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2nd Guilty Plea in Housing Scam

Tuesday, August 25, 2015

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A Florida contractor has pleaded guilty to his role in a $36 million low-income housing scheme.

Rene Sierra, 57, founder of Plantation-based Siltek Affordable Housing LLC, was charged with paying about $6.2 million in kickbacks to four Miami-based developers, according to authorities.

Sierra pleaded guilty Aug. 6 and faces between two and three years in prison for theft conspiracy, the Miami Herald reported.

contractor bid
©iStock.com / Schnoodle

The contractor (not shown) allegedly submitted inflated construction contracts to the Florida Housing Finance Corp., the body tasked with issuing the credits and grant monies.

He is the second builder to plead guilty in the alleged conspiracy.

The Players

Arturo Hevia, 63, founder of Doral-based Design Management and Builders Corp., also pleaded guilty to the same theft conspiracy charge, the newspaper said. Hevia had been accused of paying more than $1 million in kickbacks to developers, according to case details.

Prosecutors say Sierra allegedly paid kickbacks to the founders of Biscayne Housing Group, Michael Cox, 47, and Gonzalo DeRamon, 51; and Carlisle Development Group’s CEO, Matthew Greer, 37, and the company’s co-founder Llyod Boggio, 69.

Those individuals also face charges in the scheme, in addition to Michael Runyan, 66, the CEO of Fort Lauderdale-based BJ&K Construction Inc. Runyan has been cooperating with authorities, reports relate.

The Scheme

The U.S. Attorney for the Southern District of Florida described the scheme in this way.

Sierra and the other builders allegedly conspired with the developers to steal federal tax credits and grants set aside for construction of low-income housing projects for the poor, elderly and homeless throughout Miami-Dade County.

The contractors submitted inflated construction contracts to the Florida Housing Finance Corp., the body tasked with issuing the credits and grant monies.

When the subsidies were received, the excess was pocketed, the U.S. Attorney’s office said.

$36M, 14 Projects

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 14 low-income developments developed by CDG and BHG. 

Miami, FL
©iStock.com / Sean Pavone

The scam involved 14 low-income housing projects throughout Miami-Dade County, authorities allege.

Both during and after construction of the developments, the contractors allegedly made periodic kickback payments of the inflation monies to the developers’ 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 Hevia for the benefit of DeRamon and Cox, according to the U.S. Attorney’s office.

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. 

‘Vigorous’ Pursuit

In a statement, U.S. Attorney Wifredo A. Ferrer said, “[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.”

   

Tagged categories: Construction; Fraud; Good Technical Practice; Government contracts; Housing; HUD; Laws and litigation; North America

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