Court: Where is the $4M?

Landlord Steven Green has yet to pay restitution in a fraud and tax evasion case.

By JEFF TESTERMAN, Times Staff Writer
Published November 21, 2007

The assets of Steven Green, who had been in a coma, are declining, a new financial statement says.
	[Carrie Pratt | Times]

ADVERTISEMENT [Times files (2002)] Steven Green, who owns this Tampa home, has failed to pay $4.11-million in restitution.

TAMPA - When millionaire landlord Steven Green was sentenced to prison on fraud and tax charges in February, he was ordered to pay $4.11-million in restitution. The judge gave him eight months to sell off properties to raise the money.

That time has passed, but Green has not paid one cent.

On Tuesday, U.S. District Judge Susan C. Bucklew wanted to know why Green, whose net worth was put at $77-million at sentencing, has not paid anything.

"There appears to be a substantial amount of cash that could be used to pay the restitution," the judge said as she studied a recent Green financial statement. "Why can't it be paid?"

There weren't any pat answers. Green, a 42-year-old New York philanthropist and investor, was left in a coma for two months after a hit-and-run accident outside a Hell's Kitchen nightclub in May. His attorneys say he's receiving $5,000-a-day rehabilitation at New York's Mount Sinai Hospital but remains so impaired he may never return to the helm of his business empire.

In the meantime, the value of Green's financial holdings appears to be in a free fall since his sentencing, and no one seems to know why.

Last year, as the government investigated Green, he sold off more than $100-million of his Tampa-area real estate, leaving him with what prosecutors said in February was a net worth of $77-million.

Today, according to a new statement filed by Green's top financial officer, the net value of Green's holdings has plummeted to $12.7-million. Assets total $222-million, including 24 apartment complexes, but they are encumbered by $209.3-million in mortgages.

At Tuesday's hearing, Green's attorneys said much of the $8.86-million listed as cash on Green's financial statement was secured by a loan and could not be touched. They also said remaining cash was needed to keep Green's enterprises afloat.

Bucklew did not like what she heard. She found fault with an argument from Green's attorneys that the restitution was guaranteed by the value of Green's Essex House condo in Manhattan, where the government had placed a lien until the $4.11-million is paid.

But Bucklew noticed that while the luxury condo has a value of $3.3-million, it also has a $2.9-million mortgage, leaving equity of just $400,000- grossly insufficient to protect restitution of $4.11-million.

Repayment plan

The judge and Assistant U.S. Attorney Robert Mosakowski both objected to a repayment plan advanced by Green's financial managers.

The plan, calling for four payments in 2008, did not take into account interest adding up daily. It also seemed designed to allow Green's managers to sell properties when the timing was most profitable.

"We don't want to put their whole company under," said Mosakowski, "But it seems like they want to liquidate at the most advantageous time at the expense of the victim in this case."

That victim is Wells Fargo. The bank loaned Green $9-million to buy the Amberwood Apartments in northern Hillsborough County, then ended up with a loss after Green stopped making payments on the 212-unit complex.

A 2001 fire damaged 20 units at Amberwood; inspectors then found hundreds of code violations and condemned the complex, displacing dozens of tenants.

A year ago, Green pleaded guilty to using a phony Social Security number to obtain the Amberwood loan, as well as to failing to file income tax returns from 1999 to 2001, when his personal income exceeded $3-million.

Never mentioned in Tuesday's hearing were assets left off Green's latest financial statement, including:

-A five-bedroom Hyde Park mansion at 801 S Delaware Ave. in Tampa, under contract for sale to local attorney Barry Cohen for $4.2-million, but not yet sold because of a legal dispute.

-A $1.44-million home at 3 Wigwam Road on the island of Nantucket.

-A jet that was part of Green's charter air company and valued at $4.6-million, according to Louis Cherico, one of Green's attorneys.

In an interview, Cherico said he couldn't explain the omissions because he had no role in compiling the financial statement.

Green attorney Edward Kratt described Green's condition as "childlike" and said he feeds himself "like a baby feeding himself." Kratt told the judge it may be a year or more before doctors know whether Green's condition may improve sufficiently for him to report to prison.

Green's mother, Mary R. Green, is seeking court approval to become his permanent guardian, which would put her in charge of his assets.

Mary Green, a widow and a retired Department of Veterans Affairs nurse, paid $1.84-million cash last year to buy a home in Rancho Mirage, Calif. It is unknown if her son assisted her with the purchase.

Bucklew decided Tuesday she wants to hear more, about Steven Green's condition and about the condition of his finances.

She set a hearing Dec. 10 to hear testimony from Green's financial managers. She also asked the prosecutor to interview Green's physician or send court officials to New York to view Green in the hospital for themselves.

Jeff Testerman can be reached at testerman@sptimes.com or 813 226-3422.

[Last modified November 20, 2007, 23:37:49]