Lawsuit: Miami city attorney, husband ‘conspired,’ used city to flip properties

Predatory scheme to buy and sell homes may have targeted the elderly

Two months after his mother passed away, facing $271,500 in code enforcement fines from the city of Miami, Jose Alvarez agreed to sell his 4-bedroom, 3-bath family home near Marlins Park for the bargain price of $205,000.

After all, the buyer was recommended by Miami City Attorney Victoria Mendez. It was her husband, Carlos Morales. She said he could help.

Instead, Morales told the 70-year-old homeowner that it would be too complicated and expensive to resolve the code violations — an illegal rental unit — which were causing a $500 daily fine. Selling it was the only option, he told Alvarez, and offered to buy it himself. Almost a year later, after he completely remodeled the home, Morales went to the city’s code enforcement board and got the fines reduced to zero. Zero!

Complicated and expensive, huh?

Morales paid $61.05 to get permits for some of the work he had already done on the house, according to photographs published with the listing, and sold it for $370,000 — a $165,000 profit.

Late Tuesday, Alvarez and his attorneys filed a lawsuit against the city, Tricky Vicky, Conman Carlos and his company, Express Homes, for what they say were fraudulent misrepresentations. Alvarez “was induced to sell his family home under false pretenses, when he contacted the City Attorney for help resolving a building code violation but was referred to her husband, who has generated millions of dollars of revenue by purchasing similar properties at below-market value and flipping them for a profit,” reads a statement from the law firm.

“Then, he was able to use his political connections to obtain a waiver of fines and penalties, remodel the home without permits and flip it for almost 100% profit.”

“This is libel,” Mendez told Political Cortadito in a text message. “This is a strategy to continue to harass me and now my family due to the Madroom case,” she said, referring to the lawsuit against the city from the operators of the Ball and Chain bar, which was targeted and eventually, temporarily shut down by Commissioner Joe Carollo, who weaponized the code enforcement department and the city attorney to retaliate against the business, which supported his opponent in the 2017 election.

Read related: Miami Commission, attorney stifle public comment on noise ordinance

But the attorneys representing Alvarez think there are more victims of Conman Carlos. Since 2014, Express Homes has bought 20 houses in Miami-Dade at below market prices, selling 19 for big profits — 400% in one case. The smallest profit was 39%. More victims are expected to come forward, said one of Alvarez’s attorneys, Jeff Gutchess.

And they will likely be elderly. Fourteen of the 20 homes purchased were bought from people in the Miami-Dade Guardianship Program, the non-profit agency designated as the public guardian for indigent, incapacitated adults, most of whom are the same elderly voters politicians chase.

Eight of the homes flipped were in the city of Miami. Including Alvarez’s mother’s home, at 900 NW 30th Avenue.

This could be more than unethical. It should be criminal — the intentional predatory fraud on vulnerable elderly residents. And it seems that there is already some kind of ongoing investigation.

Alvarez called AXS LAW, one of the top commercial litigation firms in South Florida, about two months ago, after an investigator from somewhere reached out to him, Gutchess said. “They’re investigating. Somebody called him,” the attorney told Ladra Wednesday.

But Alvarez, who first went to the city attorney to see what he could do to keep his family home, sold the house to Morales more than five years ago, in August, 2017. When Morales got ready to flip the house, he went to the code enforcement board meeting in July of 2018 to mitigate the fines.

Read related: Lies on public comments just tip of slips for Miami Attorney Victoria Mendez

“I bought the property last year from a  gentleman Joe Alvarez… He was not aware of how to cure these violations,” Morales says in a video clip from the July 25, 2018 board meeting. He had earlier said he was not an attorney, “but I’m married to one,” in case anyone needed some reminding.

“I knew the property was cited, I felt, incorrectly because it was under his mom’s name. And his mom had been incapacitated in the home for about 10 years. So I felt that I could…We have fixed the property up and we are ready for sale.”

The board seemed more than familiar with Conman Carlos. They were chummy. There was laughter. One board member said they were going to act like Santa Claus and wipe out all the penalties.

“Morales intentionally made false statements to Alvarez regarding how hard the  code violations were to fix and how they significantly lowered the market value of the property,” states the lawsuit. “Morales knew these statements were false when made, because he knew that he  would be able to fix the code violations without permits and then enlist the City to mitigate the hundreds of thousands of dollars in fines to zero based upon his wife being the City Attorney. Morales intended for Alvarez to rely on his false statements, so that he could  purchase the home and make a profit.” 

The natural next question is: How many times have they done this?

The fact that Morales even got before the code enforcement board that July, after the agenda was set, shows that he gets special treatment.

“I am sorry to bother you but I need your help,” Morales wrote in an email to an assistant city attorney who reports to his wife. He copied Commissioner Joe Carollo and members of his staff, even though the property is in Alex Diaz de la Portilla’s district.

“I have a closing scheduled for the end of next week to sell the above referenced property. I need to get on the code enforcement board calendar for mitigation. I was informed the next available hearing is September or October because there are no more special master calendars.”

Here comes the ask.

“My closing will not occur if I cannot address the lien causing me serious financial loss. Please help me get on one of those July existing calendars by adding a supplemental agenda to one of those dates to address my case and any other backlog. I would appreciate it.”

Yeah, he would. No question.

“It has been done in past administrations when necessary,” Morales says. And how does he know? Has it been done in the past for him?

Six days after he sent the email, he went before the board and got the lien wiped out.

But let’s not forget Tricky Vicky set the whole thing in motion. Her ethics have been questioned before. Who can forget the recall cheat sheet?

Read related: Miami city attorneys conspired, created ‘cheat sheet’ to stop Joe Carollo recall

“Victoria Mendez engaged in a deceptive act when she recommended her husband’s services to Alvarez, a taxpayer of the City of Miami, instead of recommending the appropriate City official that could help with code violations,” the lawsuit reads, “when she knew or should have known that she would personally benefit from the sale and her husband would use her position to mitigate the property.  

“It was reasonable for Plaintiff to rely on Defendants’ affirmations given that the City Attorney, Victoria Mendez, who would have vast knowledge on how the Code Enforcement Board operates, had recommended Morales to Plaintiff. These deceptive acts directly caused Mr. Alvarez to sell his home well below the market value to Morales.

“Morales, Mendez, and the City of Miami conspired to defraud Alvarez out of his family home” the lawsuit reads.

But they are not the only ones who are victimized. Miami residents have been deprived of safety and city revenue in the form of permit fees, code violations fines and penalties.

Gutchess said the motive for the lawsuit is twofold: “We want Mr. Alvarez to be compensated for the loss of his house and we went to expose what happened to the public. It’s not right.”

Lawsuit filed against Victoria Mendez and husband, Carlos Morales by Political Cortadito on Scribd