Athens condo owners sue developer and others, alleging violations of state RICO Act
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.