Florida board recommends two-year funding ban for affordable housing developer

Pinnacle recently agreed to pay $5.2M back to the federal government

TRD MIAMI /
Mar.March 27, 2017 01:00 PM

The Orchid Grove apartment complex in Homestead, one of four with inflated project costs.

Miami-based Pinnacle Housing Group will likely be banned from applying for state funding for two years after prosecutors found the affordable housing developer was profiting from inflated costs.

Florida Housing Finance Corporation’s board of directors on Friday recommended the two-year ban for Pinnacle, with most of the board calling a  five-year ban too severe. The state agency also said it would pursue a formal complaint against the developer, according to the Miami Herald.

Federal prosecutors earlier this month found that Pinnacle’s affiliated subcontractor, DAXC, reported inflated costs to receive higher federal subsidies to build shell concrete for four affordable housing projects, including two in Miami-Dade County and one in Broward County. Those projects were: Vista Mar in Miami, Orchid Grove in Homestead and Avery Glen in Sunrise.

The millions of dollars worth of federal grant money and inflated costs benefited Pinnacle principals David Deutch, Louis Wolfson III, Mitchell Friedman and Michael Wohl, and DAXC principal Felix Braverman, prosecutors said. Recently, Pinnacle agreed to pay $5.2 million back to the federal government, which includes a $1 million penalty, as part of a deferred prosecution agreement.

A state administrative law judge will decide whether to endorse the board’s recommendation.  [Miami Herald] – Katherine Kallergis


Related Articles

arrow_forward_ios
Rent reform is propelling a new wave of New York and California investors to Miami (Credit: iStock)

Rent reform in New York, California propels new wave of multifamily investors to Miami

Jorge Pérez with renderings of the projects

Related Group, Atlantic Pacific seek approvals for mixed-use apartment projects

Daily Digest Miami

Partner at Miami law firm resigns amid conflict of interest allegation tied to zoning issue, Redfin will disclose commissions in this US city: Daily digest

(Credit: iStock)

Three arrested in South Florida affordable housing scam

Starwood Capital CEO Barry Sternlicht and the Summerlake Apartments

Starwood Capital pays $11M for affordable housing complex in Davie

Rendering of the Brickell hotel development, Tony Cho and Robert Finvarb

Finvarb and Cho land construction loan for mixed-use hotel near Brickell City Centre

Praxis of Deerfield Beach Apartments and MRK Partners CEO Sydne Garchik

Affordable senior housing in Deerfield Beach sells for $24M

Developer borrows $105M, breaks ground for mixed-use Flagler Village project

arrow_forward_ios