Find Fraud
by Abbey Marie Miller
The empty lot on the corner of Hubbard and High that once represented a new chapter in the lives of Mark McGuire and husband Timothy O’Neill, now represents a loss of faith in the gay community.
McGuire and O’Neill say they never got the “urban oasis” that Apex Realty LLC promised them when they paid the $16,500 deposit on their condo in the 11-story Ibiza building. Instead, Franklin County court documents show they got a legal battle.
“We lived in the German Village for 20 years, and we wanted to be done fixing things in an old house,” said O’Neill.
Financially stable, and looking for a change, the couple started looking for a new home that suited both of them. They found it in Ibiza.
“We liked it, and we could afford it,” said O’Neill.
The Ibiza project was the brainchild of Apex Realty LLC. According to the Ohio Secretary of State website, Apex Realty principals, Michael Council, Raymond Brown and Rajesh Lahoti are also principals in Columbus based companies and bars such as Roy G. Biv Corporation, Union Station Foundation, Bounce LLC, Bounce Properties LLC, Havana, FindFred LLC, and Axis.
Apex Realty is an affiliate of Arms Properties, which according to armsproperties.com is responsible for developing the Dakota, Parke Condominiums and Unioncafe.
“We knew about the other businesses they had, and that they were successful, so we thought it was a safe bet and put a deposit down.” O’Neill said.
In April of 2008, the men paid a deposit of $16,500, and put their German Village home on the market to prepare for the move to Ibiza.
“We sold our house in one of the most down markets,” said McGuire. “And we didn’t get what we wanted out of it.”
Meanwhile, McGuire and O’Neill started to hear murmurs that their “urban oasis” was more like a mirage. No construction had been done on the property, and people were beginning to talk.
“At first we thought people were just being negative. But we kept getting deadlines, and as each one passed we heard from (Ibiza representatives) less and less,” said O’Neill. “When we did hear from them we would get excuses for why they weren’t building, like zoning issues, tax abatement, moving utilities. They made sense, but we thought, “You’ve built condos before; didn’t you plan for this stuff?’”
With their house sold, and no visible construction done at Ibiza, the couple leased a temporary apartment.
In January of 2010 Arms Properties abandoned the condo idea, and was looking for a partner to develop apartments.
“We really got suspicious when the email addresses changed,” said McGuire. “Everything had always been sent from ‘so and so at ibizaonhigh.com,’ then they started coming from other addresses.”
“We didn’t want to live in an apartment; we were already living in an apartment. So we asked for our money back,” said O’Neill. “That ‘s when the dancing began. They basically told us to go ahead and sue them, because they didn’t have any money.”
“That attitude sent us over the edge,” said McGuire.
Attorney Brian Laliberte is representing the couple, as well as several others, in a case against Apex Realty LLC to recover their deposits. According to Laliberte, a forensic accountant was hired to follow the flow of money as it came in, and went out of Apex.
“The money looks like it went from Apex, to RWRM, to Roy G. Biv and then dispersed to the other various companies. It looked like they were taking deposits and using it to promote Ibiza, hoping the money would backfill as more people signed on,” Laliberte said. “They were taking money in the front door, and then pushing it out the back door thinking no one would be any the wiser.”
According to Laliberte, the contract signed by McGuire, O’Neill and the others prohibits the use of deposit money on anything but construction costs. It does not cover any advertising or promoting.
“They just acted like they had a free pass,” said McGuire. “Or like they are entitled.”
In June 2010, a packet from the principals was sent to every person who had put down a deposit for a condo at Ibiza.
“It said if all 60-plus of us dropped any case we might have, they would give us our money back,” said McGuire. “But all of us had to drop everything.”
“We thought, ‘but this money is already rightfully ours,’” said O’Neill. “But it was like you didn’t want to be the one to keep someone else from getting their money, so it was almost as if they wanted to get us to start fighting amongst ourselves.”
Laliberte believes this move, along with filing for bankruptcy was part of a strategy to delay the cases, and buy more time.
According to Franklin county court documents, Apex filed for Chapter 11 bankruptcy in April 2011, listing “$10 to $50 million in liabilities, and assets less than $10 million.”
“They filed for bankruptcy the day before I was supposed to get them to give depositions,” said Laliberte.
“By the time they filed bankruptcy it was like, ‘of course they did,’” said McGuire.
Because all the affiliated businesses ran by Council, Lahoti and Brown are separate entities, only the Apex Realty LLC would be protected under their bankruptcy file. Laliberte planned to go after the separate affiliated companies to get his clients’ deposits, until Aug. 11, 2011, when a judgment put in by Judge Charles Schneider immediately ruled that Havana LTD, Roy G. Biv Corp., Bounce LLC, Brown, and Lahoti pay J.P Morgan Chase bank a collective sum of $1.3 million for unpaid promissory notes.
“I have no idea if those companies have that much,” said Laliberte. “But $1.3 million is a hell of a lot of money.”
For McGuire and O’Neill, the worst part of this rollercoaster isn’t the lost $16,500, but the lost faith in the community they were once trying to support.
“We went into this thinking that we were supporting the Short North and the Gay Community, we felt like we were at a place in life financially where we could put money back in,” said McGuire. “A big part of the appeal for moving there was putting money back into the community.”
“We would hear that our project had a problem, and then some of the people involved would be observed in the community just spending money, buying shots and whatnot. I wanted them to tell me they felt bad,” said O’Neill. “We are being made to feel bad for wanting our money back.”
According to Laliberte, the principals have threatened to pursue defamation lawsuits to anyone willing to talk publicly about the case.
“They have done everything in their power to quiet anyone coming forward,” Laliberte said. “They are trying to bully people into remaining silent. It’s their M.O.”
“We are not the people who want to bring out torches.” McGuire and O’Neill aren’t the only ones that say they have been silenced by the principals at Apex.
Council was awarded a protection suit against a man who claims to have emails from Council, allegedly threatening to out the man to his parents.
“People have used the term ‘gay mafia’ (to describe them) before,” said O’Neill.
“The worst part is, we miss going to Union with our friends,” said McGuire. “We really liked going there, but we just can’t justify spending money at that bar anymore.”
To some members of the gay community, Union and the other bars owned by Lahoti, Council and Brown are more than just local watering holes.
“Those bars stay open 365 days a year for people who couldn’t go home to their families because they weren’t accepted,” said former General Manager of Havana, Nicole Simmons. “Those holidays were some of the best those people ever had.”
“A lot of people have complaints towards them, myself included, but they helped create solidarity between the Short North bars,” she said. “They created a safe haven.”
According to Laliberte, the safe havens in the Short North owned by Lahoti, Council and Brown are all heavily leveraged collateral for loans, and the August judgment in favor of J.P Morgan Chase could make their future unclear.
Simmons believes that the gay community in the Short North would survive, even if the bars that helped bring them to the area closed.
“If (those bars) didn’t exist any longer, I think other bars in the Short North would absorb them,” she said. “Because of the community (Lahoti, Council, Brown and their bars) created makes it so it isn’t necessary for the gays to go only to their bars. It’s more about the area now, not who you’re sleeping with.”
As it stands, Laliberte still intends to fight for his client’s deposit money, and McGuire and O’Neill have made their home elsewhere.
“The silver lining is we found something we like downtown,” said McGuire. “We were cheerleaders for the project up to the very end.”
“It would have been nice to have that (deposit) money for different things, but luckily it won’t break us,” said O’Neill. “But every time I drive past that empty pit, I swear at it under my breath.”
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