Wednesday, October 28, 2020

Former Brixmor Executives Indicted


Facelifts to two commercial properties will occur over the next year or more on Marco Island as the Marco Town Center and the Shops of Marco will be undergoing major construction. However, the former executives of one of these properties are undergoing some problems beyond that of a facelift.

Marco Town Center, owned by Brixmor Property Group and located at the corner of North Collier Boulevard and Bald Eagle Drive, is one of the oldest such developments on the island. The work on the plaza has been anticipated for the last two years and has been a focus of criticism by members of Marco Island City Council who felt the owners of the plaza have not given their property appropriate attention.

Improvements in parking, drainage, landscaping and general aesthetics have been a major component of the proposed work. Parking has been a major issue and at least one proposal for expanding restaurant usage was rejected by the city council for that plaza, while many empty storefronts in the plaza have concerned members of the island’s business community.

The Town Center property is a REIT, or a Real Estate Investment Trust. Simply put it is a company that owns, or finances income producing real estate across a range of property types and offers a number of benefits to investors. Brixmor owns and manages several other properties in the Naples area.

Some of the delays in Brixmor’s progress moving forward may have been related to the unsealing of an indictment in the Manhattan Federal Court naming Michael Carroll and Michael Pappagatto, the former Chief Executive Officer and Chief Financial Officer for Brixmor Property Group, with fraud in August of this year.

Deputy U.S. Attorney Audrey Strauss said: “As alleged, the most senior executives at Brixmor engaged in a years-long scheme to cook the books and deceive the investing public. When executives allegedly lie to the investing public about their company’s performance and thereby harm the integrity of the market, they must be held accountable.”

Each were charged in the indictment with conspiracy to commit securities fraud and other offenses (Count One), securities fraud (Count Two), making false statements in filings with the SEC (Counts Three and Four); and filing false certifications (Counts Five and Six). The securities fraud, false filings charges, and false certification charges each carry a maximum prison term of 20 years. The charge of conspiracy carries a maximum prison term of five years.

Two other high-ranking members of Brixmor have already pleaded guilty and are awaiting sentencing. Steven Splain pleaded guilty to one count of conspiracy to commit securities fraud and making false filings with the SEC, and one count of securities fraud. Michael Mortimer pleaded guilty to one count of conspiracy to commit securities fraud and making false filings with the SEC, and one count of securities fraud.

Last week work began on the proposed facelift on the complex. Coastal Breeze News will keep you abreast of the progress and on the status of Brixmor members. 

 

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