Fence guy's deal gets FDLE look
By JEFF TESTERMAN, Times Staff Writer
State and county investigators are looking into a Manatee County land transfer involving Don Connolly, the businessman who has bought properties at delinquent tax auctions in hopes of selling them to adjoining homeowners for big profits.
The criminal investigation stems from Connolly's acquisition last year of a small lot on the Manatee River from a company that went out of business 14 years ago.
Among other concerns, investigators say they can find no record of the individual whose signature is on the deed that transferred the lot to Connolly.
After taking title to the lot, Connolly warned a couple on an adjoining property that he "would store junk cars there if they didn't pay him $20,000," said Ray Williams, director of delinquent collections for the Manatee County tax collector.
The couple, Mr. and Mrs. Irwin Benzing, refused, and the Tax Collector's Office later referred the matter to the Manatee sheriff.
Sheriff's Col. Ken Pearson said Thursday that his office is investigating. He said he also has asked the Florida Department of Law Enforcement to look into Connolly's business practices.
"In light of what we're reading in the papers and seeing on TV about Mr. Connolly in Pinellas, Hillsborough and other counties, I wanted to have someone look at this from a broader context, to see if there is some possibility of racketeering," Pearson said.
Ed DeVelasco, FDLE special agent in charge of Manatee and Sarasota counties, said he assigned an agent to the case Wednesday "to see if it meets our investigative threshold."
Connolly, a Valrico man who declared bankruptcy three times after owning a construction firm and a used car company, is trying to parlay careful research and cheap tax deed purchases into big profits.
In the Tarpon Woods development in northern Pinellas, he wrote a check for the unpaid taxes on a lake and its shoreline. He then erected a fence between the water and the pricey homes around it and told homeowners they would have to pay $30,000 each to get back their views.
In South Pasadena, Connolly bought a tax deed for the submerged lands under Boca Ciega Bay and told homeowners they would have to pay to keep their docks from being fenced off.
In Manatee, Connolly got into a pitched battle with the Benzings, a couple who left Florida recently to visit a new grandchild out of state.
A year ago, the Benzings decided to try to preserve their waterfront view by bidding in a tax deed sale for an adjacent finger of land owned for years by NA Development. Connolly showed up and engaged the couple in a bidding war.
Connolly won the right to the lot, assessed at $1,040, with a bid of $18,000. But instead of paying the bid, Connolly went to a tax collector's branch office the next day and paid the unpaid taxes and costs, which totaled $442.18.
"That freed him of paying his huge bid," said Williams of the Manatee County tax office. "Then a few days later, he comes up with a quit-claim deed to him from NA Development. Then he basically tried to strong-arm the couple on the adjoining property."
The tax collector began checking around and discovered that some of the principals of NA Development, dissolved in 1988, were dead.
They could find no record for Dunston D. Hughes, the man who signed the deed over to Connolly's Alaskan Ventures holding company: no active driver's license, no property records, no reference that Hughes had been associated with NA Development.
"It's funny after all that bidding, he could suddenly find the sole surviving member of a defunct corporation," said Pearson of the Sheriff's Office. "We have not been able to locate Dunston Hughes, and our detective asked Connolly to produce him and he did not."
Pearson said the notary who witnessed the deed transfer is a man who works for Connolly.
"We asked him about this and we weren't terribly satisfied with his answers," Pearson said.
On Wednesday, Connolly averted further legal problems stemming from a Hillsborough County arrest when he paid $4,500 to meet overdue restitution payments to the state.
Connolly was charged in 1997 with failing to turn over to the Florida Department of Revenue the sales tax he collected at Kinjite Motors, his Hillsborough used car dealership. State investigators said Connolly collected $634,477 in sales taxes but remitted $121,763 to the state.
In a negotiated plea in May 1997, Connolly pleaded no contest to one count of first-degree grand theft. A judge withheld adjudication, placed Connolly on 15 years' probation and ordered him to make $124,378 in restitution to the state, with payments set at $750 per month.
Joseph Papy, regional director for the Florida Department of Corrections, said Thursday that Connolly had fallen behind in his payments. His probation officer filed a violation report that could have resulted in arrest, but Connolly brought the account current before that report was sent to the court, Papy said.
Connolly has paid $20,851 toward his restitution.
-- Times staff writer Rob Farley and researchers John Martin and Kitty Bennett contributed to this report.
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