Miami businessman guilty in Royal Palm Beach condominium fraud

Article Courtesy of The Palm Beach Post

By Kimberly Miller    

Published April 20, 2015

 

A Miami businessman was found guilty Thursday of one count of conspiracy in connection to a housing scheme that left a Royal Palm Beach condominium mired in foreclosures.

 

Eli Riesel, who was a managing member in a company that bought about 100 units at the Kensington of Royal Palm Beach in 2007, is one of six people charged following what federal investigators described as a $25 million mortgage scam.

Riesel is the only one to face a jury trial. The other defendants pleaded guilty to various charges last year.

Prosecutors say Riesel conspired to provide prospective buyers with incentives to purchase condominium units at Kensington but concealed those incentives from financial institutions and other lenders who financed the transactions.

The Kensington of Royal Palm Beach Condominium entrance.


According to an April 2014 indictment, Kensington buyers were offered seller-paid closing costs and down payments, guaranteed rent, cash rebates and free condo dues for a specified period of time — none of which was disclosed to the lender.

The lenders funded the loans based on false and “fraudulent pretenses, representations, promises and material omissions.”

The Palm Beach Post published a series of stories about the Kensington in 2010 and 2011, investigating the bulk buy of 100 units by Miami-based Kensington Trust and its dubious high-priced flips.

A Post analysis of bankruptcy records and public documents found Kensington purchases made in 2008 and 2009 by a 34-year-old Costco optician from San Diego who paid $913,000 for three units, an Oregon paper mill repairman who bought four units for $1.2 million, and a 38-year-old convicted drug trafficker who purchased five units for $1.68 million.

Riesel’s attorney, Ben Kuehne, issued a statement in August that said Riesel believed “his efforts were always consistent with the law and allowable business practices.”

“Mr Riesel worked hard to provide a good condominium for sale to appreciative buyers for a fair price,” the statement said. “The experts and professionals with whom he associated approved every aspect of the apartment sales.”

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