By David Arthur Walters
The South Florida real estate recovery has been a boon for Miami’s Sharron Lewis Design Central, headed by Jihad Doujeiji, who succeeded his wife, Sharron Lewis, when she passed away in March 2011 after a long bout with terminal cancer, but he is encountering some difficulty with licensing and permitting along the way.
Sharron ran the interior designing and furniture manufacturing divisions for the firm. JIHAD took care of the construction end but he had no license; therefore she studied, passed the exam, and obtained a general contracting license for him to work under. He did not alert the licensing authorities when she died, and was soon cited for operating without a license, for which he received “just a traffic ticket.” Still, he was worried enough to get himself a trusted expeditor, who in turn, besides fiddling with plans and getting them approved, induced licensed contractors to put their license numbers on permit applications to “make the paper look good.” He still did all the bidding, the contracting, the billing and disbursement of funds. He ran the jobs and his own crew did most of the work, sometimes using licensed subcontractors for electrical and plumbing. He was well known as competent general contractor, so who cared if he had no license as long as licensed contractors signed the permit applications under penalties of perjury?
Jihad scratched the contractor information off his business card and went ahead with contracting, bidding and landing millions in contracts. He called himself a construction manager. We asked the state licensing board if someone could just call himself a “construction manager” and not have to obtain a license. No dice. We were referred to an official understatement rendered to another inquirer: a construction manager is a general contractor.
According to Tony Gonzalez, operations manager of the City of Miami Beach Building Department, unlicensed contractors are occasionally tagged by inspectors for running jobs on a borrowed license, i.e. “piggybacking.” The licensed contractor on record, who has been watching television or out boating, is called in, and does not seem to know anything about the job. However, said Mr. Gonzalez, that kind of case is hard to prove so seldom prosecuted.
It is the form and not the substance of the thing that counts, at least until buildings start falling down. Jihad may eventually learn the formalities of how to best play the game; say, get a licensed contractor, as a partner, to put his license in one of his companies, sign documents, perhaps go over the plans, maybe show up on the jobs once in awhile, and otherwise avoid the appearance of impropriety, for a commission on gross revenue and small share of the profits.
Never mind the licensing. Jihad is involuntarily raising otherwise lazy eyebrows due to the SunPost’s exposé of something “every contractor does,” so much so that wrong seems right because wrong has been done so long. Indeed, it has allegedly become so customary that it seems “perfectly legal,” at least until one is caught doing it, and then the penalty is “just a traffic ticket,” amounting to having to pay double permit fees plus a small penalty for attempting to deprive government of the permit fees it is entitled to, by stealing a march on the regulators, gaining a secret advantage over them, thus leaving the government in the lurch and the unwitting majority holding an empty bag.
If permit fees evaded were taxes, the evasion would be felonious. But construction seems to have its own world governed by a masonic conspiracy set on overthrowing the foundations of any government it cannot control. Deceiving the government out of permit fees would seemingly be covered by laws prohibiting attempts to defraud or actual grand larceny; but law enforcement apparently cannot sell it as a crime to prosecutors, who cannot sell it to judges, although the Man on the Street would think it is deserving of a trial, especially if he knew how much money is pocketed by the unindicted conspirators every year. Contractors call it “getting ahead of the job.” We have accordingly titled our expose ‘Getting Ahead of The Job Con,’ beginning with ‘Getting Ahead of The Job Con at the Icon,’ and ‘Getting Ahead of The Job Con at the Continuum,’ and now this, ‘Getting Ahead of The Job Con at Sunset Harbour.’
The irony of the Icon project is that the fabulous remodeling job done in unit 1801, after it was wrecked by foreclosure “victims,” was not permitted by the City of Miami Beach at all, according to a city records clerk, yet Sharron Lewis Design Central features a photograph of the living room redone there on its home page. The Icon contract was completed for Gerald Jonas, a seasoned Wisconsin general contractor in town speculating on real estate on behalf of his company’s profit sharing plan, which is allegedly brimming over with accumulated earnings. Mr. Jonas certainly had a winning team for the Icon deal: namely, his real estate agent, Bragi Sigurdsson, contractor Jihad Doujeiji, lead interior designer and marketing maven Elizabeth Calomiris and her design consultants, Jorge Hernandez and John Wheeler, at Sharron Lewis Design Central. Mr. Jonas flipped the Icon apartment six months after he bought it, netting an estimated $1,263,000 after commissions and staging costs of $167,000.
Mr. Jonas, more than satisfied with his team’s results at the Icon, contracted with Jihad at Sharron Lewis Design Central to build out the empty and bare 6,650 sq. ft. condominium/penthouse TS3 at Sunset Harbour, agreeing with Jihad to nearly $1,000,000 in construction costs plus furnishings valued at around half that. A source within the building said the unit is “cursed.” One Felix Mostelac bought it for $6,500,000 in 2007. Chase Bank foreclosed and sold it to K. Ramkissoon LLC for $1,700,000 in January of this year. Ramkissoon sold it to Jonas Builders Profit Sharing Plan in February for $2,350,000, at which time Mr. Sigurdsson had it listed for $3,900,000. The value added by the staging of the apartment and the improving market for high end apartments may reap an even higher price of, say, $5,000,000.
Plans had been drawn in 2007 and a permit applied for “remodeling” at a stated value of $200,000. That permit, without the benefit of an expeditor trusted by plan approvers, was approved eight long months later, in March 2008; however, no construction was done; the permit was “closed” in June 2008. On March 21, 2012, Gerald Jonas, a seasoned Wisconsin contractor and investor, signed a blank permit application under penalties of perjury as owner and owner-builder. The application form expressly prohibited, in bold capital letters, an owner from signing the form in the owner-builder section unless s/he is actually an owner builder. After the permit had been approved on the basis of the application, and after we stated that it was impossible for the permitted job to be an owner-builder project given the circumstances, a Building Department official crossed out the owner-builder attestation.
We opined that the alteration of the completed and approved application constituted a “tampering” with evidence, and said that the entire process had been inappropriate. Rhonda Montoya Hasan, an attorney in the City Attorney’s office who had reviewed the application for approval, stated that our portrayals were “misrepresentations,” including our opinion that the standard procedure of signing documents in blank under penalties of perjury, the blanks to be filled in later as needed, was inappropriate. In this case, the blanks were filled in with the names of contractors and the nature, scope, and value of the work, misrepresentations that in our opinion were neither innocent nor negligent but were fraudulent.
“Contractors do not have to be listed on a permit application at the time of the initial submittal for plan review,” she stated on May 16. “A ‘to be assigned’ would be noted and a contractor when required would necessarily have to be assigned before the permit is issued. In this case, there is a contractor in place; the plans were reviewed and approved for the kitchen and bathroom demolition, which is the scope of the applicable permit.”
The fact that the permit was issued for the destruction of a nonexistent kitchen and bathroom was not a misrepresentation but a fact supported by photographic evidence. We also pointed out that the permit erroneously bore the name of a previous owner, Felix Mostelac, a fact that had caused considerable confusion on the part of several people because the county record had Jonas Builders as owner at the time, and his name was obviously on the application for the permit. She falsely blamed the error, which was allowed to persist for some time after we pointed it out, on a tardy updating of the county appraiser’s records instead of admitting to the mistake, the detection of which was apparently another misrepresentation in her mind.
In response to Ms. Montoya, we asserted that her denials were a constructive admission that mistakes had been made in accordance with bad policy, particularly in the handling and review of documents critical to the revenues of the city and safety of the public. She did not respond.
However that may be, the blank application was signed by Gerald Jonas on March 21. Enter plan and permit fixer Orestes “Rusty” Innocenti aka Rusty At The Copy Shop. We believe his initial fee including hard cash for out-of-pocket expenses was around $22,000; that number probably increased when things went awry and more consulting fees, plus cash from the Money Truck for special expenses, were needed. Jason Sipes, a licensed general contractor dba Allstate General Contracting, was induced to sign the application under penalties of perjury on March 27—Mr. Sipes hung up the phone on our reporter, who called him to ask “routine survey questions about the million-dollar Sunset Harbour contract.”
Rusty allegedly had a familiar architect approve a doctoring of the old 2007 plans, which had not come to fruition, apparently to show the demolition of a kitchen/bathroom that had never been built. The facts affirmed by the signatories to the application were that a “Kitchen Bathroom Demo” would be done in a “500 sq. ft.” area at a stated value of “$6,000.” The application was filed on April 6 and approved on April 20, such being the amazing speed of expeditor Rusty in getting plans and permits approved. Rusty is especially valued for having available an architect who will sign without much ado onto plans drawn by permit seekers or their draftsmen. Again, it is form over substance: everything is permitted “as long as the paper looks good.”
Expeditors, by the way, are unlicensed by the contractor’s licensing board. They do not have to put their names to the jobs they expedite. Former City Manager Jorge Gonzalez said he protested against the expedition business, but he said his objections were dismissed by vested interests. A public records request turned up no jobs permitted over the past five years for Permit Doctors, the major expeditor, but Rusty had made the mistake of putting his name down, as a contact, eight times.
In fact, the intent was to complete the $1,000,000 Sunset Harbour contract as quickly as possible, and that is what Jihad, driven by cash flow, was bound to do come hell or high water. After our repeated urging, based on a public photograph showing the space was completely empty before the permit was pulled, and therefore having no bathroom and kitchen to demolish, an inspector managed to get into the building on May 29. Building Department Director Stephen Scott acknowledged that there was some difficulty in gaining access. Several calls to the building manager, to confirm an allegation that he had been “taken care of” at the outset of construction, which is a customary practice in some quarters, were not returned. Stop Work Order BV12000621 was issued on May 29 based on the obvious fact that the work done had nothing whatsoever to do with the work permitted: “Work done without approved permit. Permit BD120153 was obtained for kitchen and bathroom demo. Total interior demolition took place (emphasis added), plus construction work as of new partitions, new electrical, new plumbing, new A/C. Need to stop all work. Need to submit the required documents to obtained approved permit and inspection. Permit BD120153 has been revoked. Double fees apply.” There was no “total interior demolition.” The inspector was apparently unaware of the fact that the space was empty when the permit was pulled. A surveillance photo taken when the job was shut down indicates that perhaps $200,000 to $300,000 retail value of anti-demolition work had all ready been done before the inspector caught up with what is known in the industry as “Getting Ahead of The Job.”
Mr. Doujeiji, Mr. Jonas and his Florida attorney failed to respond to requests for information, which must have forewarned them of our investigation. In any event, Mssrs. Doujeiji and Innocenti, alerted to our persistent inquiries to top city officials, were prepared for the May 29 shutdown. Sharron Lewis Design Central staff allegedly drafted plans in accord with the real intention of the owner. The official plans, dated May 28, numbered B1203805, are “Drawn” by “Rusty” for the “Job” called “Jihad.” “Trusty Rusty” or “Speedy Rusty,” as he is sometimes called, had all ready, by May 31, gotten the zoning, electrical, and structural components of the plans approved for permitting. The alacrity of expeditors is rather amazing when compared to the lengthy time it takes owners and developers to pull permits without their services, even with the same documentation.
Rusty got Harald Bergen dba Construction Design Group International Inc., allegedly his main client, to sign new work permit application B1203805 on May 27, filed on May 29 for a stated value of $400,000 in interior remodeling of 6,000 sq. ft., including new electrical, plumbing, and mechanical work. Mr. Bergen’s signature on the application was notarized by Rusty. The application appears to be a duplicate of the one originally signed in blank by Gerald Jonas as owner-builder way back in March, with the blanks filled in this time with a different scope and value of work, and with Mr. Bergen’s information.
Mr. Bergen provided his business (“C.D.G.I”) address on the new permit application as an 841 sq. ft. private residence at 8001 Crespi Blvd 4-D, Miami Beach, Florida 33141; however, the city, prone to making and reiterating mistakes, erroneously gives the city as Milwaukee, Wisconsin on its May 29 Receipt of Payment. 8001 Crespi Blvd. 4-D was deeded by Mr. Bergen and his wife to a single woman in 2005. The company address that Mr. Bergen registered with the contractors licensing board is 1521 Alton Road Suite 646, a drop box in a UPS store.
In a July 5 letter to Building Department Director Scott, we stated that application B1230805 of 29 May 2012 appears to be “invalid as to form and should be rejected out of hand. A proper application unstained by past misconduct should be submitted.” We said we had good cause to be suspicious of any forms used by Jihad Doujeiji, such as Photo Shopped certificates of insurance provided to owners, for contracting purposes, and to building managers, to gain access to buildings. We suggested that the Building Department “be overly cautious when reexamining the two applications, which appeared to be identical in some respects; to make sure, for example, that the signatures are actually in the original and not forged, comparing especially carefully the signatures of the notary, and examining her book to see if two forms were actually notarized. Not that there were not two forms, with one to be held in abeyance just in case—several blank checks can come in handy as everyone who is gaming the system knows.”
Regarding old permit BD120153, which in our opinion was fraudulently obtained, we opined to Mr. Scott that it would seem to a reasonable layperson that anyone who swears or affirms to whatever might be inserted in a document later on should be held accountable for whatever appears on it later on. If false information were subsequently provided, the owners who signed permits in blank would have committed perjury. And contractors who knowingly affirm falsehoods would arguably have perjured themselves.
City officials at this deadline have not responded to our suggestion that the “new” application be voided and an untainted one obtained. Neither has Director Scott responded to our June 11 request, asking him what he or his colleagues have done now that they have incontrovertible evidence that the City of Miami Beach had been fooled, and proof the mastermind of the deception was unlicensed contractor. And, we asked, “What are you and/or your colleagues doing to radically reform the system so this sort of misconduct is unlikely to pass muster in the future?”
To the best of our knowledge, based on allegations that Mssrs. Doujeiji and Innocenti have visited the site to plan the work, and that the new general contractor has had little or nothing to do with the job as of yet, approval of the “new” permit is expected forthwith, upon the payment of a whopping fee.
The fee for the fraudulently obtained and then rescinded permit BD120153 was $947.98. The fee on the new, May 29 permit application BD1203805 was initially stated at $24,351.93. On June 17, we were informed by someone who does some expediting himself that the Building Department opposed assessing double-permit fee penalties for getting ahead of the job and were inclined to waive them. We troubled Mr. Scott about our source’s statement regarding the waiver of penalties, to which he responded that our source was incorrect. The pertinent fees were then virtually doubled: the July 6 Receipt of Payment shows a total fee of $46,945.80, for an additional fee of $22,593.78. If the contractor had completed the project on the basis of the demolition permit and gone undetected, the owner would have saved nearly $46,000 altogether. No one knows for certain how many millions of dollars has been lost by the city on other construction projects due to negligence, fraud, and public corruption over the last few years. Our guess is at least $50,000,000.