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