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A matter of loss in case of fraud

By JEFF TESTERMAN
Published February 12, 2007

TAMPA - Five years ago, New York real estate investor Steven Green made headlines when his company's Amberwood Apartments became Hillsborough County's largest-ever code enforcement case, with hundreds of violations, dozens of displaced residents and fines that ballooned to $1.3-million.

Last year, it morphed into a criminal case, when Green was charged with federal fraud for using a phony Social Security number when he applied for a $9.04-million loan on Amberwood.

The case appeared near resolution in November, after Green pleaded guilty to the felony fraud charge and three misdemeanor charges of failing to file personal income tax returns. Green, a 42-year-old millionaire with mansions in Tampa, Yonkers and Nantucket, was to be sentenced Tuesday.

But the sentencing has been put on hold for a month because of a dispute about how much Green's fraud damaged a Tampa lender. How that question is answered could determine whether he gets probation or goes to prison for more than five years.

U.S. probation officials say Green's fraud caused financial losses ranging from $2.5-million to $7-million. But Green solicited a letter from an executive at a New York financial services company saying that on the loan involving the fraud, there was no loss at all.

The executive, Robert E. Monaco, lost his job earlier this month after his superiors at CharterMac learned he had written the unauthorized letter on company letterhead.

Monaco, who said in a telephone interview that he knew Green through previous business dealings, said he was just "offering an opinion" when he wrote the letter to probation officials.

Les Zorn, deputy chief at the U.S. Probation office in Tampa, confirmed his office had received Monaco's letter but declined to discuss it.

Green's attorneys also declined to say much about Green's solicitation of Monaco's letter.

"I would rather not comment," said New York attorney Edward M. Kratt. "If that's what Mr. Monaco said, that's what he said."

U.S. District Judge Susan C. Bucklew scheduled a hearing March 9 to consider the question of loss. Sentencing is scheduled the same date.

If Green's actions caused no financial loss, his defense team argues, Green should receive no more than six months behind bars, in part because of his business accomplishments, generous support of charities and worsening health problems.

But if the estimate of probation officials is correct and the loss is in the $2.5-million to $7-million range, federal guidelines point to a sentence of 51 to 63 months in prison.

Bucklew is not bound by the sentencing guideline. The judge could give Green probation or sentence him to the maximum, five years on the fraud charge and a year each on the three tax charges.

If a loss is determined on the fraud charge, Green may be required to make restitution. He already has paid the government $912,613 for income tax due as a result of failing to file tax returns for the years 1999, 2000 and 2001, a period when his income exceeded $3.12-million.

Negative publicity

A former delicatessen worker, Green skipped college to begin investing in and renovating run-down rental units in Harlem. He purchased small apartment buildings in the Bronx, and after his mother retired to Fort Lauderdale, he invested in larger apartment complexes in Florida and Tennessee.

Now he has extensive property holdings in four states and a "boutique" charter airline that caters to celebrities. In a financial statement filed when he sought the Amberwood loan, Green listed a net worth of $34.5-million. In recent months, Green sold eight Tampa Bay area apartment complexes for prices totaling nearly $100-million.

But with Green's success has come some negative publicity. In a Village Voice story in the early 1990s, he was listed among the top 10 worst landlords in New York City, sued by the city dozens of times to collect for violations. In Tampa, after fines rose to $1.3-million at Amberwood, Green settled the case in 2005 with an apology and a check for $150,000.

In using a fake Social Security number for the Amberwood loan, Green's attorneys say, he merely sought to keep his business afloat after his credit was jeopardized by a substantial civil judgment "unfairly entered against" him in New York.

Following a fire at Amberwood and the shuttering of the complex by Hillsborough County inspectors, Green's holding company stopped making mortgage payments. The bank sued, winning a judgment for $9.49-million.

The lender later sold Amberwood to Boca Raton investors for substantially less, leaving a loss estimated at $5-million to $6-million.

But Green's attorneys say the Amberwood loan was a "non-recourse loan," meaning Green was not personally liable for its repayment.

"Hence, his use of a false Social Security number was not fraudulently material in his obtaining the mortgage," they say in their sentencing memorandum.

Some compassion

In seeking leniency, Green's attorneys have submitted a dozen letters from friends, business associates and charity workers who attest to Green's generosity and good works.

One is from Academy Award nominee Lorraine Bracco, of Goodfellas and The Sopranos fame. Bracco describes herself as a friend of Green's for 10 years and characterizes him as "one in a million ... a pillar of strength and a person all his friends lean on."

Green suffers from a chronic bowel disorder made worse by alcoholism, the sentencing memo says. The medical disorder contributes to insomnia, depression, memory loss and other problems, and calls into question whether Green could expect to receive adequate medical treatment if sentenced to prison.

The memo stresses the remorse Green feels for his crimes. While outwardly maintaining the appearance of a hard-working businessman, the memo says, "Inside, he is a broken man, mortified by what he has done and the consequences that he accepts and knows will follow."

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

[Last modified February 12, 2007, 01:16:06]