Tamarac City Manager Michael Cernech was arrested and charged with conspiracy to commit racketeering for his alleged role in attempting to extort $3.4 million from Miami-based development firm 13th Floor Investments.
In a press release, Florida Attorney General Ashley Moody said a Florida Department of Law Enforcement investigation uncovered Cernech had assisted Bruce and Shawn Chait, a father-and-son developer duo, in their shakedown effort against 13th Floor principal Arnaud Karsenti.
In March, the Chaits and two co-conspirators were charged with nine counts, including one count each of racketeering, conspiracy to commit racketeering, organized fraud and six counts of extortion. In the 2000s, the Chaits were accused of bribing Broward County officials. The crimes are related to Tamarac housing communities that 13th Floor Homes developed on golf courses once owned by the Chaits, who are the principals of Prestige Homes of Tamarac.
13th Floor developed the 253-home Central Parc in Tamarac at 4840 Northwest 56th Court. It also recently won approval for a 397-home community on the Woodlands golf course at 4600 Woodlands Boulevard.
Cernech could not be immediately reached for comment. In an emailed statement, 13th Floor Homes, an affiliate of 13th Floor Investments, said the company was “shocked and dismayed” to learn about Cernech’s arrest.
“Our team spent years working with the Tamarac City Manager to finalize plans for activating the shuttered Woodlands Golf Course, and we always believed those efforts were in good faith,” 13th Floor Homes said. “We have now learned that Mr. Cernech may have been operating under false pretenses, with the goal of undermining our plans in collaboration with Bruce and Shawn Chait.”
Attorneys for Bruce Chait could not be immediately reached for comment. David Bogenschutz, Shawn Chait’s attorney, said the probable cause affidavit against Cernech doesn’t contain any new information that shows his client committed a crime. Bogenschutz said the attorney general has not presented any evidence that Shawn Chait committed the crimes he is accused of.
“It’s like the old Wendy’s ‘Where’s the beef?’ commercial,” Bogenschutz said. “I’m still looking for the beef.”
The alleged shakedown of Karsenti and 13th Floor dates back to 2010. At the time, Karsenti was notified by a lender that the Chaits had defaulted on a loan for one of the golf course properties. After acquiring the note, Karsenti foreclosed on the site. He later bought the second golf course from the Chaits.
Over the next 11 years, the Chaits allegedly hounded Karsenti for money because they were still upset about his foreclosing on the golf course. In 2012, for instance, the Chaits allegedly asked Karsenti for $1 million by threatening to sue over false contamination allegations. According to the probable cause affidavit, Karsenti paid some of the money to avoid damage to his company’s reputation.
Earlier this year, the Chaits turned up the pressure on Karsenti, who reported the father and son to the FDLE, according to the affidavit. At investigators’ direction, Karsenti recorded his meetings with the Chaits. At a meeting in March, Shawn Chait told Karsenti the only way they would stop is if 13th Floor paid $3.4 million. Otherwise, they would file a class action lawsuit aimed at negatively impacting the Tamarac projects.
According to the probable cause affidavit, Cernech’s role in the shakedown scheme involved leaking false information to Tamarac’s mayor and 13th Floor attorneys. The affidavit cites text messages in which the Chaits complimented Cernech for applying further pressure on Karsenti, calling him a “magician.”