It appears that the shine is coming off of Democratic U.S. Senate candidate Jeff Greene as the August 24 primary nears. And just as well. Greene who is a super rich real estate investor, told the Tampa Bay Times last Friday, he was not not involved in creating the subprime mortgage mess. He claims he was simply a savvy investor who “could see that the housing market was imploding” and who made $500 million by betting against it. But not so fast.
Tampa Bay Times: At a project called La Mirage, Greene converted 1950s-era military housing from apartments to 300 condos. In the summer of 2006, just as he was starting to make his bets against the sub-prime housing market, records show that Greene’s company unloaded the units, some for as much as $165,000. The buyers turned out to be people who never intended to own the properties or pay back the loans.
Within 18 months, all of the La Mirage buyers defaulted on their loans and every condo was in foreclosure. Low-income tenants, still paying rent and unaware their apartments had been sold, found themselves on the street. Lenders recouped about $25,000 per unit when the properties went up for auction. Banks — and ultimately U.S. taxpayers who bailed out the banks — were left holding the bag on nearly $34 million of worthless paper.
Now James Delbert McConville, Greene’s counterpart in the transaction, is in jail facing criminal charges of conspiracy and money laundering stemming in part from the La Mirage transaction. The assistant U.S. attorney says the FBI is still trying to put a dollar figure on McConville’s alleged fraud, and is ramping up its investigation of the La Mirage deal.
Greene, who has already spent more than $6 million in television ads, is in a tight race with U.S. Representative Kendrick Meek for the Democratic nomination in the U.S. Senate race.
