbacks from Arturo Hevia for the benefit of DeRamon and Cox.
As alleged in the information, the kickback payments were in addition to tens of millions of dollars in FHFC authorized developers’ fees that BHG and CDG were receiving for building the low-income housing developments.
During the course of the investigation, seizure warrants were executed and approximately $10.8 million in proceeds of the alleged thefts of government funds were recovered.
U.S. Attorney Wifredo A. Ferrer stated, “[M]otivated by personal greed, the defendants are charged with stealing tens of millions of dollars of federal funds intended for the construction of housing for the poor, the homeless, and the elderly of South Florida. Our office will vigorously pursue those who line their pockets with federal resources that are intended to benefit vulnerable individuals and families.”
Kelly R. Jackson, Special Agent in Charge, IRS Criminal Investigation, stated, “The Low Income Housing Tax Credit (LIHTC) was created to encourage investment and is an important resource for creating affordable housing in South Florida. LIHTCs were not intended to be a vehicle for get-rich-quick kickback schemes. IRS Criminal Investigation enforces the nation’s tax laws, including those involving LIHTC, and takes particular interest in cases where individuals and corporations fraudulently use credits and/or other government funding mechanisms for their own personal benefit.”
“We are committed to pursuing individuals who attempt to steal funds meant for the less fortunate. HUD-OIG and our law enforcement partners will continue to work jointly in uncovering such schemes in order to bring those responsible to justice,” said Nadine E. Gurley, Special Agent in Charge, HUD-OIG.
An information is merely an allegation and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.
Mr. Ferrer commended the investigative efforts of the FBI, HUD-OIG and IRS-CI. The case is being prosecuted by Assistant U.S. Attorneys Michael R. Sherwin, Michael N. Berger, Evelyn B. Sheehan and Eloisa D. Fernandez.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls. Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.