Aquatera

You are correct. I use to work for AmSouth in Birmingham as a lender. I saw a many go to jail for BANK FRAUD!

So, can we sum up your position as

FOR: Fraud
AGAINST: Banks

and, "People get what they deserve"?

So, can we sum up your position as

FOR: Fraud
AGAINST: Banks

and, "People get what they deserve"?

That is your assumption.

I must say the Home Builders had their convention here last week. Not a happy bunch, and much smaller turnout compared to years past. Many builders are very over-leveraged. The buyers aren't there , and the giveaways aren't helping as much as price discounts, at least in this market for new construction. Should we book them all now, or send them over to Shelly's place for rehabilitation?

I must say the Home Builders had their convention here last week. Not a happy bunch, and much smaller turnout compared to years past. Many builders are very over-leveraged. The buyers aren't there , and the giveaways aren't helping as much as price discounts, at least in this market for new construction. Should we book them all now, or send them over to Shelly's place for rehabilitation?

I heard the same. But this to shall pass.

I heard the same. But this to shall pass.

Maybe, and if so, not for 5 or more years.

Maybe, and if so, not for 5 or more years.

fisher, really? 5 years?

I must say the Home Builders had their convention here last week. Not a happy bunch, and much smaller turnout compared to years past. Many builders are very over-leveraged. The buyers aren't there , and the giveaways aren't helping as much as price discounts, at least in this market for new construction. Should we book them all now, or send them over to Shelly's place for rehabilitation?

"Those the gods would humble, they first make proud."


.

I'm speaking in the general sense. We have had our share of overconfidence and mortgage fraud and condo project implosions here in Tampa. Lots of projects that were timed just terribly, and we've had a significant amount of fraud cases. And the Tampa area still is a reasonably stable market (for now). The price declines haven't been too bad but inventory is high. It is much worse in other markets.

I should clarify that I don't believe the Aquatera story (whatever it truly is) is a common one. But c'mon -- the swing from outrageous optimism to guarded concern to bust is playing out all over the place.

Tampa,

You've got a pretty good story unraveling in your neck of the woods with the Trump Tower saga...and it's even got a Walton County connection!!

Trump Tower Condo Buyers Sue, Doubt Completion
By SHANNON BEHNKEN The Tampa Tribune

Published: Feb 14, 2007

TAMPA - Two buyers in the stalled Trump Tower Tampa condominium say it is impossible for developers to finish the 52-story tower by the time their contract mandates. The buyers want their money back and have sued to get out of the deal.

The buyers' attorney, Thomas Long, said his clients don't believe the riverfront condo will be built and feel misled. The fact that the developers don't have financing more than two years after announcing the project, combined with unresolved ownership issues and problems with unstable ground at the site, make it unlikely the tower will be completed by the December 2008 deadline stated in the contract, he said.

In recent months, developers said it would be mid-2009 before they finish construction.

"When you do a high-rise, particularly on land on the riverfront in a marshy area, you better make sure you can build it - before you start collecting the profits," said Long, of the Tampa firm Barnett, Bolt, Kirkwood, Long & McBride.

The developers named in the suit, Tampa-based SimDag LLC and Orlando-based private equity firm Mirabilis Ventures, did not return phone calls seeking comment.

The suit was filed in Hillsborough County Circuit Court on Jan. 31 and says the buyers were lured into purchasing a $1.4 million condo because they believed Donald Trump owned "a substantial stake" of the project.

"Donald Trump has boasted that his partnership with SimDag is more than a licensing or marketing arrangement," the suit states.

Long said his clients, Louis Ricci and Joe Shultz, both of Walton County , near Pensacola, have since learned that the developers paid the real estate mogul for the naming rights of the building.

<insert Soap Opera organ bridge music here>

"If you look at the Web site, it says Trump is a partner," Long said. "Now, we don't know where Donald Trump fits into this deal."

Trump has said that SimDag, the original developer, paid him an undisclosed sum in exchange for naming rights. As part of the agreement, the developers must build the tower to certain specifications and standards of the Trump brand, but no one from the Trump organization is involved in the construction process.

Trump said Monday he is frustrated with the lack of progress at the site, at 111 S. Ashley Drive. Trump has 72 condo projects in various stages of development and said the Tampa project is the only one not moving forward. It is unclear how many are licensing agreements and what his involvement is in those projects.

Trump revealed Monday by telephone that The Related Group, a Miami developer partnering with Trump on three towers in South Florida, wants to purchase or to become a partner on the Tampa project.

Trump tried to buy out SimDag last fall, but the developer instead sold to Orlando developer Mirabilis. SimDag remained as a partner. At the time, Mirabilis said it had also purchased SimDag's Antigua Bay project in Clearwater and planned to buy seven to nine other SimDag developments.

David Hooks, Trump Tower Tampa spokesman, said he was unaware of the lawsuit and could not comment. Trump could not be reached.

Darryl C. Wilson, a professor of property law at Stetson University, said the suit sounds weak on the surface.

"It's pretty difficult for them to get any relief right now because there hasn't been any breach of contract at this time," Wilson said. "You have to give them a chance to fulfill their contract."

The plaintiffs, who purchased a unit through their company, NLR T LLC, made a 20 percent deposit in August 2005. The suit sayshe deposit consisted of $148,200 cash and a letter of credit in the same amount.

Wilson said it may be too early for others to sue, but if these plaintiffs are awarded their money back, "it would certainly open the floodgates for other buyers to follow."

The suit is the latest in a series of issues surrounding the $260 million riverfront project.

SimDag has dismissed two contractors and passed on at least $40 million in construction increases to buyers who have contracts to purchase. Expected completion dates have been pushed back numerous times.

The project is being rebid to subcontractors, and some companies that have completed work say they haven't been paid. Four have filed liens on the property totaling $3.3 million.

What is the deal with the Walton County folks?

What is the deal with the Walton County folks?

What do you mean?

What do you mean?

Shelly posted this ""Donald Trump has boasted that his partnership with SimDag is more than a licensing or marketing arrangement," the suit states.

Long said his clients, Louis Ricci and Joe Shultz, both of Walton County , near Pensacola, have since learned that the developers paid the real estate mogul for the naming rights of the building."

What is the deal with the Walton County folks?

They're the protagonists of the headline story.


.

Oh.

They're the protagonists of the headline story.


.

What I'm trying to figure out is what they were doing chasing real estate in Tampa. Weren't there plenty of prettier projects in SoWal?

Thanks for the article -- somehow I had missed the latest in this "project." The Trump Tower is the most high-profile troubled development but there are SO many others. A number of condos won't be built and many planned apartment-to-condo conversions will not be done after all. Thankfully.

Even the most bulletproof neighborhoods are feeling it. About a year ago, a woman a couple of blocks away decided to convert her eight-lot "estate" in the fancy old-money golf course neighborhood into a small development. :shock: She had her 1920s brick Tudor moved to a corner of the huge lot and big signs immediately went up advertising her home and seven others in the $1-million to $2-million range. I guess she didn't realize that people did not want to overpay so they could be squeezed into the edge of the development along a fairly busy road. The big signs are down and advertising is now non-existent, and the old house looks forlorn and unrepaired in the corner, with plywood all over it. I am sure the neighbors are .

And the hits just keep on coming folks. Here's the story of another "Investulators Gone Wild" story from Florida

For One Condo Developer,
Boom Ends With Arrest
By Alex Frangos
From The Wall Street Journal Online

The condominium boom that ended last year made a lot of developers very rich. Aleem Hussain, a journeyman property salesman with a winsome personality, wanted to be one of them.

He formed his real-estate company in 2004, calling it Main Street USA, after a nearby Disney World attraction. He bought a complex of 27 aging, two-story apartment houses in Orlando and set out to convert them into condos. His timing looked favorable. That year, for the first time, the average price of a condo in the U.S. exceeded that of a single-family home, and in the Orlando area, condo and house prices jumped 15%.

But not much has gone as planned for Mr. Hussain, 42 years old, nor has it for his hundreds of investors, who include a bunch of local sheriff's deputies. Today, Mr. Hussain's company is being liquidated by a federal bankruptcy court, and he is residing in the Seminole County jail, charged with 23 counts of federal mail and wire fraud.

Mr. Hussain's rise and fall illustrates one of the hazards of a frothy property market: inexperienced developers get in over their heads and drag unsophisticated investors down with them. "Schoolteachers, cops, doctors, priests, everyone thought they were Donald Trump," says Lewis Freeman, the court-appointed trustee administering Main Street's bankruptcy proceeding. Mr. Hussain's company, he contends, was a "microcosm of the total market. You had a lot of unqualified people getting easy money and able to go into businesses in which they didn't know what they were doing."

.....LINK TO STORY

If the market had not collapsed they would have been called brilliant. When things go south it is called "Fraud"

BB,
In the story in the post above, it appears Mr Hussain's lawyers feel the same way:

------------------

"In October, Mr. Hussain rented a car and drove to Atlanta to catch a flight to Costa Rica. U.S. Marshals, alerted by federal investigators in Orlando, met him at the gate and arrested him.

A federal grand jury indicted him on 23 counts of mail and wire fraud. Among the accusations: He falsely represented to investors that their money would be kept in the REIT, when in reality there was no REIT and the money sat in a checking account. And he told investors their dividend payments came from investment profits, when he actually was paying them from money invested by others.

Investigators also say Main Street sold condos at inflated prices to Mr. Hussain's friends or relatives to generate misleading appraisals that justified the higher prices paid by outside buyers.

Mr. Hussain's lawyer, Mr. Lenihan, says his client wasn't trying to flee the country, but was going to Costa Rica and Nicaragua for business and charity purposes. He argues that prosecutors have singled out his client, in part because of his Middle Eastern sounding name, when others at the company were also responsible. "This thing was not set up as a scheme to defraud people," he says. "This is what happens to good people with a good idea and lousy timing who get into trouble." Mr. Hussain's trial is scheduled for April.

trump case - is this the same louis ricci as below?

U.S. Department of Justice
United States Attorney
Western District of Tennessee
800 Federal Office Building
Ph: (901) 544-4231
Memphis, Tennessee 38103
Fax: (901) 544-4230
TTY: (901) 544-3054
PRESS RELEASE
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION
(November 13, 2001)
CONTACT: Leigh Ann Jordan
(901) 544-4231
FORMER AMERICAN NATIONAL MORTGAGE EMPLOYEE PLEADS GUILTY
Terrell L. Harris, United States Attorney for the Western District of Tennessee,
announced today that Norman Louis Ricci, Jr., entered a guilty plea to a criminal
information filed in United States District Court in Memphis, Tennessee. The one-count
information filed by the United States Attorneys Office charged that beginning on or
about May 10, 1998, and continuing sometime in April 2000, Ricci formerly employed at
American National Mortgage, Inc. (ANM) conspired with others to violate federal mail,
wire and bank fraud statutes. According to the information, Ricci was employed at
ANM from approximately December 1993 until approximately February 2000, and in
early 1999, he became president and part owner of Sugar Beach, LLC. The information
alleges that conspirators sought to enrich themselves and minimize losses to ANM.
According to the information the conspirators accomplished the objects of the
conspiracy by selling mortgage loans to investors knowing that the values of
properties securing the loans were falsely inflated and that the loan files contained
false and fraudulent loan underwriting documents and HUD-1s. In furtherance of the
conspiracy, the information alleges that ?between May 10, 1998, and July 1998, Ricci
discussed with other conspirators the need to sell certain loans funded through ANM?s
warehouse line of credit and the fact that some investors were raising questions about
the validity of appraisals of the properties securing the loans.? The information further
alleges that in ?July 1998, Ricci encouraged another conspirator to engage in property
?flips? for the purpose of creating false comparable sales prices to justify false and
fraudulent appraisals of properties securing the loans ANM needed to sell.? The
information also alleges that in February and March 2000, Ricci and other conspirators
caused the making of mortgage loans to finance the purchase of two properties in
Germantown, Tennessee, knowing that false and fraudulent loan underwriting
documents and HUD-1s were being used in support of the loans.
***MORE***
[FONT=arial,sans-serif]Page 2[/FONT]
Among the obligations imposed upon Ricci under the terms of a written plea
agreement filed by the United States, Ricci will continue to provide ?complete and
truthful information? and ?to testify completely and truthfully? at future
proceedings. If Ricci fulfills all of his obligations under the terms of the
agreement, the United States will recommend a sentence of imprisonment not to
exceed 12 months. The United States also agreed not to bring other charges
against Ricci arising from his participation in the conspiracy described in the
information. The maximum penalty Ricci could face for a violation of the Federal
conspiracy statute (Title 18, United States Code, Section 371) is five years
imprisonment and a $250,000 fine.
The matter is being prosecuted by Assistant U.S. Attorney Carroll Andre? and
William Clabault of the Criminal Division of the United States Department of
Justice. The matter is being investigated by the Memphis Division of the Federal
Bureau of Investigation, the Memphis Field Office of the United States Postal
Inspection Service, and the United States Department of Housing and Urban
Development Office of Inspector General.
# # # #

BB,
In the story in the post above, it appears Mr Hussain's lawyers feel the same way:

------------------

"In October, Mr. Hussain rented a car and drove to Atlanta to catch a flight to Costa Rica. U.S. Marshals, alerted by federal investigators in Orlando, met him at the gate and arrested him.

A federal grand jury indicted him on 23 counts of mail and wire fraud. Among the accusations: He falsely represented to investors that their money would be kept in the REIT, when in reality there was no REIT and the money sat in a checking account. And he told investors their dividend payments came from investment profits, when he actually was paying them from money invested by others.

Investigators also say Main Street sold condos at inflated prices to Mr. Hussain's friends or relatives to generate misleading appraisals that justified the higher prices paid by outside buyers.

Mr. Hussain's lawyer, Mr. Lenihan, says his client wasn't trying to flee the country, but was going to Costa Rica and Nicaragua for business and charity purposes. He argues that prosecutors have singled out his client, in part because of his Middle Eastern sounding name, when others at the company were also responsible. "This thing was not set up as a scheme to defraud people," he says. "This is what happens to good people with a good idea and lousy timing who get into trouble." Mr. Hussain's trial is scheduled for April.

Yeap..

Yeap..

For a guy who's on the chit list of over 10 Orange County Sheriffs Deputies...."trouble" might not be the most appropriate word to describe his situation.

.

For a guy who's on the chit list of over 10 Orange County Sheriffs Deputies...."trouble" might not be the most appropriate word to describe his situation.

.

I wonder if the "Man" was trying to flip their deals?

This poster ("PLinney"). I thought that name looked familiar. He is known in Atlanta. Here is his "$13 mil" case- Case:05CV9650 (Open)LINNEY VS ZOHOURI (WS)Filing Date:08/11/2005Type: Superior General CivilJudge:ANNE WORKMANSuperior CourtSecondaryetition For Specific PerformanceTertiary:Related Cases: No Related Cases. Parties function open_page(sprid_id,prty_name) { var disp_page = window.open('/pls/portal30/url/page/ojs_party_address_info?docket.spriden_id='+sprid_id+'&docket.party_name='+escape(prty_name), 'party_window', 'scrollbars,width=650,height=200,left=40,top=40'); if(!disp_page.opener) { disp_page.opener = window;} else { disp_page.focus();}}PartyTypeLINNEY, PAULPlaintiff BARROW III, JESSEAttorneyZOHOURI, FREDDefendant HILL, ROBERT BAttorney

1. this foreclosure is not Aquatera, it is Seagrove

As of Feb 1st 2007 the SoWal project, Aquatera, went into foreclosure.

CIRCUIT COURT, FIRST JUDICIAL CIRCUIT OF THE STATE OF FLORIDA,
IN AND FOR WALTON COUNTY CASE NO: 06-CA000649
VISION BANK, A Florida Banking Corporation, Plaintiff, vs. ZOHOURI SEAGROVE, LP, a Florida Limited Partnership
f/k/a ZOHOURI DEVELOPMENTS SOUTH WALTON, a Florida Limited Liability Company,
FARBOD S. ZOHOURI, a/k/a FRED S. ZOHOURI, individually, CONNELLY & WICKER, INC., and REGIONAL UTILITIES, Defendants.
TO: FARBOD S. ZOHOURI, a/k/a FRED S. ZOHOURI, individually 2467 Verner Road Lawrenceville, Georgia 30245 NOTICE OF ACTION YOU ARE HEREBY NOTIFIED that an action to foreclose ?. See article at: http://www.defuniakherald.com/legal.html




2. With the help of his unethical lawyers he was ahead of the game till now His house of cards is falling down. He could have never have done what he has done with out the help of his crooked unethical lawyers.

Shakespear had it right .... "We need to first kill all the lawyers"

Not really following that line of reasoning. Poster's lawsuit does not appear to include any lawyers as defendants.

If the market had not collapsed they would have been called brilliant. When things go south it is called "Fraud"

so true! I read this thread and could not figure who lost any money on Aquatera- there did not appear to be a "bank" involed. it looks like it never got going because the overall market collapsed
:shock:

I wonder if the "Man" was trying to flip their deals?

During the frenzy just about "everyone" was planning to flip their deals. It was a market driven by investulators selling to each other...until the music stopped. But woe be the developers who've picked the pockets of the lawyers and the cops.


.

Re: trump case - is this the same louis ricci as below?

So, what happened to Louis Ricci??? I know he has been living here for the past few years.......

U.S. Department of Justice
United States Attorney
Western District of Tennessee
800 Federal Office Building
Ph: (901) 544-4231
Memphis, Tennessee 38103
Fax: (901) 544-4230
TTY: (901) 544-3054
PRESS RELEASE
FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION
(November 13, 2001)
CONTACT: Leigh Ann Jordan
(901) 544-4231
FORMER AMERICAN NATIONAL MORTGAGE EMPLOYEE PLEADS GUILTY
Terrell L. Harris, United States Attorney for the Western District of Tennessee,
announced today that Norman Louis Ricci, Jr., entered a guilty plea to a criminal
information filed in United States District Court in Memphis, Tennessee. The one-count
information filed by the United States Attorneys Office charged that beginning on or
about May 10, 1998, and continuing sometime in April 2000, Ricci formerly employed at
American National Mortgage, Inc. (ANM) conspired with others to violate federal mail,
wire and bank fraud statutes. According to the information, Ricci was employed at
ANM from approximately December 1993 until approximately February 2000, and in
early 1999, he became president and part owner of Sugar Beach, LLC. The information
alleges that conspirators sought to enrich themselves and minimize losses to ANM.
According to the information the conspirators accomplished the objects of the
conspiracy by selling mortgage loans to investors knowing that the values of
properties securing the loans were falsely inflated and that the loan files contained
false and fraudulent loan underwriting documents and HUD-1s. In furtherance of the
conspiracy, the information alleges that ?between May 10, 1998, and July 1998, Ricci
discussed with other conspirators the need to sell certain loans funded through ANM?s
warehouse line of credit and the fact that some investors were raising questions about
the validity of appraisals of the properties securing the loans.? The information further
alleges that in ?July 1998, Ricci encouraged another conspirator to engage in property
?flips? for the purpose of creating false comparable sales prices to justify false and
fraudulent appraisals of properties securing the loans ANM needed to sell.? The
information also alleges that in February and March 2000, Ricci and other conspirators
caused the making of mortgage loans to finance the purchase of two properties in
Germantown, Tennessee, knowing that false and fraudulent loan underwriting
documents and HUD-1s were being used in support of the loans.
***MORE***
[FONT=arial,sans-serif]Page 2[/FONT]
Among the obligations imposed upon Ricci under the terms of a written plea
agreement filed by the United States, Ricci will continue to provide ?complete and
truthful information? and ?to testify completely and truthfully? at future
proceedings. If Ricci fulfills all of his obligations under the terms of the
agreement, the United States will recommend a sentence of imprisonment not to
exceed 12 months. The United States also agreed not to bring other charges
against Ricci arising from his participation in the conspiracy described in the
information. The maximum penalty Ricci could face for a violation of the Federal
conspiracy statute (Title 18, United States Code, Section 371) is five years
imprisonment and a $250,000 fine.
The matter is being prosecuted by Assistant U.S. Attorney Carroll Andre? and
William Clabault of the Criminal Division of the United States Department of
Justice. The matter is being investigated by the Memphis Division of the Federal
Bureau of Investigation, the Memphis Field Office of the United States Postal
Inspection Service, and the United States Department of Housing and Urban
Development Office of Inspector General.
# # # #

During the frenzy just about "everyone" was planning to flip their deals. It was a market driven by investulators selling to each other...until the music stopped. But woe be the developers who've picked the pockets of the lawyers and the cops.


.

Another good Shelly post. Here is my thought for the day: "fraud" is tossed around very easily when markets downturn- see the lawsuits by investors against stockbrokers. Fraud requires proving 5 key elements, three of which are you have to have a claimant who 1. "reasonably relied " 2. "on a misrepresentation" 3. "to their detriment". "Bank fraud" requires a "bank" to be the victim. A "bank" is generally an institution whose deposits are insured by the US Government. While "fraud" is a bad bad bad thing, no bank = no bank fraud. I am not defending any developer- but anyone who thinks they are going to be anything other than aggressive and all about the money is naive.

Let's see what we can tell from this thread about Aquatera:

1. no bank involved. Word is that is what stalled the Feds on this deal- no jurisdiction

2. victim? The lender is a well known "hard money lender" who made a high interest rate loan with 12% in up front points ($4 million loan fee). (He makes loans on casinos, the Queen Mary, etc.) Remember when you refinanced your house? Paid a "point" (1% of the loan amount) to buy down the rate? Try paying 12 points to buy down the rate to 12%. That is a really strong deal for the lender.

2. Is there a misrepresentation? The lender got their own appraiser from the best appraiser in Sowal- he said the land was worth $79 million dollars! So the "loan to value" was 50%. Apparently recent appraisals put the value at over $50 mil today- still way in excess of the lender's loan of less than $40 mil. Try buying your house with a 50% loan

This is the key: Any of you- I will finance your property right now, loaning you 50% of the appraised value of your property (I pick my own appraiser, and you pay his fee), I will charging you 12% loan fee up front (that is 12% of the loan amount), then 12% interest per annum, and you pay all the closing costs and my attorney's fees. I don't really care what you paid for it. Close in 7 days.

3. flip? looks like that is pretty apparent from the deed records, secretary of state records, title insurance, etc. there was a same day purchase and resale with related parties. If it was "mispreresented" it would have been hidden, and they would not have wanted to pay that ridiculously high deed stamps and fees and title premiums on the deal. They probably paid $200,000 extra to buy and resell it. You can't "reasonably rely" by doing the three monkeys act and not look at or read anything. On a land loan all the lender can loan on is the appraisal- the property has no operating income, no pro formas for cash flow, no NOI. So the appraisal is everything. Does it matter what the borrower paid for the land? The lender's deal is the same even if someone gifted the borrower the land- the lender just wants the points and the collateral

4. Detriment? looks like the property has a bunch of equity and the lender has no loss.

I read linney's lawsuit in Atlanta, the $13 mil case". Looks like a classic nuisance action. Simple summary seems to be: Linney and some other dude bought a property from Zohouri to redevelop. Linney defaults a third party loan, Zohouri buys loan and forecloses him out. Zohouri gets development loan. Linney's partner in deal dies. Linney sues Zohouri claiming if property is redeveloped (it is not), Linney should get half of equity plus punitives for "fraud". Just goes to show "anybody can sue anybody"

Would love to hear your thoughts on this if I am missing something