Tax office fraud case grows to $2.4M
Forged documents allegedly used with employee’s help
A scheme run out of Broward County’s tax office defrauded property owners of millions of dollars — a much larger amount than first uncovered, authorities say.
The crimes involved forged documents, including some supposedly signed by people who were dead, Broward sheriff’s detectives said.
After deputies uncovered a scam that led to five arrests in July, county auditors took a closer look at the tax office books and found an additional $800,000 in questionable payments. That raised the fraud case of stolen funds to $2.4 million, officials said.
That led to Thursday’s arrest of Arthur V. Holmes, 38, of Pompano Beach, on 39 counts related to the alleged scheme, and an arrest report indicates two more people are being sought.
Roberto Martinez, 46, a tax office employee who oversaw the distribution of the proceeds from the taxdeed sales, was arrested in July along with four other people. Authorities say he worked in concert with the others, who provided forged documents and then received and spent the illgotten money through companies they had created.
Detectives investigating the case said some of the former property owners could not have signed the documents when they were dated — five were dead and another was in federal prison.
Here’s how authorities say the scheme worked:
When property owners don’t pay their taxes, the county can put their homes up for auction to pay off the debt. Auction proceeds from these tax-deed sales cover the unpaid taxes and accrued interest, then can be used to pay off governmental liens, mortgages or other debts.
If there’s any money left over, it’s supposed to go to the person who lost the property.
But sometimes, a former owner will sign an agreement with a company or person to act on their behalf to get the money. The power-of-attorney document gives the company the right to file for and collect the remaining funds.
Forged power-of-attorney documents were used in these cases — with help from inside the tax office, detectives said.
Martinez, who was a county employee since 2006, handled surplus taxdeed distributions for the county’s tax-handling Records, Taxes and Treasury Division. He was fired after his arrest.
The initial arrests involved 28 property sales. The county auditor found problems with 22 additional sales. All were made between 2014 and 2016, and Martinez was in charge of authorizing all payments, officials said.
He is being held in Broward County jail along with alleged co-conspirators Marc Eugene, Denis Eugene and Dim Villarson.
Patricia Eugene has been released on bond.
An arrest warrant also was issued for another person, Gawens St. Victor, who is at large.
The 39-count warrant on Holmes included organized scheme to defraud, money laundering, official misconduct, 13 counts each of grand theft and uttering a forged instrument, and 10 counts of fraudulent use of personal identification information. He is being held in Palm Beach County jail on $212,500 bond.
Holmes was listed as president and registered agent for IV Funding Inc., a company that received almost $368,000 in payments from 13 of the 22 new taxdeed surplus distributions reported, according to arrest reports.
A number of the other additional tax-deed surplus distributions were to companies with connections to St. Victor, Villarson and Denis Eugene, according to the arrest affidavit.
County Auditor Robert Melton expects the findings of his audit to be released in January and said he could not comment until then.
The audit information was solid enough that the county’s risk insurance carrier, Fidelity and Deposit Company of Maryland, has agreed to reimburse the county for the payments identified by the Sheriff’s Office in July and the new ones uncovered by the audit.
“There was enough [support] that the insurance company felt willing to pay on,” said Robert Kelleher, Broward’s deputy chief financial officer. The county is only required to pay a single $10,000 deductible, officials said.Although the county is signing a reimbursement agreement with Fidelity, it has held open the option of filing additional claims if other questionable payments are discovered.