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Bilzerian mansion stays in family

The sale of his Avila mansion got the corporate raider out of jail. Days later, it was in control of his in-laws.

By BILL COATS
Published April 13, 2006

TAMPA - Convicted corporate raider Paul Bilzerian got out of jail because his wife agreed to sell their Tampa mansion, the biggest home in Hillsborough County.

But recently filed court documents show that sale two years ago was virtually reversed 22 days later in a private deal.

The new owners: Harry and Lois Steffen, the parents of Bilzerian's wife.

Just how much the Steffens paid for their 99 percent interest in the Avila mansion is a mystery.

And how much control Bilzerian, his wife and her mother retain over the house is legally murky.

Lois Steffen's attorney is scrambling in circuit and appellate courts to stop a planned April 27 auction of the property, so far without success.

Auctioneers planned to advertise the 30,698-square-foot house in today's Wall Street Journal, and have loaded Web sites with color photos of the spa, home theater, chandeliers and basketball court. The Web sites don't mention recent efforts to evict the Bilzerians. Those stopped after Steffen filed suit.

Bilzerian's mother said he was out of town.

The federal government, which had pressured Bilzerian's wife, Terri Steffen, to sell the mansion and split the proceeds with the government, is not involved in the sale. The previous sale is what sprang Bilzerian in 2002 from a Miami prison where he was being held for contempt of court. The U.S. Securities and Exchange Commission had won a $62.33-million judgment against Bilzerian for illegal stock manipulation, on top of a 13-month prison term for criminal violations.

So in May 2004, Terri Steffen sold the house to a partnership controlled by businessman Jacques Chrysochoos for $2.55-million. The county property appraiser scoffed at the low price. But attorneys representing the SEC approved it. Two of those lawyers did not return telephone calls Thursday.

Terri Steffen's parents, through a family trust, bought a part interest in the limited partnership three weeks after the mansion was sold.

Harry Steffen died on Sunday, leaving his wife the sole officer of the partnership.

The arrangement of Chrysochoos' purchase two years ago is feeding the dispute.

Although Bilzerian's in-laws ended up with 99 percent interest in the limited partnership that took ownership of the house, Chrysochoos and a company he set up continued in control, even though they owned just 1 percent.

Chrysochoos then sold that 1 percent to someone with ties to Bilzerian, Mary K. Haire.

For a while everyone seemed to agree that selling the house was a good idea. But there was a falling-out over the choice of an auctioneer.

Haire is co-owner of Ernie Haire Ford. Her son, Ernie Haire, is the dealership's president, Bilzerian's next-door neighbor and a former investor with him.

Mary Haire invested heavily in the house, but is now at odds with the Bilzerians and his mother-in-law over the sale.

Mary Haire loaned Chrysochoos $730,927 to finance his purchase. Her secretary-treasurer in the partnership, Fred Shrum, said she also paid for insurance and upkeep, and is owed more than $3.6-million.

For much of last year, all the partners agreed to let Terri Steffen act as the real estate agent in the sale of the mansion. But by February, they had decided to auction it.

The Steffens want Michael Peters of Clearwater's American Heritage Auctioneers, who has collaborated with Terri Steffen and auctioned other Avila homes.

Haire supports Higgenbotham Auctioneers International of Lakeland.

Each side has accused the other of impeding the efforts of each auctioneer to market the mansion.

Lois Steffen's lawsuit pressed the issue, urging Circuit Judge Richard Nielsen to put the sale of the house in the control of an independent party, specifically Peters. The judge quickly obliged.

But instead of appointing Peters as receiver, he appointed Michael Luetgert. Luetgert chose Higgenbotham as auctioneer.

"I saw the address, and I knew exactly which home this was," said John Haney, Higgenbotham's auction manager.

Higgenbotham is requiring each bidder to commit to buy the house for at least the minimum bid, $3.6-million. That roughly would cover the mortgages and Haire's debts, Shrum said.

If the house sells higher, the first $300,000 in profits also go to Haire through a prior agreement. Lois Steffen gets anything above that.

Whatever the high bid, a 10 percent buyer's premium will be added to cover Higgenbotham's expenses.

Haney said this week he was close to signing up the first bidders, meaning the house would sell for at least the minimum.

"We've had a fairly good amount of calls," he said.

Thursday morning, Nielsen held his second hearing in three days in the case, shaking his head at the maneuvering that has taken place since it was filed on March 1.

"Now, everybody who opposed the sale is in favor of it, and everybody who was in favor of it opposes it," Nielsen mused.

Bill Coats can be reached at 813 269-5309 or coats@tampabay.rr.com Times staff writers Jeff Testerman and Brady Dennis contributed to this report.

[Last modified April 13, 2006, 23:56:01]