Athens condo owners sue developer and others, alleging violations of state RICO Act
Online Athens
By Jim Thompson
28 June 2017

Owners of some of the condominiums in Athens’ intown Heritage Square neighborhood are suing local real estate investor and rental property owner Fred Moorman and other Heritage Square condominium owners.

The homeowners accuse Moorman of committing violations of Georgia’s civil Racketeer Influenced and Corrupt Organizations Act in an alleged scheme by Moorman to take over the neighborhood.

Broadly, Georgia’s RICO Act is designed to address “an interrelated pattern of criminal activity motivated by or the effect of which is pecuniary gain or economic or physical threat or injury,” according to the state code.

Specifically, the lawsuit alleges that Moorman and the owners named as defendants are engaged in “a scheme to acquire eighty percent (80%) of the units [at Heritage Square], partition the condominium at a reduced fair market value, and eject Plaintiffs from their homes.”

According to the lawsuit, Moorman “and his co-conspirators” now own 35 of the 46 units at Heritage Square, located off Sunset Drive near Oglethorpe Avenue across from Bishop Park.

In an interview following a November meeting of the condominium association board, Moorman said he had been acquiring the Heritage Square units as part of a long-term effort to transform the neighborhood, including other property he owns in the immediate vicinity, into a mix of residential, commercial and retail buildings.

“I think it would be a great mixed-use development,” Moorman said after the Nov. 29 meeting.

But in a Wednesday interview, in which he said the lawsuit is not deterring his efforts to gain control of the condominium association, Moorman had backed off of that plan, and said his effort is simply an investment strategy, given the 16.2-acre neighborhood’s proximity to the University of Georgia’s Health Sciences Campus.

“I’m going to buy it and hold it until somebody wants it,” he said.

condominiums are an outmoded form of residential living that are being replaced across the country

Moorman on Wednesday called the legal action “frivolous litigation” and suggested that condominiums are an outmoded form of residential living that are being replaced across the country.

“I think … that the train’s coming and that they need to get off the tracks,” Moorman said of the plaintiffs in the lawsuit.

Documents attached to the lawsuit include a letter, apparently from Moorman to owners of Heritage Square condominiums, admitting that “approximately 10 years ago, I began purchasing condominiums in College Square with the intent to eventually purchase all units. Currently I own or control 35 of 46 condominiums in the Heritage Square complex. This represents 76% ownership of Heritage Square.

“Condominium law in Georgia allows for dissolution of the condominium association if a vote of 80% of eligible voting members confirms this action. I need only to purchase two more condominiums … to ensure that I can effect the dissolution of the condo association, and a subsequent partitioning of the property.”

seized control of the condominium association board

In the process of acquiring the condominiums, Moorman has, according to the lawsuit, seized control of the condominium association board along with six “co-conspirators,” and he and the board have subsequently “substantially increased” the various fees and assessments charged to Heritage Square property owners.

Additionally, according to the lawsuit, when the previous property management firm for Heritage Square resigned from that role in December, Moorman took over management of the complex through his Fred’s Historic Properties enterprise, which the plaintiffs claim is unlicensed to serve in that role.

Since Moorman took over management of Heritage Square, he and the board have rebuffed efforts by the plaintiffs to inspect the condominium association’s books and records, the lawsuit contends.

Included in the 150-page court filing are a number of affidavits alleging that Moorman and others have been pressuring residents to sell their homes, and have taken steps to make it appear as if the homes have sold for less than what the owners actually received for the sale.

One woman alleges in her affidavit that Moorman saw her carrying groceries into her condominium from the parking lot, offered to carry them inside for her, and once inside the residence, began talking with her as he put her groceries into the refrigerator.

“Once he made it inside, I realized that his intentions were not sincere,” the woman wrote. “Moorman told me that he would give me $70,000 for my condo and that he would give me more money in addition to the sales price. He asked me to keep this a secret, as he did not want other people to ask for more money.”

Eventually, according to the woman’s affidavit, Moorman “became angry and seemed impatient” and told her “he already owned enough of Heritage Square to go to court and have all the owners evicted.”

used “straw buyers” to acquire units

Other affidavits allege that Moorman, to whom a number of Heritage Square residents indicated they did not want to sell their condominiums, on occasion used “straw buyers” to acquire units.

A woman who sold her Heritage Square residence in 2009 said she was initially approached by a woman who claimed to work at the nearby Piedmont Athens Regional Medical Center and thought the condo would be perfect for her partner and their son.

“After the condo was sold, I found out from a former neighbor that the couple who was claiming to buy the property were not the ones who ended up with it,” the woman contends in the affidavit. “Fred Moorman had acquired the condo by sending them to act as buyers. It’s my understanding that either he or she, or both, worked for Moorman at the time and had no intention of buying the property for themselves.”

The plaintiffs are being represented by Athens attorney John Hollis Baker, who according to one of the plaintiffs has asked that they not speak with the media.

Baker did not immediately return a Wednesday telephone call seeking comment on the filing.

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