Galata Inc., a Homestead social service agency that received a no-questions-asked $500,000 county grant in 2008 to pay off a mortgage, is now seeking private donations to help pay down another loan. In January, the Miami-Dade Inspector General's Office criticized Galata officials for misusing $99,000 from the grant to pay debts to the Internal Revenue Service and other administrative expenses.
However, the Miami-Dade budget office and Galata's executive director, Joseph Louis, insisted the nonprofit group was allowed to use the grant money for expenses related to settling the mortgage. Now, Louis is desperately seeking funds so Galata doesn't lose its more than 5,000-square-foot recreational center at 916 N. Flagler Ave. in Homestead.
In an email sent to supporters March 26, Louis wrote, "Please, please we really need your financial donation to help reduce or pay off this $318,000 mortgage. Anything is better than nothing."
Though a foreclosure complaint against Galata has not been filed, Miami-Dade County Clerk records show the nonprofit agency is having some financial trouble. Last year, the IRS filed two liens against Galata for not paying $17,000 in taxes. Previously, Galata used part of its 2008 grant to pay $77,307 to the IRS. The Inspector General's Office concluded Galata was supposed to use only the $500,000 to pay off its first mortgage.
Instead, the social service agency, which serves low-income people in Homestead and Florida City, used the grant money as collateral to obtain a new mortgage that now has Louis running to donors to pay it off.
In an interview with Banana Republican earlier this month, Louis insisted he did nothing wrong. "I didn't put any money in my pockets," he said. "It all went back to Galata. I didn't misuse any funds."
Follow Francisco Alvarado on Twitter: @thefrankness
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