HOBE SOUND, Fla. – James C. Roets may not be in charge, but he’s clear about who is.
Suffering by his own admission from “short-term memory loss” and a bipolar disorder, the Central Florida resident nonetheless is listed as an officer in nearly a dozen limited liability corporations, including one Roets maintains is actually a front for Massachusetts native and real estate felon William W. Lilly. That vehicle, Palm Beach V LLC, recently sold a West Palm Beach, Fla., property that had been tied up by Bay Communities Real Estate, a firm the government claims is secretly being run by Lilly.
“That’s Bill Lilly,” Roets said when asked about ownership of Palm Beach V during a brief interview recently at his one-story duplex, located in Hobe Sound on a dusty side street just off Route 1. Roets, who said he knows little about Lilly’s background, reported he had been at a closing days earlier for the West Palm Beach property, with Palm Beach V transferring the development rights to Stratford Greens LLC, a New York company. Palm Beach County Registry of Deeds records indicate the sale occurred on March 12.
Lilly was convicted in 1991 of real estate and banking fraud committed in Massachusetts and sentenced to five years in federal prison. Known as the “Condo King” during his years as a residential developer in the Bay State, Lilly recently agreed to repay $5 million in restitution owed to the Federal Deposition Insurance Corp. for causing the failure of two banks, including a Florida institution located a short distance from the West Palm Beach site sold by Palm Beach V. Federal officials charge Lilly had tried to avoid paying the levy by using his girlfriend, former Bay State resident Valerie E. Kaan, and several colleagues to mask his ownership in various companies, including Bay Communities. Kaan and Lilly now live in a $3.6 million mansion in Boca Raton, Fla. Still on probation, Lilly has a lifetime ban that prevents him from working in the real estate business.
In the West Palm Beach sale, as well as other documents related to Palm Beach V LLC, Roets signs his name as manager. He is listed as such in records on file at the state’s Division of Corporations, as well as Palm Beach County’s Registry of Deeds. But the middle-aged Floridian told Banker & Tradesman that he has no actual duties with Palm Beach V, other than receiving correspondence directed to the entity such as incorporation forms and various business-related missives.
“I’m just the mail drop,” Roets said before declining further comment, explaining he had to finish mopping his floor. “I collect the mail and forward it on.”
The corporation was formed through Robert Lee Shapiro, an attorney in Palm Beach Gardens, Fla., who has structured similar LLCs with Roets named as an officer. Shapiro’s office also was used to create Azure Highland Beach Condominium Association LLC in October 2000. That company names Kaan and Bay Communities principal William F. Harkins as officers. Azure Highland is a condominium project in Highland Beach, Fla., that Bay Communities supposedly is developing, although virtually no progress has been made in constructing that building during the past two years.
Shapiro did not return phone calls from Banker & Tradesman last week, while Harkins and Kaan also did not respond to inquiries made through Bay Communities’ headquarters in Palm Coast, Fla. Florida Division of Corporations spokesman Jay Kassees said last week he was unaware that Roets has been serving as a straw for Palm Beach V, but promised his office would investigate the matter. “If he’s just a mail drop, he’s not the manager,” Kassees said.
Kassees added, however, that the Division of Corporations has no unit to pursue discrepancies in corporate filings. “We really have to accept the information at face value,” he said, relying solely on the honor system. Typically, he said, the agency will refer the matter to the state attorney to determine whether a company is acting inappropriately. In some instances, he said, an LLC found to have a fictitious officer has been involuntarily dissolved.
Universal Success
An additional twist to the corporations filings involves another company known as Consolidated Financial LLC. Although no officers are listed, it was also prepared by Shapiro’s office and lists Roets’ residence at 8668 S.E. Oleander St. as the headquarters. Formed last June, Consolidated Financial has been involved in real estate business with a stalled Bay Communities project in Flagler County, Fla., known as the Surf Club II. Roets would not discuss that company when asked about its leadership or purpose.
The property that Palm Beach V LLC sold to Stratford Greens LLC previously had been owned by the Jehovah’s Witnesses. Bay Communities initially tied the site up in December 1999 through a firm known as J.W. Macara, and company officials had told West Palm Beach officials they were aiming to build a 620-unit condominium development known as Mizner Lakes. In December 2001, however, J.W. Macara assigned its rights to the site to Palm Beach V LLC, which then sold it to Stratford Greens in March.
Daniel Rice, a spokesman for Jehovah’s Witnesses, said he was unsure who the religious order dealt with in transferring the property. Efforts to contact officials at the Flagler Title Co., which assisted in the sale, were unsuccessful.
One company relieved to see the sale go through was Universal Engineering Sciences, which had been owed more than $10,000 for site work it performed for Bay Communities during the past year. Universal placed a lien on the West Palm Beach property and ultimately was repaid by the proceeds from the sale to Stratford Greens, using the strength of Florida’s lien law. “It worked out well for us,” said Lutz, whose firm is one of several dozen companies in Florida that has been forced to take legal action against Bay Communities in the past two years for non-payment of goods and services.
