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Property deals scrutinized

A detention officer's association with three men under investigation for fraud raises questions.

By JEFF TESTERMAN
Published February 23, 2004

TAMPA - Steven K. Sutton, a $35,568-a-year detention officer for the Hillsborough County Sheriff's Office, has built an impressive real estate portfolio in the past two years, acquiring 14 properties at a cost of almost $600,000.

Sutton made the acquisitions, however, with the assistance of Matthew Cox, David Walker and Rudy Arnauts, three businessmen at the center of federal, state and local investigations into questionable real estate dealings in Tampa Heights and Ybor City.

Despite a Sheriff's Office policy that prohibits officers from entering into business relationships with people with criminal backgrounds, Sutton had business dealings with Cox, a mortgage broker stripped of his license after being placed on probation for grand theft and fraud charges.

And a review of Sutton's real estate transactions by the Times raises questions about the legitimacy of several purchases:

In one case, money from one of Sutton's bank accounts was used to create a false $552,000 purchase price on the sale of an aging boarding house to a nonexistent buyer.

In another, a phony notary was used on deeds in a series of transactions: transferring a home from Arnauts to Sutton, back to Arnauts, then to a fictional buyer named James Redd.

In a third, a false purchase price was placed on a deed and a $52,900 disbursement made to a construction company that has no listing in corporate records and that never obtained any permits for renovation work on a property purchased by Sutton.

Sutton declined several requests to discuss his real estate dealings with a Times reporter. He also declined to accept written questions regarding his property holdings.

"He does not want to answer any questions right now," said Lt. Rod Reder, a sheriff's spokesman who relayed a request for an interview to Sutton.

Sutton, 39, was employed as a dancer/owner at the Exotic Fantasies club in Sunnyvale, Calif., and as a worker at a local warehouse before joining the Sheriff's Office full time in 1995, according to his personnel file. He was terminated when he failed a sheriff's employment exam but was rehired the same year after passing it. His evaluations have been consistently satisfactory. Personnel records show he was suspended for one day in 2001 for using "tobacco products" while on duty at the county jail.

Although Sutton helped manage several rental properties for his wife, Valerie Lynn, before the couple's divorce in 2000, it's not clear how he was introduced to Cox, Walker and Arnauts.

In 2002, Sutton began buying units at the University Oakwood Condominiums in northern Hillsborough for about $26,000 apiece. He bought eight from Walker, owner of the United Capital Trust mortgage brokerage firm in Tampa, and three more from Keyla Burgos, Cox's ex-wife.

Walker purchased the brokerage company from Cox, who still worked there after pleading guilty to mortgage-related fraud charges in 2002.

A year later, records show, Sutton and Cox co-owned an account at a Carrollwood bank. A $3,864 check was drawn on the joint account in September and used to buy documentary stamps to affix to a deed used to transfer a two-story boarding house at 105 W Amelia Ave. from Walker to Alex Antioch for $552,000.

Antioch is an invented name placed on the deed by Cox, Walker said. The price also is apparently phony and likely was used to artificially drive up the value of real estate holdings in Tampa Heights.

Walker said he signed a blank deed and gave it to Cox to end his ownership of the boarding house in a final act of separation from the company. He said he did not know who Cox sold the property to or for how much. He was disposing of the boarding house as part of an effort to disassociate himself from Cox, he said, after Cox disclosed that he had concocted a series of false identities to put on phony deeds, fraudulent mortgages and fake mortgage payoff documents.

Cox dropped out of sight in early December, as the Times was preparing to publish a story about the FBI and Tampa police investigating Urban Equity Inc., a company formed in 2002 by Cox, Walker and Arnauts.

The Times later published reports showing four fake identities that Walker said were dreamed up by Cox and had been used to buy 21 properties and obtain $2.7-million in mortgage loans in Tampa. Cox is now a fugitive sought for violation of probation. Walker has offered his assistance to investigators and is maintaining his innocence. Arnauts is declining to comment, his attorney said.

One of the phony identities figures into the history of a property at 1013 E Columbus Drive owned briefly by Sutton.

The 1,105-square-foot home with a rusting tin roof was sold from Arnauts to Sutton for $30,000 in March. A phony seal was used to notarize the deed. Less than a month later, Sutton gave the property back to Arnauts in a transaction that involved no exchange of money, according to the deed.

Two months later, in June, records show that Arnauts sold the property for $145,000 to James Redd, one of the phony identities Walker said Cox invented. Redd's name was affixed by someone on a mortgage for $130,500.

United Capital Trust collected a brokerage fee of $9,300, settlement records show, and Arnauts got a check at closing for $112,000. The same fake notary seal placed on Sutton's deed was placed on the deed to Redd.

Several weeks later, in July, Sutton was the purchaser of another property whose records bear false information, this one the deed for a 1,213-square-foot home at 1809 E Columbus Drive.

The documentary stamps on the deed indicate Sutton paid $225,000 for the 45-year-old home set off the ground on brick pilings. But settlement records show the real price was $143,500, with Sutton getting a mortgage of $136,325.

"They had to do something with the doc stamps" to create the false price, said Edward J. Serralles, whose company represented the seller in the transaction and whose records confirmed the lower purchase price. Serralles said he knew nothing about how the discrepancy came to be in the records.

At closing, another check for $52,976 was disbursed and paid to Alison Arnold for renovations on Sutton's new property by a company called AA Construction.

There is no record of any AA Construction in Tampa. No city permits were ever issued for work on the home at 1809 E Columbus Drive. The address on the renovation contract for AA, 409 E Amelia Ave., is actually a Tampa Heights home owned by Cox.

Arnold, who cashed the construction check four days after the Sutton closing, worked for United Capital Trust. She later worked for a company that shared office space with Urban Equity, the company at the center of the local, state and federal investigations.

Arnold has been identified by Pinellas County residents as the woman who masqueraded as "Rosita Perez" to collect a $117,000 mortgage loan on a Palm Harbor home coveyed to Perez with a forged deed last year.

Arnold declined to say whether she was the woman who played Perez. She said she had been in contact with the FBI and was seeking immunity on unspecified charges. She refered other questions to her attorneys.

Asked about the check Arnold received for AA Construction at the Sutton closing, attorney Wade M. Whidden declined to comment, citing the ongoing FBI investigation.

- Times researcher Cathy Wos contributed to this report. Jeff Testerman can be reached at 813 226-3422 or testerman@sptimes.com

[Last modified February 23, 2004, 01:00:06]


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