Vero Beach lawyer Eric Granitur went on trial Monday at the federal courthouse in West Palm Beach, charged with conspiracy and making false statements in connection with mortgage loans that helped developer George Heaton keep moving ahead a decade ago with construction of the Vero Beach Hotel & Spa.
Among those set to testify against him was Heaton, who agreed to cooperate with prosecutors in exchange for a plea deal that will limit his own sentence to no more than five years in prison.
Granitur, 60, who performed escrow work in 2008 and 2009 for condominium units at the hotel, maintains his innocence, but prosecutors allege he and others lied to lenders about incentive programs, such as cash-to-close rebates, used to lure prospective buyers to the Ocean Drive development during the real estate slowdown.
This illegal move gave commercial lenders a false impression of the viability of the luxury hotel and condominium project, they say. Developers then were able to secure the funds they needed to finish construction without proper scrutiny and to the detriment of the banks.
Financial institutions funded mortgage loans totaling more than $20 million. Yet, some of the units went into foreclosure, costing the banks an estimated $3.3 million, according to court records.
Granitur, a real estate and probate attorney with an office on Azalea Lane, was indicted by a federal grand jury in September 2016. He entered a not guilty plea with the court shortly afterward and was released on a $100,000 bond.
If convicted, the lawyer faces up to 30 years in prison, some $1 million in fines and possible reparations. He is fighting three federal charges including one count of conspiracy to make false statements to a federally insured institution and two counts of making false statements.
Co-defendants Heaton, 74, and Deborah Baggett, 55, an accountant, both accepted plea deals for a lesser charge in January. They will be sentenced after a verdict is reached. Each is facing up to five years in prison.
Vero Beach Hotel and Spa was developed in two phases by Heaton under the LLCs Vero Lodging and Vero Beach Hotel and Club. Finance agreements for construction required documented sales of a certain number of units in a specific time frame. Banks wanted to see that the units had been sold before parting with construction funds.
Granitur’s escrow company, Live Oak Title, represented a prospective buyer of several units, according to court records. As an escrow agent, he was charged with holding in trust mortgage loan proceeds and distributing the funds upon approval from the bank.
Federal law requires escrow agents to truthfully and accurately prepare and distribute to lenders a settlement statement that details the sales price, closing costs paid by the buyer and any seller contributions before a mortgage is executed.
Buyer incentives for several condominium units at the Vero Beach Hotel and Spa were not disclosed or documented, however. Concealing the incentives gave banks a false sense of confidence that buyers would be able to repay their loans, prosecutors claim.
Heaton and others falsified documents and improperly transferred money between accounts, they said. The group intentionally concealed seller incentives for personal financial gain.
Granitur is a current member of the Florida Bar in good standing. Neither he nor his attorney responded to a request for comment.