The last of seven defendants pled guilty today to participating in a scheme to defraud the United States government of $36 million in funding 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, Federal Bureau of Investigation (FBI), Miami Field Office, Nadine Gurley, Special Agent in Charge, U.S. 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.
Lloyd Boggio, 70, of Coconut Grove, pled guilty before U.S. District Judge Ursula Ungaro to one count of money laundering, in violation of Title 18, United States Code, Section 1957. Boggio is scheduled to be sentenced on December 9, 2016 at 1:30 p.m. before United States Ursula Ungaro. As part of the plea agreement, Boggio agreed to forfeit to the United States approximately $2 million in seven frozen bank accounts. In addition, Boggio agreed to forfeit a multi-million dollar luxury home in Coconut Grove and to the entry of a forfeiture money judgment of $7,174,357. The defendant faces a maximum statutory sentence of 10 years' imprisonment.
Arturo Hevia, 64 of Miramar, a founder of Design Management and Builders Construction, a general contractor in Doral.
According to court records, including the agreed upon factual proffers in support of the defendants' pleas, from 2006 to 2012, Boggio and Greer served, at alternating times, as the Chief Executive Officer of CDG. During this period, CDG applied for federal tax credits and federal grant monies to build low-income housing developments 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 record, including the defendants' factual proffers, indicates that Boggio and Greer, of CDG, conspired with Runyan of BJ&K Construction to unjustly enrich themselves by submitting fraudulently inflated low-income housing construction contracts to FHFC's representatives in order 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. Boggio, Greer, and Runyan 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. With these excess federal funds, Runyan made kickback payments for the benefit of Boggio and Greer, including an $8.7 million wire transfer to Boggio's bank account in the name of Caesar and Cleopatra on March 23, 2011.
According to the factual proffers, Boggio and Greer also conspired with Cox and DeRamon of BHG to steal government money intended to build low-income housing developments. 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 on two low-income housing developments jointly developed by CDG and BHG. In or around May 2010, Boggio and Greer agreed with Cox and DeRamon to share approximately $3.7 million in excess government funds for these two joint venture developments.
Court documents further indicate that as a result of the defendants' fraudulent schemes to inflate low-income housing construction contracts, FHFC allocated more than $36 million in excess tax credits and grant monies for fourteen low-income housing developments. Both during and after construction of the developments, the contractors made periodic kickback payments of the fraudulent contract 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 Hevia for the benefit of DeRamon and Cox.
During the course of this investigation, through seizure warrants and voluntary payments by the defendants, the United States has collected over $20 million in proceeds connected to the thefts of government funds.
Mr. Ferrer thanked the FBI, HUD-OIG, and IRS-CI for their work on this case. This and all related cases are being prosecuted by Assistant U.S. Attorneys Michael R. Sherwin, Michael N. Berger, Karen Rochlin, Evelyn Sheehan, and Eloisa Fernandez.