Clear82° WeatherClear82° Weather

Buddy Johnson loses Plant City property as foreclosure, fraud suit loom

TAMPA — Former Hillsborough Supervisor of Elections Buddy Johnson, facing foreclosure and a fraud lawsuit, has abandoned any claim to 20 acres of land he bought three years ago for $800,000, and still faces the prospect of having to defend his actions in court.

In 2007, Johnson got two loans totaling $920,000 in a transaction to buy the Plant City acreage from Cecil and Nita Bass, an elderly couple whose family had owned the land and small home on it since the Great Depression.

He persuaded the Basses to lend him $520,000, then borrowed another $400,000 from Sunshine State Savings and Loan, where the president was his re-election campaign treasurer. Because the price of the land was $800,000, Johnson got the property and more than $120,000 in cash when he left the closing.

Johnson kept the taxes low with a $20-a-year cattle grazing lease and said at various times he intended to develop the land, flip it for a profit or one day build homes on it for himself and his children. None of the plans came to fruition.

Now, under pressure from a fraud suit brought by the Basses and a foreclosure action from the bank that helped Johnson finance the purchase without so much as a written loan application, Johnson has given the property to Sunshine Savings.

Johnson, who used a limited liability company named Fort Bully East to buy the land, deeded the property to Sunshine Savings on Nov. 20 to resolve the foreclosure suit, but received no money in return. The bank then filed a satisfaction of mortgage, signifying its $400,000 loan to Johnson was paid.

"It was basically a deed in lieu of foreclosure,'' said Keith C. Smith, an attorney for Sunshine Savings. "Johnson conveyed back the property for Fort Bully. He received zero consideration."

The bank, named as a defendant in the Bass fraud suit along with Johnson, Fort Bully East and Platinum Title Co., has also now reached a settlement with the Basses, though its terms are confidential, according to the Basses' attorney, Morgan Streetman.

On Dec. 24, the Basses signed a document canceling their $520,000 loan to Johnson. It included language that said the couple had not received the money Johnson owed them.

The Basses — Cecil is 81, Nita is 78 — say they were persuaded by Johnson to make the second mortgage to him and counted on the investment as a key part of their retirement nest egg. With the land gone and their mortgage now canceled, it's unclear what they may have received from Sunshine Savings and whether Johnson will end up paying them anything.

But Streetman said remedies remain in the Basses' civil action, which still might go to trial this year.

"Mr. and Mrs. Bass have dropped Sunshine as a defendant in their lawsuit,'' Streetman said. "But the Basses retain all the legal claims in their original lawsuit, and we intend to pursue those vigorously in court."

Johnson, a cofounder of BuddyFreddy's restaurants and a three-term state legislator, was defeated in November in a bid to keep his job as elections chief. He did not return calls for comment. His attorney in the Bass case, William Stainton, withdrew in November, citing "irreconcilable differences" with Johnson.

In the run-up to the election, Johnson piled up debt on his property purchases and in the elections office. With the purchase of the Basses' land and a luxury Sarasota condo, Johnson's debt rose to $1.6 million on income of about $142,000 a year. In the elections office, he illegally overspent his budget by almost $1 million, and may have misspent tax money earmarked for "voter education" to further his re-election effort, according to office records.

Last year, the FBI opened investigations into Johnson's spending in public office and in his private life. Friday, FBI spokesman David Courvertier declined to comment on the progress of those investigations.

By the time voters ousted Johnson, he had seen the $452,907 in loans on his Sarasota condo foreclosed, and had stopped making his payments to the Basses and Sunshine Savings.

The Basses sued last January, saying Johnson secretly altered the terms of his sales contract in a conspiracy involving Sunshine Savings, whose president, Floyd Hall, had been Johnson's appointed campaign treasurer. Sunshine filed its foreclosure suit in April.

By arranging financing in excess of the purchase price, the Basses claimed, Johnson was able to obtain title to their land and, with refunds of money he had already put down as a deposit, walk away from the closing with $158,177 in cash as well.

According to court records, Johnson submitted neither a written application nor a financial statement to Sunshine to obtain the $400,000 loan. And he did not reveal that he had just signed for two loans on the Sarasota condo that could have made him ineligible for an additional mortgage.

Johnson told a bank officer he had good equity in another Plant City home he was putting on the market. But Johnson actually ended up selling it for a loss. His credit score, 591, was poor, but Johnson said he was hiring a bookkeeper to help keep him current on bills — another assertion that turned out to be false.

In a memo to the bank's loan committee, Senior Vice President Paul Hackney noted Johnson "has a good history in business and also in elected office." Hackney recommended approval of Johnson's request, saying the Bass property was worth considerably more than the $400,000 sought.

After Sunshine got the deed to the land from Johnson last year, it kept it less than six weeks. On Dec. 30, Sunshine sold the property to a local radiologist, Dr. Angela E. Sroufe, for $520,000.

Times researcher John Martin contributed to this report. Jeff Testerman can be reached at (813) 226-3422 or testerman@sptimes.com.

Buddy Johnson loses Plant City property as foreclosure, fraud suit loom 01/15/10 [Last modified: Friday, January 15, 2010 10:59pm]

© 2014 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...