FTC halts alleged website scheme tied to developer Bob Zangrillo

The court ruled that the “the websites were patently misleading”

Feb.February 05, 2020 04:30 PM
Bob Zangrillo and the Magic City Innovation District

Bob Zangrillo and the Magic City Innovation District

A federal court struck a blow to a web of companies tied to Miami real estate developer Bob Zangrillo that allegedly deceived people into thinking they were government websites.

The U.S. District Court in Florida granted the Federal Trade Commission a preliminary injunction to halt a scheme that promised government services such as renewing a driver’s licenses or help with public housing. Instead, the websites offered consumers who completed a transaction a document of “general, publicly available information about the service the consumer sought for a fee,” according to the FTC’s complaint.

The court ruled that the “the websites were patently misleading,” the FTC announced on Friday. The injunction, granted in mid-January, froze assets tied to the scheme.

The complaint names Burton Katz, Brent Levison, Arlene Mahon, and Elisha Rothman, as well as Zangrillo, and more than 50 companies they own and control, as defendants.

The FTC alleges that Zangrillo, a lead developer in the Magic City Innovation project in Little Haiti, was an investor, chaired and co-owned one of the companies involved, On Point Global.

Zangrillo’s lawyers, however, claim that Zangrillo was not engaged in the day-to-day operations of On Point Global.

“As we have said all along, the case against Robert Zangrillo and Dragon Global has been misguided from the start,” said Zangrillo’s attorney Matthew Schwartz of Boies Schiller Flexner, in a statement. “In his role as an investor and limited partner in numerous organizations, Mr. Zangrillo monitors his investments under his companies’ investor rights but has no role in the day-to-day operations of his portfolio companies.”

The FTC’s complaint alleges Zangrillo also acquired space for On Point Global’s second Miami office at 350 Northeast 60th Street and alleges that On Point and Zangrillo’s Dragon Global shared offices. Zangrillo’s lawyers deny they shared office.

Zangrillo is the founder of the venture capital firm Dragon Global and made his money in Silicon Valley as an investor in Facebook, Twitter and Uber, according to Dragon Global’s website.

He was among those charged last year, along with actresses Felicity Huffman and Lori Loughlin, in the largest-ever college admissions scandal in the U.S. Zangrillo allegedly paid off athletic department officials at USC to designate his daughter as an athletic recruit, and had someone take classes on her behalf. He pleaded not guilty in April.

After the scandal broke, Zangrillo stepped away from the Magic City development and was replaced by developer Zachary Vella. But Instagram posts over the summer suggested that Zangrillo may still be involved in the project. Twice in August the Silicon Valley investor posted about the project on his personal Instagram account.

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