Dive Brief:
- Four Miami developers and a major Fort Lauderdale contractor pled guilty Monday to theft of government funds in an affordable housing scam that cost taxpayers $36 million.
- In Miami federal court, the developers took a plea deal after being convicted of conspiring with two top officials at Carlisle Development Group. The two Carlisle executives — who were accused of taking more than $26 million in unlawful funds from the president of BJ&K Construction Services in his role in the scam — are expected to plead guilty Friday.
- A federal attorney said that about $11 million swiped by the Carlisle principals had been recovered.
Dive Insight:
The scheme involved several developers and contractors who allegedly used shell companies, kickbacks and tax credits for personal gain. Charges were filed in both July and August, and the four plea deals were finalized Monday.
The investigation was helped along when conspirators agreed to work authorities. Some of the convicted will face jail and must pay back the money. The case coincides with recent heightened scrutiny of illegal activity in the construction industry, with authorities increasingly cracking down on corruption.
Regulators and prosecutors are sending a message that laws will be enforced and criminals and organizations will be held accountable. As a result of the actions of high ranking executives, Carlisle, which had been among the country's largest affordable housing developers, was ordered to sell the remaining projects it held in the Miami area.
