Bonita Bay Group faces fraud charges

The Florida Attorney General's Office is suing Bonita Bay Group, alleging that it broke the law when it took hundreds of thousands of dollars in fees from its club members and then failed to pay them back as promised. The lawsuit was filed in March, but amended May 3 to include allegations of fraud.


The fraud charge is based on depositions from David Lucas, chairman of the Bonita Bay Group, and a chief restructuring officer, who admitted that the membership deposits went into the company’s general revenue, and were used for general corporate purposes such as land purchases, employee payroll and shareholder taxes, according to the lawsuit.


After making the payments to the developer, the members became creditors of Bonita Bay and the transfer of their money made the clubs insolvent, or unable to pay debts as they became due, amounting to fraud, the lawsuit says.


"You have to leave enough money in any organization so that it is capable of paying its debts. To fail to do so willfully is a fraudulent transfer," Michael Lissack, a former Mediterra club member and one of Bonita Bay Group's most vocal critics, told the Naples News.


The lawsuit’s other count is that Bonita Bay violated Florida’s Deceptive and Unfair Trade Practices Act when it suspended its instant refund program for deposits.


Bonita Bay Group’s marketing strategy had been that initiation deposits for its clubs would be refunded within 30 days if members resigned. The developer abruptly stopped its refund program in November 2008 after seeing a rash of resignations and a run on deposits. Deposits for its clubs have ranged from $25,000 to more than $180,000.


Attorney General Bill McCollum has asked the court for an injunction against the developer and full restitution for any victims.


Bonita Bay has defended its actions.


“We are confident that this contractual dispute will be favorably resolved when the facts and law are fully evaluated,” Lucas said in March. “Bonita Bay Group has always operated by the highest ethical standards and we remain committed to the resolution of this issue.”


Bonita Bay was hopeful that it was “out of the woods” after it completed the sale of it’s namesake course in mid-March.


But Lissack said if the Attorney General’s Office is successful in its lawsuit one of the remedies may be to reverse the sale of clubs to members, the Naples News reported.


“Members paid much more than fair market value. One must always take into account the value of the waived deposits,” Lissack said. “If a court holds that the waivers were not freely given, then the whole transaction can be unwound. Many members were coerced into signing the waiver.”

 

Comments

I was interested to read the earlier article praising the Mediterra board for doing the deal. I see the author bought the party line, hook and sinker included. First, all parties agreed that they significantly overpaid. Second, there was significant financial penalties imposed on members who did not join the "new club" (it would cost buyers of a non-members home $50K more than a members home to join the "new club"). Arm twisting is a polite way to put it. We will see how it all plays out but I wouldn't bet against a nullification of the deal and financial penalties.....would serve them all right.

NOTE: THIS COMMENT HAS BEEN EDITED TO EXCLUDE SPECIFIC NAMES UNTIL THIS INFORMATION CAN BE VERIFIED BY THE EDITORS. XXXXX golf group is/has been doing the same exact thing in Texas and trying to do it in florida. They have forged and defrauded XXXX Country Club out of $200,000 + dollars by selling a "LIFETIME" membership for $10,000 included food??? They took all the money and left a month later and have not paid any of it back. They forged documents at XXXXXX CC, and tried to Hornswagle XXXX Country Club in Orlando until we called down there and warned them. They were promptly escorted off the property. WATCH OUT FOR THESE GUYS!!!

I'm glad to hear that "Lissack the nutsack" is now a "former" member of Mediterra...good riddance. David Lucas and BBG have always operated with the highest standards and practices. Do not believe the rantings of a former whistleblower and malcontent.

Someone needs to look into what Lissack paid for his membership, when he quit paying his dues, how long he continued using the club after that. Did he in fact keep charging to his account with no intention to pay? At the same time he kept using the club running up a bill other honorable members kept paying their dues, and paying for their charges in a desperate attempt to keep their club open and salvage their investment. Is Lissack using this terrible situation to simply keep his name in print to inflate his ego? Shame on everyone who keeps using him as a reference regarding this case. There are any number of honorable, intelligent, and reputable individuals to acquire information from. He is not one of them. Any information coming from Lissack is suspect and doesn't deserve consideration!

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