Article Courtesy of The
Palm Beach Post
By Jane Musgrave
Published January 22, 2018
WEST PALM BEACH -- A 74-year-old developer who
operated from offices in Palm Beach faces a possible five-year prison
sentence after admitting to a federal judge on Thursday that he
submitted phony documents to banks to keep an oceanfront condominium
project in Vero Beach afloat.
Once facing eight counts of bank fraud, George Heaton
pleaded guilty to a single charge of conspiracy to commit the offense of
making false statements to a federally insured institution. The plea
deal allowed him to escape the more serious charges, each of which was
punishable by a maximum 30-year sentence.
Heaton, who has developed dozens of hotels, restaurants, condominiums
and office buildings throughout the country, admitted that during the
height of the housing crisis — from November 2006 to September 2009 — he
lied to banks as part of a complex scheme to keep money flowing for the
construction of the luxury Vero Beach Hotel and Spa.
As part of the plea agreement, Heaton agreed to repay $263,000 and will
likely be forced to reimburse the banks an estimated $3.3 million that
federal prosecutors said the institutions lost in what they described as
a $20 million scheme.
The president of Heaton Cos., with offices on Royal
Poinciana Way, admitted he secretly paid down payments and offered cash
rebates and other incentives to buyers of condominium units in the
popular development. His undisclosed actions made it difficult for
lenders to judge the financial ability of buyers to repay mortgages on
units that sold for as much as $1 million. Some of the units went into
foreclosure, costing the banks the estimated $3.3 million, prosecutors
George Heaton, with Carmen Bernard, at Polo Players
Support Group reception at DTR Modern Galleries .
The incentives allowed Heaton to convince his lender that the project
would be a success, prosecutors said. Under the terms of his agreement
with Orion Bank, now Iberia Bank, Heaton had to have a certain number of
units sold before it would release a $23 million construction loan,
according to court documents. Court records show that according to the
terms of that loan, the purchase contracts had to be “bona fide
Heaton didn’t act alone, prosecutors said. Deborah Dentry Baggett, 55,
an accountant who worked for Heaton and now lives in Tennessee, last
week pleaded guilty to the same charge for her role.
Like Heaton, she agreed to testify against Vero Beach attorney Eric
Granitur, who is fighting two charges of bank fraud and one count of
conspiracy to commit bank fraud. Granitur, 60, served as the title and
escrow agent and handled the closings on the condominium units where
lucrative incentives were offered to buyers, prosecutors said.
Attorney David Oscar Markus, who represents Heaton, told U.S. District
Judge Robin Rosenberg he is hopeful Heaton will be rewarded for his
cooperation with a reduced sentence. Granitur’s trial, scheduled for
next month, could be delayed until summer. Heaton will be sentenced when
the trial is over.
“We’re working with the prosecution and Mr. Heaton is committed to doing
the right thing,” Markus said outside the courtroom. “George is a good
guy. The prosecutor is a good guy. Hopefully, we’ll be able to work it