Article Courtesy of The Miami Sun Post

By Ben Torter

Published March 6, 2007 

Colin Hendrick knew the Carlisle on the Ocean had problems, but he never imagined the tangled web of corruption and financial debauchery he’d uncover there.

The Carlisle, built in 1965 at 9195 Collins Ave. in the village of Surfside, was converted to condominiums in 2004 — a period when bartenders traded in martini shakers for real estate licenses, flippers made fortunes overnight and anyone with the ability to sign on the dotted line was given exotic mortgages without even a down payment.

They aren’t small fly-by-night banks either, but huge corporate entities such as HSBC Bank USA, Countrywide Home Loans, Citibank, Deutsche Bank National Trust Company, Bank of New York, Reo Properties Corp., U.S. Bank National and EMC Mortgage Corp.

“We think it’s scandalous that banks aren’t paying the condo fees,” said Hendrick, president of the Carlisle on the Ocean Condominium Association. “It’s causing horrendous economic hardship.… It’s an absolute economic disaster for our building, and it’s replicated up and down the coast.”

The situation likely will get worse. In all, about 30 units in the building are in the foreclosure process. Under state law, banks are required to pay maintenance fees from the time they take back title and up to six months in back fees.

“Just between the banks, there’s probably $50,000 owed to the association,” said the association’s attorney, Ralph Ruocco of Glazer and Associates, P.A. That figure is growing daily.

The association will meet soon to discuss raising maintenance fees, which Hendrick said average $450 per month. Condo owners likely will have to pay a special assessment to come up with the $300,000 needed to fix the 43-year-old elevators, which are broken as often as they work. These owners have already been hit with multiple assessments, such as one last year for $1,500 that many didn’t pay.

None of the banks that own the nine aforementioned units returned calls for comment.

“It’s become a vicious cycle,” Ruocco said.

He pointed out that even if the Carlisle’s daily operating costs stay the same, some condo owners can’t afford to cover the costs that others aren’t paying.

“It’s disheartening,” Ruocco said. “I live in South Florida, and I’m watching it deteriorate by the day. The banks are starting to flag certain properties that they won’t lend on. One of our clients has 160 unsold units and the bank won’t lend on them. So how do they sell the units?”

In 2007, 10,209 Miami-Dade County homes made it to the foreclosure auction block — three times the number of homes auctioned the previous year. There were 8,829 foreclosure cases in the fourth quarter of 2007 alone.

That’s partly because banks handed out mortgages to almost anyone who applied — until the real estate market collapsed. Home prices nationwide fell an average of nearly 9 percent in the last quarter of 2007. By some estimates, as many as 15 million homeowners now owe more than their homes are actually worth.

The local court system is so backed up with foreclosures that the process, which used to take a few months, now takes up to 18 months, Ruocco said.

Still, the plot leading up to the situation in which the Carlisle now finds itself is zanier than most, with enough twists and turns and subplots to write a fictional caper.

Hendrick, the CEO of SmartMetric biometric access cards, purchased two condos in the Carlisle. He bought one in July 2004 for $437,000. Then he bought the abutting unit in February 2006 for $340,000 and combined the apartments into one third-floor unit overlooking the ocean.

Sitting in his living room feels as if you’re actually at the beach, but it’s far from paradise.

Soon after he moved in, he detected signs suggesting that his purchase wasn’t the Shangri-la it appeared at first glance. New windows installed during the 2004 condo-conversion leaked water, which began to stain and rot the plaster walls. Moisture also began to form along the air-conditioning vents in the ceiling and interior walls.

The original condo association levied special assessments to fix the problems, but never followed through, according to Hendrick. The walls in his condo are still moist and rotting.

When Hendrick took over the association in April 2007, he began uncovering layers of deceit on the part of the original board.

“The day I was appointed to the board, the property manager [Steve Orozco] resigned,” Hendrick said. “[Orozco] and his assistant left and took all the documents, like payroll, etc. Later, we discovered this was done to cover financial misconduct.”

The association’s books hadn’t been audited, as required by law, for three years, so the association hired a forensic accountant to rebuild the financial records of the building for that time period. She recently finished the first year.

Hendrick also discovered that former association president Jonathan Glynn, whose primary residence is in Manhattan, allowed Orozco to use a rubber signature stamp on association checks and didn’t bother to verify where the money was going.

“The manager had free reign to do what he wanted without checks and balances,” Hendrick said.

In fact, he believes that Orozco was in cahoots with former board member Ihosvany Coca to defraud the building of money intended for repairs. Although Coca’s now-defunct company, 10-4 Electrical Contractors, Inc., reported its address to the state division of corporations as Carlisle apartment 712, Coca didn’t own that unit or any other unit there.

“We discovered Mr. Coca wasn’t an owner and that large amounts of money had been given to him,” Hendrick said. “So I demanded he resign. A week later, two other board members [Glynn and former treasurer Carl Boonstra] resigned after I discovered financial records had been taken and there were a lot of over-expenses.”

For example, according to 10-4 Electrical’s January 2006 invoice, Orozco gave Coca a $13,925 contract to, among other things, install a new booster water pump. When the pump broke six months later, the association discovered that it wasn’t new, but 30 years old and refurbished. However, to prove a case fraud, Surfside Police told them they needed to show intent.

The association has filed suit against Orozco and Coca.

“I’m afraid I can’t talk to you about that,” Orozco said. Coca couldn’t be reached for comment.

As if that weren’t enough, the association is dealing with a host of other problems involving Alexei Voychinsky, a mysterious Russian man whose wife’s company, Russian Contour, Inc., has the same Coral Springs P.O. box as the local free biweekly Russian newspaper Reklama Miami.

Voychinsky frequented the building to collect rents from a couple of apartments owned by another Russian named Ruslan Vazetdinov. Then, in August, the association banned Voychinsky from the building because his name wasn’t on any unit’s title.

About a week later, Voychinsky’s attorney, Scott Bender, sent Hendrick a letter advising him that Voychinsky held a power of attorney for Vazetdinov and therefore was entitled to enter the building.

However, Maria T. Hernandez, the notary whose name and signature were stamped on the Feb. 8, 2006 document, claims she never notarized it and the stamp is fraudulent.

“On that date, I did not notarize this said document,” Hernandez wrote in a notarized letter. “My seal was renewed on 8/31/2006 with my new name. On 2/08/2006 my seal and signature were under my former name: Maria T. Martinez.”

Hendrick brought that information to the Surfside Police, but “it was forwarded to where it occurred, which was in Aventura,” police Sgt. Loxley Arch said.

Aventura Police could not verify whether they had received information about the case, and the department has not contacted the association.

Neither Voychinsky nor his wife could be reached for comment.

Ed Griffith, spokesman for the State Attorney’s Office, said he couldn’t confirm whether they were investigating the case or anything else related to the Carlisle on the Ocean. He did, however, confirm that it’s not standard practice for the state attorney to go after mortgage fraud unless extremely detailed proof is supplied by the accuser.

Hendrick believes the authorities haven’t pursued the case because they are overwhelmed and don’t want to admit how corrupt things got during the real estate boom. Somehow, though, he has kept a positive attitude.

“We’ll survive as a building,” Hendrick said, “but in the meantime, it’s placed a tremendous financial burden on the owners.”