Florida court denies petition from Pinnacle Housing Group
Pinnacle will still receive previously approved funding for five projects
UPDATED, 5:45 p.m., Aug. 17: The Third District Court of Appeal unanimously denied a petition from Pinnacle Housing Group on Wednesday, yet the developer will receive previously approved funding.
The petition was denied after Florida Housing Finance Corp. amended the suspension order to exclude the five previously approved projects, allowing them to move forward.
An affiliate of the affordable housing developer admitted earlier this year to inflating costs for four projects, including two in Miami-Dade County and one in Broward County.
After the petition was filed, Florida Housing agreed to allow the five projects to proceed. Pinnacle attorney Alan Rosenthal said the court’s decision was not surprising given Florida Housing’s change of position on the five projects.
In its petition, Pinnacle also challenged the constitutionality of the rule allowing the suspension without due process. However, Third DCA Judge Thomas Logue wrote in the decision that a “process that allowed a suspension only after a full trial and hearing would create a substantial risk that the party might embezzle more money in the interim,” the Daily Business Review reported.
Pinnacle’s affiliate DAXC had agreed to pay $5.2 million back to the federal government, which includes a $1 million penalty, as part of a deferred prosecution agreement. Between 2009 and 2011, DAXC, a shell construction subcontractor, “was set up to inflate the cost of four low-income housing contracts and obtain federal funds that ultimately went for the personal benefit of five individuals associated with DAXC and its affiliates,” according to the statement in the agreement.
The money benefited Pinnacle principals David Deutch, Louis Wolfson III, Mitchell Friedman and Michael Wohl, and DAXC principal Felix Braverman, prosecutors previously said. [Daily Business Review] – Katherine Kallergis
An earlier version of this story incorrectly stated that Pinnacle was banned from receiving previously approved funds for five projects.