The Pirate of Black Point

Investors say David Graham used this marina as collateral for a money-making scheme. Too bad it belongs to Dade County

Pezoldt's concerns proved accurate.
On November 3, 1995, County Manager Armando Vidal wrote to Behrendt threatening to terminate the lease in fourteen days unless the company came up with $86,644.60 in unpaid utility bills, late fees, back rent, and bounced check charges. He also cited MMI for failing to make promised improvements at the marina, establish various bonds and insurance, or submit progress reports to the county for approval; and for failing to identify who its managers were and to submit monthly or annual CPA reports of gross receipts or marketing expenditures.

Vidal also said he was disturbed that MMI seemed to have undertaken an "unauthorized assignment [of the lease] to YS Marketing and perhaps to other entities to operate at the facility without county approval."

Graham wrote back on November 7 disputing some of Vidal's contentions and promising to correct acknowledged problems. Specifically, he said a performance bond -- designed to protect the public against unpaid obligations -- would be ready "by the end of the week."

On November 15, 1995, yet another county official wrote to Behrendt threatening to evict MMI from Black Point because of unpaid rent and state taxes, and the lack of the $96,000 performance bond.

The performance bond -- a recurring subject of warning letters from the county -- seemed to have a life of its own.

On April 11, 1996, Bud Daniels, then the chief of the park department's contract management section, wrote to Philadelphia-based Reliance Surety Company explaining that MMI was in default of its county lease to the tune of $93,626 in unpaid rent and $6085 in unpaid Florida sales taxes. Daniels reminded Reliance that it had signed a $96,000 bond with MMI on November 17, 1995, the purpose of which was to protect the county and the public against MMI's not paying its bills. Since the amount MMI owed now exceeded the amount of the bond, Daniels demanded that Reliance cough up the money.

On April 17, Reliance general counsel Frank Hucks called Daniels with some alarming news: The company claimed it was unaware it had ever approved a $96,000 bond for MMI. The bond Daniels had in his possession was never authorized by Reliance. "It is also obvious that the bond is improperly executed because the principal did not execute the bond at all, and someone purporting to have the power of attorney of Reliance Surety Company executed in the location where the principal should have executed the bond," Hucks wrote in a follow-up letter two days later. In other words, the signatures on the bond were in the wrong place, unknown to the bonding company, and completely invalid.

A close examination of the bond shows that it was witnessed by David Graham and Jay Kushner. No one from MMI signed the document in the space provided for a company representative; instead, the name of a Pompano Beach insurance agent, Daniel Gordon, appeared there. And the space provided for signatories from the surety company was a glaring blank.

In an April 18 letter to Hucks, Daniels noted that "your comment that the surety bond guaranteeing payments of our tenant, Marine Management, Inc., upon which we have relied, may be fraudulent is disturbing."

On April 16, five days after Daniels had first written to Reliance to cash in the MMI performance bond, the county received a $91,000 payment from MMI covering most of its debt. Once again, the operator of Black Point Marina had successfully forestalled eviction, and the county was willing to hope for the best.

Meanwhile, Graham was running into problems of a different sort. Investigators for the Florida Bar had begun to scrutinize his professional ethics, not for the first time. Records show that on September 21, 1984, Graham received a private reprimand from the Bar for minor misconduct stemming from a probate case. In 1973 he had been hired by a woman named Opal May Schreiber to help administer the estate of her husband. Seven years later a judge ordered Graham to hurry up and close the administration of the estate. The court repeated its demand in 1982 and 1983, but Graham didn't comply until early 1984.

"Your actions have discredited your entire profession," wrote Bar then-president Gerald F. Richman at the time of the reprimand. (By coincidence, Richman would later be drawn into the Black Point case, representing Graham's son.)

Now the Bar began a more serious investigation of Graham, alleging he had misappropriated and "converted to his own purposes" $265,000 from clients' trust accounts related to the Pirate's Point deal. On March 5 the Florida Supreme Court issued an emergency order suspending Graham's law license; on July 10 last year he became one of the 60 Florida attorneys in 1996 who lost their license to practice law.

In his case it occurred through a mechanism known as "disciplinary resignation." Facing disbarment, Graham was allowed to voluntarily resign his membership in the Florida Bar. "It allows the attorney to save some face, and it allows us to avoid the time and expense of a trial," notes John A. Boggs, director of lawyer regulation for the Florida Bar.

In considering two of the four complaints lodged against Graham, the Bar pointed out that in similar cases involving misuse of client funds, disbarment has been the typical sanction -- even in the event that money is paid back and the client is unharmed. "This Court has consistently held that misuse of trust account funds is among the most serious infractions a lawyer can commit." The trial counsel's recommendation to the board of governors: "Accept the resignation. It is the functional equivalent of disbarment."

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