Defendants gain small victory in federal racketeering case

By Karen Kidd | Jun 29, 2018

FORT MYERS (Florida Record) — The long list of defendants in a multimillion dollar racketeering case involving apartment projects in multiple states scored a small victory earlier this month when a federal judge in Fort Myers dismissed a portion of one count against them.

FORT MYERS (Florida Record) — The long list of defendants in a multimillion dollar racketeering case involving apartment projects in multiple states scored a small victory earlier this month when a federal judge in Fort Myers dismissed a portion of one count against them.

U.S. District Court Judge Sheri Polster Chappell, on the bench in Florida's Middle District Fort Myers Division, dismissed without prejudice a portion of one racketeering count only for far as it alleges to violate federal statute, specifically 18 U.S.C. § 1962(b). Defendants in the case had asked for the entire count to be dismissed "as a shotgun pleading" because it was pleaded in multiple claims, combined the claims of eight separate plaintiffs and joined defendants into one.

Chappell disagreed, saying the defense had made its case only in reference to the federal statute as applied to one count alleged by plaintiffs in the case. "[The] plaintiffs have not plausibly alleged a violation of § 1962(b)," Chappell wrote in her 34-page opinion and order issued June 11.

"While the [plaintiffs'] third amended complaint is rife with predicate acts that allowed defendants to establish and fund enterprises, it is devoid of any allegation those enterprises were directly acquired or maintained through racketeering activity."


The defense, otherwise, did not get anything it asked for in the case as Chappell denied motions to dismiss and a motion for joinder that had been filed by David Albertelli and Albertelli Construction, George Albertelli, Amy Butler, Kevin Burke, Foundation Management, Kerry Heltzel, KMM Construction, Brook Kozlowski, National Framing, John Salat, Team CCR, US Construction Trust and Westcore Construction.

The defendants are referred to in the opinion and order as "a group of interrelated individuals and corporations" alleged in a "pattern of fraud committed on apartment construction projects around the country," according to the background portion of the opinion and order.

The plaintiffs in the case are eight "Continental" funds that were created "to bankroll the apartment construction projects," the opinion and order said. No individuals are listed among plaintiffs in the case.

Between 2011 and 2017, "Albertelli-affiliated companies" were awarded more than $200 million in eight apartment construction projects in five states, including a project in Fort Myers contracted in February 2015, according to the background portion of the opinion and order. Other states where the apartment construction project contracts were awarded are Kentucky, Minnesota, Texas and Colorado. "Each project was allegedly completed defectively," the opinion and order said.

"While securing and undertaking the projects, defendants allegedly engaged in a wide swath of intentionally fraudulent activity [the 'scheme'] 'designed to extract as much money as [they] could, as quickly as [they] could, without regard to contractual performance or any lawful right to payment.''' the opinion said. "Because it is alleged the scheme was carried out by a bevy of defendants, on eight projects, and over the course of six years, the court summarizes the facts according to the type of actions alleged."

Allegations against the defendants include bribes paid to Angelo Eguizabal, former Continental vice president of construction, who is not listed as a defendant in the case. Bribes to Eguizabal were "so commonplace" that a line item was included for such payments on three of the apartment projects. "In total, over $1,464,735 was funneled to Eguizabal from 2011 to 2017, which was financed through misrepresentation of costs on the projects, including amounts due to subcontractors," the opinion and order said.

The 21 counts of allegations against defendants in the case include violations of the Federal Racketeering Influenced and Corrupt Practices (RICO) Act, Florida's civil and criminal RICO Act and the state's Prompt Payment Act, civil theft, common law fraud and conspiracy to commit fraud, conversion and breach of contracts and subcontracts.

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