South Florida-based Ponzi scheme dupes investors out of Costa Rican real estate
In 2005, Dallas resident Richard Silverman returned from vacation in Costa Rica convinced the Central American paradise was a perfect spot for a second home.
So after searching online, Silverman discovered something called Paragon Properties of Costa Rica. Its website was chock full of Sims-quality computer renderings of elegant villas, available for the bargain rate of $60 per square foot. There was glowing testimonial and a photo of the project's grinning chairman, "Columbia-educated" "world traveler" Bill Gale, a burly, bearded Miamian stuffed into Rochester Big & Tall pinstripes, appearing ready to assure you he can defecate diamonds at will.
A sales associate explained to Silverman the can't-lose proposition over the phone: Pay a $25,000 deposit, go to Costa Rica to check out the plot, and if you're unhappy, receive a full refund.
You know where this is going.
The development is still unfinished, and upward of 900 gullible souls haven't gotten their deposits back, says Matthew Sarelson, the Brickell attorney who filed a class-action lawsuit against Paragon earlier this year. It was a "classic Ponzi scheme," with the scam's operators paying back old investors with new investments until the money ran out. Total loss, in Sarelson's "rough estimate": $50 million.
"Most of the victims were older Middle Americans who were not wealthy," Sarelson says. "Most of them are going to have their retirements ruined because of this."
The outfit, based out of a boiler room in Hollywood, hasn't responded to the suit. Paragon's suspected principals read like a South Florida all-star grifter team: Gale, apparently involved in Lehigh Acres, the lucrative Fort Myers development so badly planned that the county declared it blighted; Stephen Tashman, ordered by the Federal Trade Commission to pay $12 million for a fraudulent calling card scheme in the '80s; and Lyle Wexler and Larry Webman, sued in 2005 for illegal currency trading.
Riptide knocked on the door of Gale's four-bedroom Aventura-area home, stocked with twin black Lexus four-doors in the carport, but was rebuffed by a single word: "Bye."
Jilted Texan Richardson knows his money is likely gone, but he's hoping Gale et al. will be prosecuted. See, he's a big fan of American Greed, the television series about corporate piracy: "I want to see the guy on TV. That's the only satisfaction I'll get out of this thing."
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