WEST PALM BEACH, Fla. (CN) - Investors claim a Florida lawyer-turned-felon and his cohorts bilked them out of their savings twice over using a Belizean real estate scheme.
The investors, sixteen all told, sued ex-attorney Kenneth Dunn and his associates in Palm Beach County Court for allegedly duping them into financing Dreamscapes, a residential development project in Belize.
They claim the money they contributed to the project was siphoned off to "fund [the] personal lifestyles" of Dunn, project head Cliff Goodrich, and Dreamscapes officer Colm King, all of whom are named as defendants.
According to the lawsuit, the grift began after the investors requested information about Dreamscapes on a website and were contacted by Dreamscapes' agents.
The Dreamscapes marketing team, at the direction of Dunn and Goodrich, told the investors the project would turn Goodrich's plot of undeveloped Belizean land into a residential complex with a police and fire station, marina, club house and golf course, the lawsuit claims.
From 2009 to 2012, the investors purportedly made their initial contributions to the project, purchasing vacant lots from Dreamscapes, priced from $20,000 to $30,000 on average.
Goodrich was Dreamscapes' director through that period, and he, along with his marketing employees, were the investors' primary contact, the lawsuit says.
Dunn meanwhile was wrapped up in a Federal Bureau of Investigation racketeering case unrelated to Dreamscapes. He was arrested during a 2009 FBI sting operation and was sentenced to 43 months of jail time on charges that he aided in money laundering and other misdeeds by criminals with New York mob ties.
A few days before the indictment, he was voluntarily disbarred for violating the terms of a Florida Supreme Court suspension order against him.
In early 2012, after Dunn finished his prison sentence on the racketeering charges, he and Goodrich allegedly began calling the Dreamscapes investors for more money. According to the investors' lawsuit, the duo convinced them to contribute another $400,000, cumulatively, for the supposed purpose of constructing homes on the vacant lots in Belize.
Dunn, Goodrich and their Dreamscapes associates knew that "there was no way that Dreamscapes of Belize would be able to pay for the construction of each model home even assuming that the proper permits could be obtained," the lawsuit claims.
They had used the proceeds from lot sales to "generally fund their personal lifestyles," and as a result Dreamscapes did not have money left to develop the site, the lawsuit alleges.
One financial statement "indicated that Mr. Goodrich diverted corporate assets to support his lavish lifestyle in an amount exceeding 2.7 million dollars," the lawsuit claims.
Thomas Dougherty, a Dreamscapes attorney who is also named as a defendant, provided a statement to Courthouse News, calling the lawsuit "fraught with fabricated claims of fraud and conspiracies."
"All of the claims outside of our temporary inability to timely honor certain commitments are completely false," the statement reads.
Oasis Communities Inc. has taken control of the project and Colm King, its CEO, "financed or personally guaranteed nearly one million dollars toward the project's success," according to the statement.
"As Oasis has told each of the Plaintiffs, their contracts will be satisfied," the statement reads.
"In the end, the attorney's fees in this matter will only further present significant expenses to the plaintiffs and the defendants which would otherwise be used to move the project forward," the statement continues.
The statement also argues that the plaintiffs "represent a minute fraction of the property owners," in spite of their "aggressive solicitation" of others to join their lawsuit.
"They have decided to resort to litigation rather than support the project," the statement reads.
The plaintiffs, as listed in the body of the complaint, are Charles D. McLain, Cynthia McLain, Thaddaeus Akins, Rochelle Akins, Jerry Rugh, Anita Rugh, Edmund Nagle, Joyce Nagle, Rajaish Sookoo, Thomas Pescuma, Andre Glenn, Lavern Glenn, Thomas Owen, Sandra Owen, Frank Quin and Annette Quin.
Corporate defendants in the lawsuit include Dreamscapes International Properties, Oasis Communities, and Dreamscapes Properties Ltd., a company registered in Belize.
According to the complaint, many investors were entitled to shares in Dreamscapes International Properties, but in the summer of 2014, company management, including King, Dougherty, and Dunn, voided that stock pursuant to a restructuring with Oasis Communities.
With regard to the site in Belize, the most recent records from the Belizean Department of the Environment's website date back to 2011. They show that Dreamscapes Properties Ltd. entered into an environmental compliance plan for the as-yet unbuilt property. The documents describe a multidivision country club community sprawling across several hundred acres near the Mullins River, in the Stann Creek District of Belize.
Marco Gallo, the CEO of Big Bear Developers, told Courthouse News that he was at the Dreamscapes site last summer after he was hired to do development work there.
He said that roadways to the site had been built, but that the site was otherwise bare.
"Not a slab had been laid," Gallo said.
"Before you even sell a lot, you do have to do a lot of ground work . . . topography, surveying. That was never done here," Gallo said. "The mistake they made from the beginning is that they sold these lots but never escrowed the money."
Gallo said that some of the lot owners with whom he spoke were surprised to find that they may need to contribute tens of thousands of dollars more before their properties had access to utilities.
"Three hundred lots were sold, and there was not a penny to show for it," Gallo claimed.
Dreamscapes management made a "great effort to raise capital" but new funding for the project was ultimately unavailable, and Gallo's company stopped work last year, Gallo said.
Neither Gallo nor Big Bear Developers is a defendant in the Dreamscapes lawsuit.
The complaint briefly mentions Big Bear: It claims that under Big Bear's agreement with Oasis, Oasis "has given up an equity interest in itself or assets that belonged to Dreamscapes without Oasis being legally able to enter into such [a] transaction."
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