By Chuck Strouse
By Scott Fishman
By Terrence McCoy
By Ryan Yousefi
By Ciara LaVelle, Kat Bein, Carolina Del Busto, and Liz Tracy
By Pepe Billete
By Ryan Yousefi
By Kyle Swenson
In January 1996, Winder says, he wrote two checks totalling $16,000 but made them payable to Ibrahim's attorney, Howard Galbut, for deposit in a special escrow account -- on the condition that the money be used only for the refinancing of Island Pointe and that if the refinancing effort failed, Winder would get back $7500. If it did go through, he would get the $200,000 he'd already invested plus the $16,000, according to terms set out in a letter to Galbut from Winder's attorney, Jeffrey Feinberg.
The security measure didn't work. Winder says he handed the checks to Ibrahim, who was to carry them to Galbut. The checks were later endorsed with Galbut's signature and were cashed. There was no refinancing, but Winder never received his expected $7500. His $16,000 simply vanished.
Today Galbut insists he did not handle the refinancing plan and that none of Winder's money was ever deposited in his escrow account. "[Winder] never sent any checks to me," Galbut says. "I never signed any checks. If there are any checks out there with my name on them, it's not my signature." Ibrahim says Winder was with him when the checks were deposited. Winder denies that. Attorneys for both men say a settlement is near. Meanwhile, the Miami Beach Police Department is investigating.
"That $200,000 was my life savings!" exclaims Winder, a trim gray-haired man who has had to go back to work as a kosher butcher and has retained a lawyer to go after his money, despite an almost complete lack of documentation of the loans. "Mohamed is a thief, in plain English. He needs to be run out of the country. I'll be honest with you -- sometimes I want to kill him after what that son of a bitch put us through."
Marcel Stein contends Winder's anger is misplaced. "Mohamed lost more money than anyone," he says. "It's a lotto when you're in business. You play, and if you win, you win. If you don't, it's rough."
Stein, who didn't lose as much in the deal, says he's doing fine with his own laundromat, a large but somewhat ragged space on a North Beach side street. The former partners have little to say to each other these days.
Island Pointe Associates filed for Chapter 11 again in May 1996, four and a half months after Winder loaned the $16,000 for refinancing. This time the court accepted the filing. As is usual in such corporate reorganizations, Ibrahim continued to operate the business under strict court-ordered guidelines, as Debtor in Possession (DIP).
One of the requirements was that the DIP place all rent monies and security deposits into a court-supervised bank account. According to a motion filed in November 1996 before U.S. Bankruptcy Judge Steven Friedman by Hollywood attorney Scott Orth, representing one of the mortgage holders, Ibrahim had been collecting rents of about $25,000 per month for three months. "Nevertheless," states the motion, "the Debtor's 'DIP' account contains less than $15,000!"
Ibrahim had never produced any documents to show how much money he'd collected or deposited, according to Orth's motion, nor had he paid any of the mortgage holders as required. So Judge Friedman converted the Chapter 11 to a Chapter 7 bankruptcy -- meaning all the corporation's assets would be sold to pay creditors -- and he appointed a trustee to take over operation of the apartments. (A trustee is appointed in a federal bankruptcy, whereas a state-appointed receiver oversees foreclosures.)
Miami attorney Joel Tabas, the trustee, immediately called Capital Bank to freeze the DIP account. But for some reason the account was allowed to remain open for at least three more days, during which time Ibrahim withdrew thousands of dollars from the account. Tabas ultimately sued Capital Bank and recovered $12,500. But after just one month he resigned from his trusteeship, noting that the apartments were in dangerously bad repair and that selling them would not even cover the claims of the secured creditors.
In effect, Tabas "abandoned" the property, and so the state foreclosure action continued toward its conclusion -- the auction of the property with proceeds going to the mortgage holders. Before the auction, however, Ibrahim sold the apartments. That wasn't illegal, as he still technically owned them, but the Miami entrepreneur who bought the apartments from him apparently wasn't aware that the property was so heavily encumbered. When that woman was unable to satisfy the creditors, the auction proceeded -- but she got none of the money.
At the auction this past August the apartments were purchased by a partnership of investors who had once loaned money to the property's former owner, Randee Sallee, a Miami Beach businesswoman. After selling to Ibrahim, Sallee wound up holding the second mortgage. Sallee says she was ruined in a tortuous series of events stemming from Ibrahim's default on the million-dollar first mortgage and ensuing years of bankruptcies, receivers, frozen bank accounts, foreclosure, and almost monthly crises with insurance coverage, building code violations, and other money-drainers. "It's not all [Ibrahim's] fault," Sallee says. But she is quick to add: "I know a lot of people who would stand in line to serve Mohamed lunch in jail."
Tabas, at the behest of the U.S. Trustee's Office, had undertaken an investigation of allegations by Sallee and other creditors that Ibrahim had diverted revenues from the Island Pointe apartments to the I Have a Dream shopping center. The attorney in Tabas's office who recently concluded the investigation is doubtful she'll prove anything, largely because Ibrahim simply creates no paper trail.