LIHTC Developer Pleads Guilty in $30M Fraud Scheme
The former Miami-based Carlisle chief executive officer recently admitted to participating in a $30 million fraud scheme involving 10 low-income housing sites. Specifically, he pled guilty to two counts of conspiracy to commit theft of government money, in connection with a scheme to steal government funds intended for the construction of low-income housing.
According to court documents, as CEO of Carlisle Development Group (CDG), a low-income housing developer in Miami, Fla., he applied for federal tax credits and federal grant monies to build low-income sites through a program administered by the Florida Housing Finance Corporation (FHFC). To obtain these federal funds, FHFC required developers to submit proposed development costs, including a construction contract signed by the developer and contractor.
The court records further indicate that the CEO and others through CDG, conspired to unjustly enrich themselves by submitting fraudulently inflated low-income housing construction contracts to FHFC’s representatives to obtain excess federal tax credits and grant monies to which they were not entitled, and then to use the proceeds for their personal use and benefit. From 2006 to 2012, the CEO and other conspirators caused the submission of fraudulently inflated construction contracts on at least eight different low-income housing developments, which resulted in the allocation of at least $26 million in excess federal tax credits and grant monies. Similarly, during the course of the scheme, the conspirators made kickback payments for the benefit of the CEO and others totaling at least $26 million.
The CEO conspired with representatives of Biscayne Housing Group (BHG) to commit theft of government money and property. BHG employed the same contract inflation scheme of submitting fraudulently inflated contracts to FHFC for the receipt of excess federal tax credits and grant monies. CDG and BHG had a joint venture for two developments. In or around May 2010, the CEO and his conspirators agreed to share approximately $3.7 million in excess government funds for these two joint venture developments.
The CEO is scheduled to be sentenced on Nov. 13, 2015. The United States has seized $9.3 million from him and he has agreed to entry of a forfeiture money judgment in the amount of $16,004,137, the balance of which he is expected to pay prior to sentencing. He faces a maximum possible sentence of 10 years in prison.