TAMPA — A retired couple who sold their longtime homestead to Buddy Johnson sued the former Hillsborough elections supervisor Friday, alleging that he committed fraud by secretly altering the terms of the sales contract.
Cecil and Nita Bass, who sold their 20-acre family land to Johnson two years ago for $800,000, say Johnson defrauded them in a conspiracy involving a title company and the Plant City bank whose president, at the time, was the treasurer for Johnson's re-election campaign.
Johnson changed the sales contract, the lawsuit says, to obtain financing in excess of the amount allowed under the contract's terms, enabling him to walk away from the closing with $158,177 in cash "for his own personal benefit."
The Basses say Johnson signed documents representing that he would finance $760,000 of the $800,000 purchase price: $240,000 from Sunshine State Savings in Plant City and $520,000 in a second mortgage from the Basses.
Instead, the suit says, Johnson negotiated a $400,000 loan from the federally-insured thrift and kept the Basses in the dark about it. In all, he got $920,000 in loans on the $800,000 purchase, allowing him to take a six-figure sum away at closing.
Johnson signed for the loan at Sunshine State Savings while its president, Floyd Hall, was Johnson's appointed campaign treasurer. Sunshine State is also where Johnson kept his campaign account.
Morgan W. Streetman, the Tampa attorney who filed the lawsuit, said the Basses retained him after they learned Johnson had misrepresented contract terms and missed several payments on their $520,000 loan.
"This property was the Basses' homestead," he said. "They are an elderly couple. They are not well-to-do. The income from this loan is a substantial and very important part of their retirement nest egg."
Cecil Bass, 80, and Nita Bass, 78, retired to Lake Wales after they sold their property to Johnson. The lawsuit says they lacked the sophistication to understand the transaction and that Johnson, Sunshine State and Platinum Title Co. "took advantage of that weakness."
Johnson did not return a phone call seeking comment. Platinum Title, a Pasco County firm, could not be reached.
Hall said he had no comment. Last year, after the St. Petersburg Times raised conflict-of-interest questions about Hall's role in the real estate financing, he promptly resigned his post as Johnson's campaign treasurer.
The Bass' lawsuit is the latest in a string of troubles for Johnson. On Wednesday, a circuit judge entered a $415,878 judgment against him, completing a foreclosure action on a mortgage he signed in 2006 to buy a condo at Rivo at Ringling in Sarasota.
Johnson lost a close race for re-election in November, but troubles from his administration have continued to dog him: There are questions about hundreds of uncounted ballots misplaced during the general election, $2.4 million in "unanticipated" election expenses, and a $2.1 million bill for optical scan voting machines that remained unpaid even though the county commission had funded the full price.
The legal entanglement with the Basses dates to 2006, when Johnson approached the couple about buying their property, a 19.98-acre oak-shrouded tract off Thonotosassa Road that had been in the Bass family since the Great Depression.
To buy the property, Johnson set up a limited liability company called Fort Bully East. According to the lawsuit, Fort Bully was controlled wholly by Johnson and incorporated as his "alter ego" to limit any future personal liability.
After signing for $920,000 in loans for Fort Bully and taking $158,117 in cash from the closing, the suit says, Johnson put none of that money back into the company, commingled his personal assets with Fort Bully's and "willfully mismanaged" the company's assets.
Streetman questioned why Sunshine State would approve such a loan for the fledgling company started with just $10,000 and which had no history or assets.
Streetman's co-counsel, William J. Podolsky III, said he tried to resolve the Basses' situation with Sunshine State Savings but could not work out an agreement, leaving no option but a lawsuit.
A few months after the land sale in 2007, the Times asked Mrs. Bass about the financing. She said she and her husband agreed to loan Johnson $520,000 for the purchase after he persuaded them the second mortgage would provide steady income for their retirement.
"We're getting 6 3/4 percent on the loan to him," she said. "If you put that money in the bank, you'd only get 2 or 3 percent."
She seemed bewildered when asked how Johnson managed to borrow $920,000 for an $800,000 purchase. "How he borrowed that much is a good question," Mrs. Bass said then. "The market has hit bottom and that's a concern for us. But the payments have been coming in."
Not any longer. And according to the suit, Johnson has driven Fort Bully East, the owner of the land, into insolvency. The company's corporate charter dissolved four months ago.
Now the Basses worry that Sunshine State might foreclose and jeopardize their main source of retirement income.
Their lawsuit seeks "damages the court deems proper."
Times researcher Caryn Baird contributed to this story. Jeff Testerman can be reached at (813) 226-3422 or [email protected]