United States District Court, M.D. Florida, Fort Myers Division
CONTINENTAL 332 FUND, LLC, CONTINENTAL 298 FUND LLC, CONTINENTAL 306 FUND LLC, CONTINENTAL 326 FUND LLC, CONTINENTAL 347 FUND LLC, CONTINENTAL 355 FUND LLC, CONTINENTAL 342 FUND LLC and CONTINENTAL 245 FUND LLC, Plaintiffs,
DAVID ALBERTELLI, ALBERTELLI CONSTRUCTION INC., WESTCORE CONSTRUCTION, LLC, NATIONAL FRAMING, LLC, MFDC, LLC, TEAM CCR, LLC, BROOK KOZLOWSKI, JOHN SALAT, KEVIN BURKE, KERRY HELTZEL, AMY BUTLER, U.S. CONSTRUCTION TRUST, FOUNDATION MANAGEMENT, LLC, KMM CONSTRUCTION, LLC, WESTCORE CONSTRUCTION, L.L.C. and GEORGE ALBERTELLI, Defendants.
OPINION AND ORDER 
Polster Chappell, Judge
matter comes before the Court on motions to dismiss filed by
Defendants David Albertelli (“David”) and
Albertelli Construction, Inc. (“ACI”) (Doc. 130),
George Albertelli (“George”) (Doc. 135), Amy
Butler (“Butler”) (Doc. 136), Kevin Burke
(“Burke”), Foundation Management, LLC
(“Foundation”), Kerry Heltzel
(“Heltzel”), KMM Construction, LLC
(“KMM”), Brook Kozlowski
(“Kozlowski”), National Framing, LLC
(“National”), John Salat (“Salat”),
Team CCR, LLC, U.S. Construction Trust, Westcore
Construction, LLC (“Westcore I”), and Westcore
Construction L.L.C. (“Westcore II”) (Doc. 137),
and a Motion for Joinder filed by David and ACI (Doc. 138).
Plaintiffs responded in opposition on May 9, 2018. (Doc.
143). This matter is ripe for review.
case concerns an alleged pattern of fraud committed by a
group of interrelated individuals and corporations on
apartment construction projects around the country.
Plaintiffs are funds created to bankroll the apartment
construction projects. (Doc. 117 at ¶¶ 16(a)-(h)).
They are managed by Continental Properties
(“Continental”). (Doc. 117 at ¶¶ 3,
17). Defendants George Albertelli and his son David
Albertelli (collectively, the
“Albertellis”) own ACI, which is a commercial
construction company. (Doc. 117 at ¶ 1, 18). George also
has an ownership interest in MFDC, a shell company. (Doc. 117
at ¶ 19, 24). David controls or owns
• Foundation, a shell company;
• KMM, a subcontracting company;
• National, a subcontracting company;
• Team CCR, LLC, a subcontractor;
• Westcore I, a general contractor; and
• Westcore II, a shell company.
(Doc. 117 at ¶ 820, 121, 134-35, 153). David is also the
trustee and beneficiary of U.S. Construction, which owns part
of Westcore I. (Doc. 117 at ¶ 20).
Kozlowski is an officer and owner of ACI, Foundation,
Westcore I, and Westcore II. (Doc. 117 at ¶ 21). Amy
Butler was or is ACI's accounting manager. (Doc. 117 at
¶ 26). Kevin Burke is the Chief Financial Officer and
agent of Foundation, and an agent of MFDC and Westcore II.
(Doc. 117 ¶ at 27). Kerry Heltzel was or is an
accountant for ACI, Westcore I, Westcore II, and Foundation.
(Doc. 117 at ¶ 29). John Salat was or is an officer of
Westcore I, has represented that he is Westcore I's
owner, and is an owner of Westcore II. (Doc. 117 at ¶
28). Angelo Eguizabal (“Eguizabal”) is the former
Vice President of Construction at Continental, and the
creator and owner of Bravo 21, LLC (“Bravo 21”),
a shell corporation. (Doc. 117 at ¶¶ 34-35).
2011 to 2017, Albertelli-affiliated companies were awarded
over $200, 000, 000.00 in apartment construction contracts,
• An August 22, 2013, contract between Plaintiff
Continental 245 Fund LLC (the “Lexington Fund”)
and ACI for a project in Lexington, Kentucky (the
• On April 25, 2014, contract between Plaintiff
Continental 298 Fund LLC (the “Savage Fund”) and
ACI for a project in Savage, Minnesota (the “Savage
• A November 21, 2014, contract between Plaintiff
Continental 306 Fund LLC (the “New Braunfels
Fund”) and ACI for a project in New Braunfels, Texas
(the “New Braunfels Project”);
• A February 20, 2015, contract between Plaintiff
Continental 332 Fund, LLC (the “Fort Myers Fund”)
and ACI for a project in Fort Myers, Florida (the “Fort
• A June 23, 2015, contract between Plaintiff
Continental 326 Fund LLC (the “Rochester Fund”)
and ACI for a project in Rochester, Minnesota (the
• A January 19, 2016, contract between Plaintiff
Continental 355 Fund LLC (the “Bryan Fund”) and
Westcore I for a project in Bryan, Texas (the “Bryan
• A February 19, 2016, contract between Plaintiff
Continental 347 Fund LLC (the “Waco Fund”) and
Wesctore I for a project in Waco, Texas (the “Waco
• A July 16, 2016 contract between Plaintiff Continental
342 Fund LLC (the “Longmont Fund”) and Westcore I
for a project in Longmont, Colorado (the “Longmont
(Doc. 117 at ¶¶ 14, 44(a)-(h)). Each Project was
allegedly completed defectively. (Doc. 117 at ¶¶
securing and undertaking the Projects, Defendants allegedly
engaged in a wide swath of intentionally fraudulent activity
(the “Scheme”) “designed to extract as much
money as [they] could, as quickly as [they] could, without
regard to contractual performance or any lawful right to
payment.” (Doc. 117 at ¶ 52-53). Because it is
alleged the Scheme was carried out by a bevy of Defendants,
on eight Projects, and over the course of six years, the
Court summarizes the facts according to the type of actions
in 2014, the Albertellis purportedly paid Eguizabal to
provide them with internal Continental information and to
persuade Continental to award construction contracts to
Albertelli-affiliated entities. (Doc. 117 at ¶¶ 14,
75, 80). From May 2013 to May 2014, the Albertellis used a
third-party company to transfer at least thirteen payments
totaling $244, 724.20 to Eguizabal's bank account. (Doc.
117 at 66). During this time, the Lexington and Savage
Projects were awarded to ACI. (Doc. 117 at ¶¶
from July 2014 to August 2016, the Albertellis, Burke, and
Kozlowski formed MFDC as a shell company, and the Albertellis
and ACI used it to funnel at least $669, 302.00 to Eguizabal.
(Doc. 117 at ¶¶ 67-8). During this stretch,
Continental awarded the New Braunfels, Fort Myers, Rochester,
Bryan, Waco and Longmont Projects to ACI and Westcore I.
(Doc. 117 at ¶¶ 44(c)-(h)). In May 2016, Eguizabal
also formed his own company, Bravo21, to receive payments.
(Doc. 117 at 69). The Albertellis, ACI, MFDC, Burke and
Kozlowski then occasionally sent Eguizabal's payments to
Bravo21, amounting to at least $50, 000.00. (Doc. 117 at 69).
the payments became so commonplace that David, Kozlowski and
Salat included a line item for Eguizabal on the Waco, Bryan
and Longmont Projects. (Doc. 117 at 69-70). In total, over
$1, 464, 735.00 was funneled to Eguizabal from 2011 to 2017,
which was financed through misrepresentation of costs on the
Projects, including amounts due to subcontractors. (Doc. 117
at ¶¶ 14, 75, 78).
Other Albertelli Entities
ACI entered into a number of contracts with Continental, it
performed its duties poorly and deliver Projects late. (Doc.
117 at ¶¶ 7, 44(a)-(e)). As a result, Continental
internally decided to avoid awarding future contracts to ACI.
(Doc. 117 at ¶ 7). To continue seeking Continental
contracts, David convinced his acquaintance Gregory Hilz to
form a general contracting company called Westcore I. (Doc.
117 at ¶¶ 8, 22, 89, 91). David and Hilz agreed to
joint ownership of Westcore I, but David concealed his
ownership and control. (Doc. 117 at ¶¶ 86-87, 89).
David later stated that Westcore I would be funded by
including an extra $240, 000.00 in the price of the Fort
Myers Project. (Doc. 117 at ¶ 88).
then invented a fictitious business history for Westcore I to
bolster its chances of securing additional Continental
contracts. (Doc. 117 at ¶¶ 8, 92). This included
falsifying a sworn qualification statement with Hilz and
Kozlowski, which was submitted in November 2015. (Doc. 117 at
¶¶ 8, 93, 101). Among the allegedly false
• A statement in the Qualification Statement that
Westcore I was formed in 1992, even though it was formed in
• A statement in the Qualification Statement that
Westcore I performed an average of $376, 196, 476 worth of
work over the previous five years, even though it had existed
for less than two months at the time;
• A certification by Westcore I's Chief Financial
Officer, Michael Breaton, that the facts in the Qualification
Statement were true, even though Michael Breaton does not
• A financial statement representing Westcore I had
total assets of more than $69, 000, 000.00;
• A letter from a surety representing Westcore I had a
bonding capacity of $325, 000, 000.
(Doc. 117 at ¶¶ 85, 97-99). Westcore I was then
granted the Bryan, Waco and Longmont Projects. (Doc. 117 at
Westcore I began to secure construction contracts, David,
Salat, Kozlowski, Burke, and Foundation formed Westcore II.
(Doc. 117 at ¶¶ 138-39). Westcore II (Westcore
Construction, L.L.C.) is very similar in name to Westcore I
(Westcore Construction, LLC). (Doc. 117 at 5). Plaintiffs
allege David, Salat, Kozlowski, Burke, Heltzel, and
Foundation used the nearly identical names to mislead
Continental and direct it to make payments to Westcore II
(instead of Westcore I) for the Waco, Bryan, and Longmont
Projects. (Doc. 117 at ¶¶ 140-144). The diversion
of payments from Westcore I eventually resulted in
subcontractors imposing more than $8, 000, 000.00 in liens on
the Projects. (Doc. 117 at ¶¶ 145-46).
ACI's Savage Project Change Order
early 2015, the Savage Project fell behind schedule and ACI
was subjected to contractually-mandated liquidated damages.
(Doc. 117 at ¶ 113). The parties then agreed to a change
order where ACI accepted responsibility for $401, 780.00 in
liquidated damages in return for an extension of the
deadlines to turn over some buildings and continued progress
payments. (Doc. 117 at ¶ 114). Despite this agreement,
David, Kozlowski, and ACI later demanded that the Savage Fund
pay for ACI's alleged costs due to the delays that ACI
itself had caused. (Doc. 117 at ¶ 116). David,
Kozlowski, and ACI then attempted to leverage Savage Fund by
slowing the already-delayed Project and threatening not to
complete the work. (Doc. 117 at ¶ 117). ACI also filed a
lien on the property that included the delay-related damages
ACI had previously accepted as its responsibility. (Doc. 117
at ¶ 118). The entire process allowed ACI to obtain
extended construction deadlines and to receive payments it
would not have otherwise have received, while the Savage Fund
was forced to defend itself against the lien claim. (Doc. 117
at ¶ 120).
ACI's Involvement with National Framing on the Fort Myers
November 2016, David, on behalf of ACI, executed a payment
application for $1, 072, 397.64 for work done on the Fort
Myers Project. (Doc. 117 at ¶¶ 121, 124). Part of
the application represented National Framing was due a $60,
673.14 payment for subcontracting services, and thereafter
the balance due to it would be $364, 783.75. (Doc. 117 at
¶ 122). Notably, David owns both ACI and, through
Foundation Management, National Framing. (Doc. 117 at
¶¶ 18, 20, 31-32). The Fort Myers Fund then relied
on the application and paid ACI $1, 072, 397.64, with the
requested $60, 673.14 earmarked for National Framing. (Doc.
117 at ¶ 124). Four months after that, George signed a
Claim of Lien and an Affidavit representing National Framing
was due $581, 470.90, which was $216, ...