De­vel­oper sen­tenced for ly­ing to save Vero project

Palm Beach Daily News - - TODAY - By JANE MUSGRAVE

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.


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