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Pinellas couple plead guilty to real estate scam

The Hummers, the lavish parties and the thousand-dollar wine bills are all in the past for the owners of a once-booming Palm Harbor title company.

Instead, it looks like a spartan future for Cheryl and John Wehlau, whose Gulf Coast Title company was doing such a good business a few years ago that it turned out not to be true.

The Wehlaus pleaded guilty this week to siphoning money out of the Palm Harbor business, ultimately draining it of $7.9 million.

Cheryl Wehlau, who authorities said was the mastermind of the scheme, agreed to a sentence of eight years in prison. John Wehlau, who faced fewer charges than his wife, will be sentenced to time he already has served in jail.

The couple also will be ordered to pay back the $7.9 million.

In the good years before the company closed down in 2006, Gulf Coast Title handled hundreds of real estate closings a month. That meant plenty of money flowed in, month after month.

Essentially, the Wehlaus were accused of scooping the cash that came in and spending much of it.

They spent it on fancy company cars, on jewelry, art, designer shoes, a million-dollar country club home, a condo for their daughter — and plenty of other things that had nothing to do with the real estate transactions it was meant for, authorities said.

Among the company's purported business expenses: $3,713 for women's designer shoes, $2,308 for Disney World tickets, $5,139 for jewelry and $1,125 for wine from a California vintner.

"It was a float scheme, where tomorrow's closings fund today's expenses,'' attorney Marty J. Solomon said after the couple's arrest in 2007. "I guess maybe they thought they'd never get caught or that they'd be able to put all the money back."

But that never happened. Solomon represented Commonwealth Land Title Insurance Co., the underwriter that wrote title policies for Gulf Coast and discovered the misappropriations. It covered the losses, making good on hundreds of checks that bounced all over Florida.

Cheryl Wehlau "masterminded a scheme to funnel funds held in escrow for real estate closings into a business operating account, then spent the cash on a lavish lifestyle," the Florida Attorney General's Office said in a news release this week.

Her attorney, Michelle Florio, declined to comment.

Company insiders said Cheryl Wehlau ruled the company with an iron fist, demanding employees work long hours. But the perks were sweet — once the company paid for the staff to go to Stein Mart to buy new clothes, just to impress an important client.

Cheryl Wehlau, 44, pleaded guilty to 21 counts of misappropriation of $100,000 or more in funds. Her eight years in prison will be followed by 15 years of probation, and she will not be allowed to work in real estate.

John Wehlau, 44, pleaded guilty to misappropriation of escrow funds and 20 counts of petty theft of $100 or more.

Sentencing is set for November in Pinellas-Pasco Circuit Court, but the terms were announced this week.

Information from Times staff writer Kameel Stanley and Times files was used in this story. Staff writer Curtis Krueger can be reached at ckrueger@sptimes.com or (727) 893-8232.

Pinellas couple plead guilty to real estate scam 08/06/10 [Last modified: Saturday, August 7, 2010 12:12am]
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