Loads of Dirty Laundry

Bounced checks, phony documents, multiple bankruptcies, countless lawsuits, burned business partners, and an army of avenging attorneys might discourage most entrepreneurs. But as far as Mohamed Ibrahim is concerned, it all just comes out in the wash.

Ibrahim says he's from a wealthy Alexandrian family; he moved to California as a boy, became a U.S. citizen in 1972, graduated from high school in Pasadena in 1978, and earned a bachelor's degree in electrical engineering from the University of Southern California in 1981. It's impossible to confirm the existence of the degree because Ibrahim's social security number couldn't be found by USC's transcripts and verification office. But by the late Eighties, Ibrahim was living in South Florida, along with his father and at least two of his brothers. He says he briefly attended law school at Nova University in Davie in 1991, then operated a carpet-cleaning business.

He was a leasing rep for a frozen yogurt machine company when he met Marcel Stein, then the proprietor of the popular Uptown Deli in Miami Beach, about seven years ago; his brother David operated the Latin Market on Collins Avenue across from the Uptown. In the ensuing years, Stein would sell the deli, open a laundromat in North Beach, and emerge from time to time as a player in one of Ibrahim's numerous business transactions.

Stein in fact invested in and helped find other investors for one of Ibrahim's early acquisitions, the aging 50-unit Bay Village apartments on Normandy Isle in Miami Beach. In 1992 Ibrahim bought the corporation that owned the apartment complex. But the holders of the first mortgage on the property, which was worth almost one million dollars, complained that he didn't make agreed-upon improvements or timely payments, so they initiated foreclosure proceedings the following year.

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In response, Ibrahim filed for Chapter 11 bankruptcy, which would allow protection for Bay Village, Inc. during corporate reorganization. That stopped the foreclosure, at least until U.S. Bankruptcy Judge Paul Hyman threw the bankruptcy filing out of court. But in the meantime, Ibrahim somehow had managed to secure sufficient financing to purchase the 79th Street property for his I Have a Dream strip mall.

In 1994 Ibrahim transferred ownership of the Bay Village apartment complex to a different corporation, Island Pointe Associates, renamed the apartments Island Pointe, and again filed for Chapter 11 bankruptcy under the new corporate name. Judge Hyman dismissed that filing, too, finding that it had been submitted in "bad faith" in an effort to avoid paying his creditors.

A state receiver, appointed by the court to oversee the operations of the apartments during foreclosure, became frustrated by Ibrahim's inability to produce required rent receipts and other routine business documents. The receiver, David Garfinkle, filed no fewer than four motions for contempt against Ibrahim.

Adam Winder was becoming frustrated too. Now 74 years old, Winder has led an eventful life, but he wasn't anticipating financial ruin near the end. He co-owned the Uptown Deli for several years with Marcel Stein. In November 1994 Winder was persuaded to lend $59,000 to Ibrahim (who was embroiled at the time in the Island Pointe foreclosure, though Winder claims to have been told nothing of this) for construction of the planned 79th Street I Have a Dream shopping center. There was something else Winder didn't know: The corporation that sold the 79th Street property to Ibrahim had been fighting for at least a year to collect $40,000 it was owed.

Shortly before Winder's cash infusion, another Ibrahim corporation, I Have a Dream Shopping Center, Inc., had acquired the property from Stein in the latest of a series of title handovers that had begun in June 1993, when Island Pointe Associates bought the commercial parcel and, a few days later, sold it to yet another corporation controlled by Ibrahim -- this one called Avalon Properties -- which then transferred title to Stein in April 1994.

Stein recalls owning the 79th Street property for no more than "maybe a few weeks" and says he deeded it back to Ibrahim because he'd changed his mind about getting involved in the development. He'd already witnessed Ibrahim's numerous problems with the Island Pointe apartments, though he blames overly demanding mortgage holders and previously existing code violations, not Ibrahim's management. He also says he had no qualms about recommending that his friend Winder (and others) invest in the shopping center.

Winder thinks he was deceived. "I take people's word, like in the old country," he says, referring to Poland, which he left in 1946 after escaping Nazi gas chambers by jumping out of a speeding train. "You shook hands and never felt sorry for it. Mohamed was supposed to pay me $2700 a month, but the first check bounced. I never got another check.

"Then Marcel and Mohamed started to tell me I should come in as a silent partner to [Island Pointe Associates]," he continues, referring to the company that owned the apartment complex. "That way my money would be secured. I let myself get talked into it; I gave him another $141,000, and I became a partner. They had a receiver on the building at that time, but I wasn't told. As a partner, I was supposed to know where the money was going. They said I would get a certain amount as an investor. I got absolutely nothing."

Attempting to ease Winder's alarm, Stein at one point called Ibrahim's wealthy father, Elghanam, in Vienna at the time, who assured Winder he'd be in the United States in the next few weeks and would make sure he got his money back. "He never came," Winder says. "It was one month, two months, then Mohamed comes to me and says, 'I'm going to refinance the building, so I need $16,000,' and I, like an idiot, agreed. But this time I got a little smart."

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