Justo files for personal bankruptcy

Carlos Justo, the Miami real estate broker to the megastars, who once cruised around town in a chauffeur-driven Rolls Royce and showed seaside mansions to his clients by helicopter, has filed for personal bankruptcy, declaring more than $20 million in liabilities, according to U.S. bankruptcy court documents.

Justo, known for his signature shaved head, white linen shirts and party-boy style, is a symbol that mirrors the mind-numbing high arc and fall of Miami’s hyper-lux residential market. With clients including Shakira, Puff Daddy, Gloria Estefan and Rosie O’Donnell, who bought mega-manses on Star Island, Justo flew from the heights of multimillion-dollar commissions and self-proclaimed personal worth of $20 million in 2005 to a crash landing in bankruptcy court on February 13.

In the 61-page filing, Justo claims assets of $683,989 against liabilities of $20 million. His assets include a $3,500 grand piano, a part interest in a 22-foot Twin Vee speedboat and a $25,000 commission he says Sotheby’s owes.

According to bankruptcy court documents, he is running a personal deficit of $11,760 a month, most of due to on mortgages that are facing foreclosure.

In recent television interviews, Justo, who came from Cuba at the age of 11, said he never finished high school and started out as a bag boy for Publix supermarket, and openly blamed his epic downfall on greed, ego and the desire for more. He said that if he had stayed in the business of selling real estate instead of investing, he could have survived.

According to the bankruptcy filing, he has had 14 lawsuits leveled against him, including six foreclosures. While some suits are pending, others, like the one with his former partner, Irving Padron, have settled, with Padron winning $1.1 million in the fall settlement, according to the court filing.

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It took Justo 30 years to build a real estate empire. The bankruptcy filing’s account of what he owes the Internal Revenue Service in income taxes coincides with the high-flying years of Miami real estate and suggests the high taxable reaches of his personal income.

In 2002, as the market was exploding, Justo raked in commissions and now owes the IRS $2.4 million in personal income taxes for the year. The filing shows he owes $1 million for 2003, another $2.5 million for 2004 and $517,325 for 2005.

Justo has said in interviews that at his personal financial high in 2005, he was worth $20 million. At the market peak, he said he carried $50 million in mortgages on 12 homes. To date, seven homes have been repossessed and five are still locked in the foreclosure process.

The bankruptcy documents his financial slide. In 2007, he made only $1.1 million in gross commissions which slid to $713,298 in 2008. For the first two months of this year, he made commissions of $35,400.

Among his real estate holdings, Justo lists a unit at the Sapphire Beach Resort and Marina condo on the island of  St. Thomas in the Virgin Islands, which now has a federal tax lien on it to recover $225,000. Also in St. Thomas, he lists joint ownership in a boat slip, 3.5 acres of land and a Ritz Carlton timeshare.