MIAMI. – To help uncover the truth in a Dominican Republic real estate investment scheme, U.S. District Court Judge Alan S. Gold appointed a special master to examine the accounting and business records of a father-son Canadian development team.
In his May 22nd ruling, the Miami federal judge appointed a special master in the lawsuit against Frederick and Derek Elliott, noting in his ruling: “At this juncture, I conclude that it is best to appoint a special master to investigate and recommend resolution of the many issues present in this case. He will assess the viability of the [Elliotts] business plan and the accounting records.”
The Elliotts have been named in a series of lawsuits filed by U.S. and international law firms, including Miami firm Diaz Reus & Targ, LLP. The plaintiffs’ suits seek to preserve as many Elliott-related assets as possible, including personal property, bank accounts, and real estate.
Noting that the special master will need time to sift through the Elliotts’ complex web of corporate entities, Judge Gold also continued a freeze on a Florida trust account controlled by the Elliotts. He also stated that the U.S. is the appropriate jurisdiction for this international lawsuit.
In accordance with Judge Gold’s order, the special master will also serve as the Miami court’s liaison with the courts in the Dominican Republic, where investors have already won several legal victories.
In the Dominican Republic, Judge Katia Gomez German issued a temporary restraining order on May 1st ordering the Elliotts not to transfer, dissipate, or otherwise encumber assets up to US$34 million in value. Noting in her ruling that the Elliotts have not honored their financial obligations to hundreds of buyers and investors in their resort properties at Sun Village in Puerto Plata and Juan Dolio on the DR’s south coast, Judge Gomez German said, “The Elliott defendants have principally dedicated themselves to diverting investor monies. As a result, the plaintiffs have been defrauded.”
Despite raising US$91 million from investors for the Juan Dolio project, the remodeling remains US$13 million short of completion by the Elliotts’ own admissions. In recent depositions, the Elliotts stated that had they not paid themselves US$25 million out of the US$91 million collected from investors, the Juan Dolio Hotel would have been completed by now.
While the Elliotts have made public claims that lawsuits filed against them have been the cause of their financial difficulties, the Elliotts, in their depositions admitted that that plaintiff’s lawsuit has only resulted in the cancellation of one contract for purchase at the Juan Dolio in two years.
Further legal actions against the Elliotts for their real estate scheme may be filed in other jurisdictions where the Elliott companies are incorporated.