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One week later Boemler instructed Davis to investigate the Degraves' real estate transactions in Surfside. According to Davis's investigative report: "The concern of Chief Boemler was that possible criminal activity was taking place with the number of homes purchased by the Degraves within the jurisdiction."
Davis learned the Degraves bought their Surfside home on the Intracoastal in 1999 for $335,000. (Today the property is worth at least $1.9 million, according to the county appraiser's Website). Davis also discovered the couple had purchased 14 properties in Surfside between 2000 and 2003, flipping seven houses for a combined $725,000 profit during the same period.
"They sold some of the homes to French investors who never stepped into the U.S.," Davis explains during an interview with New Times. "Then the Degraves would manage the assets for them."
The Degraves were renting out five of the locations as week-long vacation villas through Miami Rental Management and Morgansoft Inc. Both list Brigitte Degrave as the sole corporate officer.
On November 4, 2003, posing as a tourist, Davis rented the house at 9525 Carlyle Ave. for one week. He checked out on November 10, paying $3642.50. "When I reviewed the receipts, I saw they charged me 13 percent sales tax," Davis says. "So I called the Florida Department of Revenue. They had never heard of [the Degraves'] companies.... I suspected the Degraves weren't paying their taxes."
Four months later, state revenue investigators Philip Christian and Edward Tetterton met with Davis and Boemler at the Surfside Police station, where they decided to move forward with a criminal investigation into the Degraves. In a December 12, 2006 memo to Surfside Police Chief David Allen, Davis wrote, "With regards to the possible money laundering case of approximately $7.5 million by the Degraves' shell companies ... that case has been presented by me to ICE.... Due to an investigative conflict, [it] will be forwarded away from my team."
Then came the March 2, 2004 search of the Degraves' home by Davis and state revenue agents. The officers seized the couple's computers and every document related to their real estate business and two companies. Information about the Degraves' 15 personal and business bank accounts was also subpoenaed.
After reviewing the records, the state investigators determined that Morgansoft and Miami Rental Management produced $501,347.39 in sales revenue from August 2000 to March 2004. According to a Florida Department of Revenue investigative report, the Degraves failed to pay $34,408.18 in state sales tax and $26,359.45 in resort tax money to Surfside.
As the only corporate officer for both companies, Brigitte Degrave faced a felony count of grand theft, says Bill Kostrzewski, the Miami-Dade assistant state attorney assigned to the case. Instead Kostrzewski offered a deal in which she avoided jail by pleading guilty on behalf of Morgansoft — and paying the state $45,000. She accepted. (Surfside didn't require anything of the Degraves.)
"The goal was to recoup the money," the prosecutor says. "I believe the plea deal was a fair way to resolve it." Kostrzewski adds he never detected a personal bias from Davis against the Degraves: "John is an intense guy. Whether it's a small or big case, he will see it to the end."
There might have been more to the Degraves' affairs. In a December 2, 2004 memo to his supervisor, Kostrzewski wrote, "It appears that the 13 or so Degraves properties were bought using illegal funds or funds illegally transported from France. The French have begun an investigation."
Moreover the state revenue report revealed the Degraves had deposited $7.5 million, about a third through foreign wire transfers, into their bank accounts between 2000 and 2004. During the same 43-month period, the Degraves had withdrawn $7.4 million. "Analysis of the bank accounts and corporations run by the Degraves shows monies coming in and going out immediately, without an apparent business purpose, indicating possible money laundering," Kostrzewski wrote. "IRS and the ICE Task Force has been notified."
As the state case neared conclusion in late 2006, Davis was detached to an Immigration and Customs Enforcement task force. According to an April 26, 2007 memo he wrote to Chief Allen, Davis provided his ICE supervisor, Debbie Morrissey, with a copy of the state revenue report. He claimed the agency had opened a criminal probe into the Degraves.
Morrissey declined to comment for this article. The Degraves' criminal defense attorney, Robert Amsel, says neither federal investigators nor prosecutors have contacted him about his clients in the past three years. "I am not aware of any federal investigation into the Degraves," Amsel says. "Nor have I seen any sign of one."
Davis says he also wanted to find out more about the Degraves' friend and business associate Jay Senter: "I also identified him as a possible target because one of the bank accounts [mentioned in the state revenue report] was for the company he and the Degraves were partners in."
Surfside Town Commission meetings are tame affairs, generally dominated by discussions about garbage rates and illegal home conversions. But this past August 13, a tall, slim middle-age man with penetrating blue eyes and close-cropped gray hair approached the podium. "My name is Jay Frederick Senter, and I am not going to give my address," he said. "You know I lived here for almost three years. I voted here. I am not living here anymore out of fear. In fact I was advised by the former police chief not to live here."