Tuesday, June 19, 2018
Business

Elderly woman tells judge how a Pasco lawyer took all her money

TAMPA — On Friday morning, 73-year-old Jacqueline Drury told a judge how she lost almost everything after investing $227,644 with Pasco County attorney and real estate developer Constantine Kalogianis.

How she lived without a car and had to rely on relatives to get around. How she couldn't afford to see a dentist and had to give up cable TV. How she used to visit her daughters in New York but can't go any more unless they pay for the trips.

"This has had a significant impact on you, hasn't it," Hillsborough Circuit Judge Robert Foster asked.

"Of course,'' she replied.

Foster is serving as referee in the Florida Bar's complaint against Kalogianis, accused of failing to disclose that he was in serious financial trouble when he borrowed $227,644 from Drury in 2007 under the guise of an investment, then failed to pay her back. The Bar is urging that Kalogianis be disbarred for five years, a penalty that could end the legal career of a controversial figure who already has been reprimanded once for violating Bar rules and was recently accused by a lender of altering court files in several Pasco foreclosure cases.

Previous coverage: Motion accuses Pasco lawyer of altering documents in foreclosure cases

"He's a bully,'' Bar attorney Julie Heffington told the judge.

Kalogianis, 53, was absent Friday, the day Foster was expected to announce his recommendation for punishment by the Florida Supreme Court. He did not announce it then, saying he wanted more time to put it in writing.

However, after hearing testimony from both Kalogianis and Drury in April, Foster found that the lawyer had engaged in "deceitful tactics'' to avoid repaying her and that his testimony was "evasive,'' "not credible" and "riddled with inconsistencies.'' In his 41-page report, the judge said there was "clear and convincing evidence'' that Kalogianis violated several Bar rules in his dealings with Drury.

According to the Bar complaint, Drury initially sought the lawyer's help in selling her late mother's home in Trinity. Shortly after the sale closed, Kalogianis borrowed $227,644 from her in what both sides called an investment agreement under which he would pay her $1,000 a month in interest for five years, then repay the entire principal.

The agreement — actually a personal loan — was supposed to be secured by mortgages on Kalogianis' house plus a lot he owned in Williamsburg Estates, a New Port Richey subdivision he was developing and where he was also building a palatial new home.

However, the Bar and the judge found, Kalogianis failed to disclose that the properties already were mortgaged to two different banks for a total of more than $2 million. Both loans eventually went into default and Drury's mortgages were wiped out by the foreclosures.

In 2009, citing the downturn in the economy, Kalogianis cut his monthly payments to Drury to $500. He also took $60,000 of her money for upgrades to his new 9,000-square-foot house, including granite countertops, hardwood floors and crown molding.

"He essentially just stole it,'' Heffington, the Bar attorney, said Friday of the $60,000.

When his loan came due in 2012, Kalogianis tried to continue paying $500 a month but Drury wouldn't take it and told him she wanted the entire amount he owed her. He refused. She was unable to find a lawyer willing to sue him on a contingency basis so she went to the Bar.

In a written response to the Bar complaint, Kalogianis portrayed himself as a victim of a real estate crash he couldn't have predicted.

At the time he borrowed from Dury, Kalogianis was "unaware that a Great Recession was about to start the following month (but) would not be officially diagnosed until approximately a year later,'' he wrote. "The Florida Bar is now unfairly seeking to attribute (Kalogianis) with knowledge that he foresaw the U.S. economy's near collapse in 2007, which simply has no basis in fact."

Kalogianis accused Drury of trying to use the Bar as a "debt collection agency." He said there was no requirement he disclose his financial condition but noted that she signed a waiver of conflict of interest, required when a lawyer does business with a client.

Judge Foster listened intently Friday as Drury described the circumstances under which Kalogianis gave her the waiver form — standing in a hallway after they already had made their investment agreement.

"I was ready to leave,'' Drury said. "I had my bag and he said, 'Oh, by the way, I have to have you read and sign this. You could get counsel.' My response was, 'you're my lawyer and I trust you.'''

Susan Taylor Martin can be contacted at [email protected] or (727) 893-8642. Follow @susanskate

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