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By JEFF TESTERMAN, Times Staff WriterIf houses could talk, Hillsborough's biggest would tell a story of FBI raids and cozy business relationships.
TAMPA - Hillsborough's biggest house - the 11-bedroom, 17-bath mansion at 16229 Villarreal de Avila - has been many things since it was constructed on three lots overlooking Lake Chapman in 1992. It was a bargaining chip between the Securities and Exchange Commission and convicted corporate raider Paul A. Bilzerian, who built the house with his wife, Terri Steffen. It has been the subject of the county's longest-running tax dispute. And it was the target of federal agents who seized records in a securities investigation that has spawned a $30-million civil suit against the FBI agent who led the raid.
Now, the 30,698-square-foot home is on the verge of becoming a symbol of high-end real estate speculation accomplished through some cozy relationships.
The home, most recently appraised at $6.06-million, was sold a year ago to Belgian businessman Jacques Chrysochoos for a song: $2.55-million. He never moved in. Instead, he allowed the seller, Steffen, to stay in the home rent-free with her husband, Bilzerian.
To pay the bills on the house and make improvements, Chrysochoos got a big loan from the family of Bilzerian's next-door neighbor, Ernie Haire III, a car dealer who has a variety of business interests with Bilzerian and was even drawn into a criminal investigation involving Bilzerian.
Chrysochoos is now trying to sell the mansion for $10-million. His real estate agent: Steffen, one of his rent-free tenants.
And Steffen is peddling the house for the big price while she is also in court arguing that a 10-year-old tax assessment for the sprawling house of $4.83-million should be cut in half.
"Something about that doesn't add up," said Hillsborough Tax Collector Doug Belden, named as a defendant in the tax suit along with county Property Appraiser Rob Turner.
The tax dispute began in the early 1990s and shifted to federal court after Steffen filed for bankruptcy in 2001. Steffen became owner of the Avila mansion when she and Bilzerian transferred it to a company she controls called Overseas Holdings Limited Partnership as the SEC was trying to collect a judgment from Bilzerian.
The tax complaint covers the home's assessments from 1995 through 2004, but establishes 1995 as a base year, with a cap to apply to other years. The property appraiser set the 1995 assessment at $4.83-million. Steffen said it should be $2.11-million.
Turner said he was baffled by last year's $2.55-million sales price, particularly during a real estate boom. But Bilzerian and Steffen have argued that the mammoth property - it has 3.4 acres, a 5,400-square-foot guest house and a full basketball court on the second floor of the main house - is so large and difficult to maintain that it has a limited marketability.
"Yeah, we did get a great price last year, and $10-million is quite a markup," said Chrysochoos. "But it's such a large home. It will be a challenge to sell."
Chrysochoos, 34, is a businessman who operates Louisiana nightclubs and restaurants and is starting a Tampa mortgage brokerage company. He resides in a $1.07-million Harbour Island home and enjoys an $854,900 retreat on Clearwater Beach and a $850,000 Sunseeker Predator yacht.
A former securities broker, Chrysochoos was disbarred by the National Association of Securities dealers two years ago after failing to notify his firm of outside business investments in New Orleans clubs like Ragin' Rooster and Howl at the Moon.
Chrysochoos was left wondering last week just what remains of his New Orleans ventures after Hurricane Katrina.
"We have probably 400 employees in New Orleans," he said. "And 90 percent of them don't have homes anymore."
Haire, 50, president of Ernie Haire Ford in Tampa, acknowledged steering Chrysochoos to the Bilzerian-Steffen home. Haire has invested with Bilzerian and oversees a trust for Bilzerian and Steffen's two children. Haire once employed Chrysochoos' brokerage firm, Shields & Co., for investments.
Haire's mother, Mary K. Haire, loaned Chrysochoos $730,927 to finance the Avila home, about the amount Chrysochoos said he has sunk into the property in improvements, mortgage costs and the steep utility bills that come with a home with 20 air-conditioning units.
Chrysochoos said last year's deal allowed Bilzerian and Steffen to continue to live at the mansion rent-free for a year, an arrangement that has now been extended, month to month, while the home is for sale.
"I wouldn't live in it myself," Chrysochoos said. "It's too big. It costs too much."
In a e-mail to the St. Petersburg Times, Bilzerian said he and his wife have no business relationship with Chrysochoos except the sales listing with Steffen through Coldwell Banker.
"Mr. Chrysochoos has made it clear that he would never do business with me because of the bad publicity I tend to generate," Bilzerian added in his e-mail.
The negative publicity has its roots in a securities conviction 16 years ago and a series of battles with the U.S. government that culminated in FBI raids on the homes of both Bilzerian and Haire.
Bilzerian, 55, is a high school dropout who went on to graduate from Harvard Business School and earn a Bronze Star while serving in the Army in Vietnam. He made a fortune as a corporate takeover artist with bids on companies such as Hammermill Paper, Allied Stores and the Singer Co.
But in 1989, Bilzerian was convicted of securities violations. He served 13 months in prison and paid a $1.5-million fine.
Then, in a 1991 ruling, the SEC won a judgment against Bilzerian worth $62.33-million for illegal stock manipulation. Bilzerian declared bankruptcy twice. He also poured millions into the construction of his Avila homestead, which under Florida law was protected from creditors.
In January 2001, Bilzerian was jailed for almost a year on contempt charges after a federal court found he lied about financial holdings believed hidden in offshore accounts and in foreign trusts.
He was freed only after Steffen signed a pact with the SEC, agreeing to sell the Avila home and split the proceeds with the U.S. government. She also handed over 3.18-million shares, worth $1.2-million, of stock in Cimetrix, a Salt Lake City maker of software for industrial robotics once run by Bilzerian.
During the 2001 incarceration, the FBI escalated the battle with Bilzerian, according to court records, by raiding his home and Haire's home on Avila in search of evidence of securities and bankruptcy fraud.
First, agents pored over documents thrown out in the Bilzerian trash. They retrieved bank records, personal notes and letters to parties in the Cook Islands and Grand Caymans concerning stock certificates, according to the affidavit for search warrants filed by FBI agent Kelly J. Thomas.
Then came the raids. On June 9, agents searched Haire's house, seizing $69,060 in cash from a floor safe, two firearms, piles of computer disks and personal and financial records. Two days later, the FBI entered the Bilzerian home and hauled off several computers, a truckload of files and a Beretta handgun.
Thomas' affidavit for the search warrants was made public only last month. In it, the agent said investigators believed Bilzerian was manipulating the price of Cimetrix stock and had promised Haire he could quadruple the worth of $3-million Haire had invested in Cimetrix.
Thomas also cited testimony from an informant, called CW1, for "cooperating witness 1," that Bilzerian had transferred $1-million to Haire from a secret offshore account, in apparent violation of bankruptcy laws.
No criminal charges have been brought in the wake of the Avila raids. Haire still has not received back the $69,060 seized, though he and Bilzerian both say other records have been returned.
The U.S. Attorney's Office declined to comment on the investigation. But the return of the seized records and the unsealing of FBI agent Thomas' affidavit suggests the investigation may have run its course.
In the meantime, a furious Haire filed a $30-million civil suit against Thomas three months ago, saying his constitutional rights were violated by the FBI search.
"It's atrocious. It's outlandish," said Haire. "It's a horrendous civil rights violation.
In his lawsuit, he quotes the FBI's own "cooperating witness 1" as saying that agent Thomas had remarked, "I'm going to kick Ernie Haire's a--. I'll put something on him Ajax won't take off."
Bilzerian, who listed his net worth in 1989 at $89-million, now says he's penniless and relies on income from his wife's real estate commissions.
Bilzerian expects the luxury and spaciousness of 16229 Villarreal de Avila will soon be a memory.
"(Terri) has been looking at small condominiums in the area and will hopefully find one before the house is sold," he wrote in an e-mail last week. "Our days here are numbered, and I expect we will leave in the next month or so."
Times researcher Cathy Wos contributed to this report. Jeff Testerman can be reached at 813 226-3422 or by e-mail at testerman@sptimes.com