Developer sentenced for lying to save Vero project
A 75-year-old developer with offices in Palm Beach on Tuesday was sentenced to six months in prison after admitting he lied to banks to keep money flowing so he wasn’t forced to scuttle an oceanfront hotel and condominium in Vero Beach.
While George Heaton received over 60 letters of support and his attorneys voiced concern about his health, U.S. District Judge Robin Rosenberg said the founder of Heaton Companies couldn’t escape a prison sentence.
Still, the sentence was far less that the roughly 3½ years recommended under federal sentencing guidelines.
Rosenberg also ordered Heaton to pay $263,000 in restitution — an amount his attorneys said he had already paid in an effort to underscore his remorse.
His attorneys, Bruce Zimet and David Markus, urged Rosenberg to put Heaton on probation. Having pleaded guilty in January to conspiring to make false statements to a financial institution, the West Palm Beach resident acknowledged what he did was wrong, they wrote in court papers.
Instead of focusing on his lapse of judgment more than 10 years ago when his company was building the Vero
Beach Hotel &
Club, they asked Rosenberg to focus on Heaton’s “exemplary personal history and characteristics, which included, decades of serving his community and employing hundreds of people.” During the fallout from the housing crisis, Heaton was desperate to keep the hotel project afloat, his attorneys said, so he engaged in a complex scheme to convince bankers that it was financially solid. He secretly paid down payments and offered cash rebates and other incentives to buyers of condominium units in the popular development where units sold for as much as $1 million, federal prosecutors said. His undisclosed actions made it difficult for lenders to judge the financial ability of buyers to repay their mortgages. Some of the units ultimately went into foreclosure.
Heaton’s duplicity worked. Orion Bank, now Iberia Bank, released a $23 million construction loan after Heaton falsely assured them that the purchase contracts were “bona fide third-party transactions.”
Still, his attorneys said, the project was a success. It is a four-star hotel and employs hundreds, they said.
Heaton didn’t act alone, prosecutors said. His accountant, Deborah Baggett, pleaded guilty to the same conspiracy charge. Vero Beach attorney Eric Granitur, 60, was in June convicted by a jury of the conspiracy charge and two counts of making a false statement to a financial institution.