CaribWorldNews, SANTO DOMINGO, DR, Tues. May 19, 2009: In a legal victory for investors seeking to recover their funds in a Dominican Republic real estate scheme, a judge has issued a temporary restraining order against a Canadian father-son development team.
Judge Katia Gomez German on May 1, ordered Frederick Elliott and his son Derek not to transfer, dissipate, or otherwise encumber assets up to $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 Elliotts have principally dedicated themselves to diverting investor monies. As a result, the plaintiffs have been defrauded.`
According to court documents, the Elliotts in 2004 purchased an abandoned 268-room Sheraton hotel at Juan Dolio, and began selling real estate interests to individual investors. Despite raising $91 million for the Juan Dolio project, the remodeling remains $13 million short of completion by the Elliotts` own admissions. In recent depositions, the Elliotts stated that had they not paid themselves $25 million out of the $91 million collected from investors, the Juan Dolio Hotel would have been completed by now.
In a business plan, filed pursuant to a U.S. Court order and yet still marked `draft,` the Elliotts stated that an additional $12.9 million would be needed to reconfigure and complete the Juan Dolio hotel. Moreover, the Elliotts stated that to make the project viable, they would need to change or reconfigure the character of the development significantly — something the Elliotts admit they never told the investors who previously gave them $91 million.
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.
Meanwhile, Michael and Tippy Lawter, the Elliotts` Nevada-based husband and wife sales and communication team also known as NWN Group (a/k/a Net Wealth Navigators), have apparently closed their Nevada office and fled the United States, according to plaintiffs in the case.
Both the Elliotts and the Lawters have been named in a series of lawsuits filed in the Dominican Republic, the Turks & Caicos Islands and the United States by U.S. and international law firms, including Miami firm Diaz Reus & Targ, LLP. The suits seek to preserve as many Elliott-related assets as possible, including personal property, bank accounts, and real estate.
On May 12, despite the request of the Elliotts, a judge in the Dominican Republic did not revoke the May 1st temporary restraining order, and imposed a freeze on their personal and business-related assets in that jurisdiction.
Using a complex web of offshore companies, trusts, and shell corporations, the Elliotts used buyers` money for their personal benefit, according to several court documents and witness affidavits. Further legal actions against the Elliotts for their real estate scheme are expected to be filed in other jurisdictions where the Elliott companies are incorporated and in jurisdictions where the Elliotts may be maintaining bank accounts and hiding assets purchased with the proceeds of sales to investors.