For years, investors have complained that Belleair developer Robert Swain painted rosy pictures of his projects while papering over a history of bankruptcies and business failures.
On Monday, prosecutors joined in that criticism, charging Swain with violating a state law that bans using deceit or making false representations in securities transactions.
Swain, 56, was held in the Pinellas County Jail without bail Monday night.
"It's a racketeering case centered on the Pinellas County real estate developments of Rutland Estates, Tarpon Highlands and Tarpon Pointe," Pinellas-Pasco assistant state attorney Bill Burgess said.
Burgess wouldn't comment on how much money Swain is accused of taking. But in a civil lawsuit filed in February, two investors contend they and others lost more than $3-million.
Perhaps the best known of the three projects, Rutland Estates was proposed next to the historic Rutland mansion in St. Petersburg.
Swain bought 14 acres overlooking Little Bayou in 1997. He sold the 1913 mansion and a few acres, leaving 9.5 acres on which he planned to build 54 townhomes. But only three unfinished townhouses exist today. An engineer hired by the city recently recommended tearing those down.
A real estate broker who recruited buyers to Rutland Estates shouted in excitement Monday when she heard Swain had been arrested.
"This guy weaves such a web that nobody could find out what he was doing," said Liz Wallace, who estimates she is owed close to $500,000 in commissions and other compensation. "They've untangled the web, and it's just amazing."
Swain's two developments in north Pinellas suffered a similar fate. Tarpon Pointe was proposed for about 3.6 acres on the Intracoastal Waterway in Tarpon Springs. Tarpon Highlands covered another 5.5 acres near the north tip of Lake Tarpon.
In each case, the project foundered and ended up in bankruptcy court, leaving behind unhappy investors and unpaid subcontractors. In all, dozens of buyers lost thousands of dollars each in down payments on the three projects.
In lawsuits, three of Swain's former backers contend that he hid a string of business failures when he was touting the projects.
Last October, the St. Petersburg Times reported that at least seven companies Swain ran or was closely associated with filed for bankruptcy protection or liquidation since the mid-1980s. Two others went bankrupt after Swain cashed out. Still others eventually faded away or were transformed into entirely new ventures.
The flops include both local and out-of-state projects. In 1999, Swain bought the well-established Newport Creamery restaurant chain in Rhode Island. Since then, the chain has come close to shutting down. Swain has been kicked out of its management, and a court-appointed trustee has sued Swain and his wife for $9-million, accusing them of looting the business.
Swain's attorneys did not return calls for comment Monday night. In a telephone interview from Massachusetts last year, Swain said the complaints against him were "ridiculous."
"I don't think there's anybody who's been in the investment business for as long as I have and never had any problems," he said. "Every deal doesn't work."
But an attorney for three investors who put up a total of $500,000 for Swain's Pinellas County projects said Monday that "it's not a surprise to me that something like this would finally catch up to him."
Under securities laws, if someone asks a potential investor to give him money, he is required to make "complete disclosures of all material information," said David Boggs, a Tampa attorney who represents the three investors.
"If you have a history of companies that you ran having serious economic problems and going bankrupt, you should tell people" about that history, Boggs said. If those disclosures aren't made, and "if you keep doing it over and over and over again, someday it can catch up to you, not just in civil lawsuits like the ones I've brought but at a higher level."
_ Richard Danielson can be reached at (727) 445-4194 or Danielsonsptimes.com.