Article Courtesy of The Miami
Weaver and Nadege Green
May 22, 2014
Prosecutors say Lucie Tondreau‘s radio show played a key
recruiting role in a mortgage fraud scheme that cost lenders $8 million.
Before she was elected mayor of North Miami last
year, Lucie Tondreau co-hosted several radio programs that federal
authorities say were the key to an $8 million mortgage fraud scheme.
According to an indictment unsealed on Monday, Tondreau and co-host Karl
Oreste, a mortgage company owner, used the Creole-language airwaves to
reel in “straw borrowers” who filed bogus loan applications to buy 20
homes across South Florida — and then cut the future mayor and her
partners in on the profits.
|Tondreau, 54, technically wasn’t
under arrest yet as of Monday afternoon — but only
because she wasn’t home when FBI agents showed up at her
door. She was attending a convention in Las Vegas.
But she faces criminal charges when she returns,
possibly as early as Monday night, and a potential
suspension from office by Gov. Rick Scott, who has the
power to remove elected officials charged with a crime.
“Our office is aware of this situation and will take
appropriate action once federal officials provide the
indictment,” said John Tupps, a spokesman for Scott’s
office. “Governor Scott believes every public official
should be held to the highest ethical standards.”
The federal charges are just the latest legal troubles
for Tondreau, who last June became
Miami Mayor Lucie M. Tondreau speaks at a press conference to
discuss their next steps in the lawsuit filed against them by
the Museum of Contemporary Art Tuesday, April 29, 2014. Federal
agents were searching early Monday, May 19, 2014, for North
Miami Mayor Lucie Tondreau to charge her with mortgage fraud.
the city’s first Haitian-American female mayor. She
handily defeated Kevin Burns, a white candidate, in an election fraught
with racial tensions because of the changing demographics of one of
Miami-Dade’s largest cities.
But her campaign quickly faced state scrutiny. Last year, state
prosecutors linked online absentee-ballot requests made in bulk to her
campaign office. Florida law prohibits ballot requests to come from
anyone other than voters themselves or their family. Tondreau has not
been charged and has denied any wrongdoing
Her supporters remain steadfast — at least for now. Former North Miami
Mayor Andre Pierre also said he and many others will continue to back
the mayor despite the investigations. He urged the public to wait for
the cases to play out before jumping to conclusions.
“Nothing changes as far as my support for the mayor. If the governor
steps in and removes her from office, the city council will have to
figure out the best way to proceed,” Pierre said. “Personally, for me,
nothing has changed.”
Charged along with Tondreau are Oreste, 56, of Miramar, and two other
defendants, Okechukwu Josiah Odunna, 49, a disbarred Lauderdale Lakes
lawyer, and Kelly Augustin, 57, a former North Miami recruiter for
Oreste’s mortgage firm. All four face charges of conspiring to commit
wire fraud and actual wire fraud between 2005 and 2008 — offenses that
carry up to 20 years in prison. Prosecutors claim that lenders suffered
loan losses of $8 million.
Oreste made a first appearance in Miami federal court. Magistrate Judge
John O’Sullivan released him on a $50,000 bond, based on an agreement
between prosecutor Lois Foster-Steers and defense attorney Frank Rubino.
He declined comment.
Tondreau’s defense attorney, Ben Kuehne, told The Miami Herald that his
client called after family members notified her that FBI agents had come
to her North Miami home with an arrest warrant.
“I would have liked to surrender her voluntarily,” Kuehne said. “That’s
what I’m working on now.”
While federal agents searched for her in Miami, Tondreau was on the
other side of the country attending RECon, the International Council of
Shopping Centers' global real estate convention, in Las Vegas.
City spokeswoman Pam Solomon said Tondreau and Lesly Prudent,
coordinator of the the city's Community Redevelopment Agency, are at the
conference to attract businesses to North Miami. Solomon said Tondreau
was planning to cut her Vegas trip short to return to Miami Monday
evening or Tuesday.
Tondreau did not respond to voice mail or texts sent to her cellphone.
News of the federal charges quickly spread through the community.
State Rep. Daphne Campbell, who campaigned for the then-mayoral
candidate during the 2013 city elections, said she did not know the full
details but said her support had not waned.
“I’m still supporting her; she is part of the Haitian community,”
But some members of the North Miami City Council are bracing for a
possible suspension or removal from office.
In the past year, three sitting South Florida mayors — Manny Marono of
Sweetwater, Michael Pizzi of Miami Lakes and Steve Bateman of Homestead
— were removed from office by Gov. Rick Scott after they were arrested
on corruption-related charges.
City Councilman Scott Galvin said the council would likely appoint an
interim mayor until an election can be held within two months of
Tondreau's removal. Voters would choose a new mayor to serve out the
rest of Tondreau's two-year term.
“It comes at a very unfortunate time,” Galvin said. “We will have to
handle yet another controversy in stride and keep the city business
Tondreau is a veteran public relations and political consultant, most
recently as the outreach specialist for the Biscayne Landing project
through her company Tondreau and Associates.
She was recently treasurer of NIC Investment Corps, which is run out of
her North Miami-based office by Charles Nacivre, her campaign manager.
For years, Tondreau has been a trusted voice on Creole-language radio.
Long before she became North Miami mayor, Tondreau built a reputation in
the 1980s and ‘90s as a vocal Haitian rights activist in South Florida.
Tondreau hosted a number of radio programs on the AM dial, including
L’ouvri Je or Open Your Eyes. She is also a regular guest on Haitian
targeted programs on WLQY 1320 AM and Radio Mega 1700 AM.
Shortly after the mayoral election, Tondreau said she would ask the city
attorney for an opinion if she could could continue her side job as a
radio host. It’s unclear if Tondreau currently has programs on the air.
According to the federal indictment, Tondreau and Oreste teamed up to
host several radio programs that advertised his brokerage company, KMC
Mortgage. They’re accused of recruiting and paying some of those
listeners and others to pose as borrowers to buy South Florida real
estate, prosecutors said. Augustin, a KMC Mortgage employee, also
allegedly recruited straw borrowers.
Oreste and Odunna, the disbarred Florida lawyer who owned a title
company, prepared loan applications on behalf of the straw borrowers to
purchase homes selected by the mortgage broker, according to the
indictment. They falsified the employment, income and other personal
information to help the borrowers qualify for loans, indicating their
purchases were for primary residences.
Oreste, Odunna and other co-conspirators fabricated — and in some
instances duplicated — federal government loan forms, the indictment
said. The paperwork grossly inflated the purchase price of the
properties so the straw borrowers could obtain bigger mortgages.
At closings, some of the loan proceeds were disbursed to Oreste through
his business, JR Investment and Mortgage Corp., or other bank accounts,
or were diverted to Odunna‘s title company.
Oreste also paid off recruiters, such as Tondreau and Augustin, along
with straw borrowers, prosecutors said. He also transferred a
substantial portion of the loan proceeds to LTO Investment Corp., which
was controlled by Tondreau, they said.
Tondreau, prosecutors alleged, used those funds to make mortgage