Criminal Complaint for Fraud Filed Against Habitats Realty and Pacific Sky S.A.
Saturday, December 08 2007 @ 12:24 AM UTC
Contributed by: Don Winner
By DON WINNER for Panama-Guide.com - Today I accompanied US expat Jim Hansen to the last of a series of meetings with Panama's Auxiliary Prosecutor in the offices of the Judicial Technical Police (PTJ). He filed a criminal complaint against Habitat's Realty and the developers of the Pacific Sky S.A. building for criminal fraud. Basically, to make a long story short, Hansen alleges that he purchased a 220 square meter penthouse in 2005 for $184,000, or $836.00 per square meter, and that now the developers are trying to screw him out of the property, which is worth a great deal more, so they can sell it themselves and realize that profit. He got a good deal back in 2005 and in effect he's sitting on a great deal now. Habitats and the developers of the Pacific Sky building respond by saying that Hansen failed to comply with elements of his contract, and therefore they are canceling his contract and returning his deposit. Hansen is also filing a civil complaint for damages, and to force Habitats and the developer to comply with the contract as written. (more)
Had To Hold Fire: Jim Hansen contacted me months ago with regards to his situation and I've been following what's been going on. He went ahead and filed a criminal complaint alleging fraud which could possibly carry a five year jail term for those involved if they are eventually found guilty. In these kinds of cases the Auxiliary Prosecutor holds a series of meetings with both sides to try to get them to come to an agreement in order to avoid a legal conflict if possible. There were several meetings, two of which I attended, held at the offices of the PTJ. Today was the last of those meetings, and I was obliged to keep my mouth shut until after that was over. Until today there was a possibility that Habitats Realty and Pacific Sky S.A. would make an offer acceptable to Jim Hansen and it would all go away. But, unfortunately, that didn't happen.
"I Want To Buy A Condo" Last week I wandered into the offices of Habitats Realty in Marbella and asked them if they had any units left in the Pacific Sky building. They said they had one unit left, on the 16th floor, measuring 110 square meters. They quoted me a price of $190,000 for that apartment, or $1,727.27 per square meter. They also told me that the building was almost ready to be delivered, and that they would be taking possession of the property by 31 December 2007, which is questionable just by looking at the current construction status of the building. Jim Hansen's apartment is a two-unit penthouse on the 24th floor measuring 220 square meters. Using the price Habitats Realty quoted me for the unit on the 16th floor as a base, Hansen's apartment is now worth at least $380,000. Or, put another way, it's now worth about $196,000 more than what he paid for in (in the contract.) Obviously, there is an enormous financial incentive to "squeeze" Jim Hansen out of his pre-construction contract.
Ready To Go To The Mat: Jim Hansen is mad as hell. Habitats Realty and the developer of the Pacific Sky building simply made a bad business decision and signed a contract with him to sell him that apartment at the specified price. They then took his (and others) pre-construction contracts to the bank and used them to secure the financing to actually build the building. Now that it has been built and actually exists, they want to give Jim his deposit back and get him to go away. They really don't care if he goes away mad, but they really want him to just go away. Then, free of that little problem, they will turn around and sell the apartment at the current prices, making almost $200K more in profits. Faced with this reality and armed with a whole bunch of paperwork, Jim is ready to go the distance in the Panamanian legal system to get what he considers to have coming to him.
"Let's Do Business" In the negotiations today with the lawyers representing Habitats Realty and the developers, they kept trying to get Jim Hansen to agree to enter into a business agreement that, as far as they were concerned, would be mutually beneficial. They suggested that they resell the apartment at current rates and split the profits. Jim's response to that was basically "why should I agree to give them half of what I have coming according to the contract?" He declined their offer.
Threats To Keep The Deposit: Originally when all of this started the lawyers for Habitats Realty threatened to "screw him over" if he filed a criminal or civil legal complaint. They said that they would simply keep his deposit and tie the whole thing up in court for years and that he would never see a dime. Thankfully, Panama's National Assembly recently passed Law 45 which contains elements regarding "abusive clauses" in contracts, and as a result their threats have lost a whole lot of "punch." Basically, everyone in Panama knows what the developers are pulling, and they are trying to reel them in.
Buy It For $1,100 Per Square Meter: The next position adopted by the lawyer was to offer to "resell" the apartment to Jim for $242,000 or $1,100 per square meter. He again said "no thanks" considering that he already has a valid contract to buy the exact same property for $184,000. Why should he hand an additional $58,000 over to them? They made a bad deal, and that's too bad for them, but Jim thinks that he should not have to be penalized for the mistakes made by Habitats Realty and Pacific Sky S.A. So again, he said "no thanks."
"We'll Give you $102,000" The next offer from the lawyer representing Habitats Realty and Pacific Sky was to pay Jim Hansen a total of $102,000, or just $7,000 more than he as already paid as part of the payments he has had to make according to the contract. In other words, we will return all of your money plus $7,000. Again, Jim said "no thanks."
"It's Not Us, It's The Developer" Jim has one communication that he received several months ago from someone in Habitat's Realty in which they said that all of these tactics are not being done by them, but rather they are being forced to follow the instructions coming from the developer, Pacific Sky S.A. Jim's response was "That's nice, but they are both on the contracts, so they both get sued." Next.
Criminal Suit Going Forward: Jim Hansen's criminal case is now going to proceed to the Prosecutor's office. There, they will call witnesses, take statements, conduct their own investigation, study the applicable law, and prepare the case to go forward to a judge for a criminal trial. As part of the complain Jim Hansen as asked for a special sequestering of the apartment in question to keep Habitats Realty and the Pacific Sky developer from trying to sell it again to someone else. In addition, Jim asked to have the bank accounts sequestered of all the individuals involved, specifically the owners and principle people in Habitats Realty and Pacific Sky, to make sure that when the issue of civil damages comes around that there's money in the accounts to receive damages.
"It's Not A Criminal Issue" The lawyer for Habitat's Realty and Pacific Sky said on several occasions that this matter should not be a criminal case, and that the issue should be handled according to Panamanian civil law. The Auxiliary Prosecutor disagreed. When I went into the offices of Habitats and asked them about the (dozens of) similar complaints that I'm hearing about from others who have been affected, they said that "in every case the buyers have violated some element of the contract." The problem arises when a promoter, developer, or real estate company provokes that non-compliance by saying something verbally like "oh, it's ok, you dont' have to worry about making that last payment by the end of the month. Don't worry about it." The (dumb and ignorant) buyer who doesn't know that he's being set-up believes what he's being told and just lumbers along, doing what he thinks to be right. Then, when the building is all ready to go, he gets a simple note from the developer saying they are canceling the contract due to some little technicality that they, in reality, created thanks to what they told the client verbally. In fact, they intended to create the situation of non-compliance from the start. That is both illegal and fraudulent. It appears that Habitats Realty and Pacific Sky are going to have their hands full, try to prove that each and every one of these litigants failed to comply with an aspect of the contract, and that they are not conducting a coordinated campaign to screw people out of what they have coming to them according to the pre-construction sales contracts.
I'm Going To Be Writing About This, Often: When I was in the offices of Habitat's Realty, I let them know that I was going to have to be talking about them, both often and loudly. Let me add here that I have not had any business dealings with this company. They do not, nor have they ever, advertised on my website. I have never bought any property through them. And, I have no interest in doing any damage to their business. In fact, I think it's a damn shame that businesses in Panama are apparently and allegedly pulling these kinds of tactics. I mean, there's literally billions of dollars being made in this market. These kinds of conflicts do harm to Panama in the eyes of international investors who have to be concerned about the contract they are signing today. Will the builder comply with that same contract in two years when the construction is complete, or will I have to spend time sharpening my legal knives beforehand. I simply let them know that I was both aware of what's going on, and will be writing about it, often. With that having been said, it's not my fight.
Let's See What The Judge Says: In the case of Jim Hansen, his criminal complaint will now proceed. There is no turning back once you file a criminal complaint in Panama. I have no idea why the owners of Habitats Realty and Pacific Sky would risk five years of fun in La Joya for a few (more) thousand dollars - I guess they think it's worth it, and that they have a good legal case. I would suggest this - how much would you be willing to pay (or, not get) in order to avoid the possibility of five hard years in La Joya? This criminal fraud complaint, if successful, should scare the daylights out of these guys. And what if the dozens of other people in the same situation take the same route? In the end all of these cases come down to the details as presented by both sides, lots of legal maneuvering, and a judge in the middle who will break the tie. From what I've learned of the Panamanian legal system, they are slow as hell but in most cases they usually get the right answer in the end. If I had to choose a bag to be holding in this case, it would be Jim's.
Civil Case Pending: Next week Jim will be filing his civil case as well. In this case he will be asking for damages caused by all of these actions by Habitats Realty and Pacific Sky to try to allegedly screw him out of the apartment they agreed to build in the contract. And again, he will be sequestering the apartment in question and other assets until the case is decided. The two cases will be running concurrently.
A Rising Tide: There are hundreds if not thousands of people who are in Jim's position right now. All of those buildings which are about to reach completion in Panama City - every one of them was sold at a cheap price in a pre-construction contract. People are getting "squeezed out" all over the place, and I have been contacted by literally dozens of people in similar circumstances. Some just take their deposit back and decide not to fight. Some make a kind of deal, such as paying more for the apartment, or taking an apartment in another building. But for the most part people don't tend to have the bulldog tenacity it takes to fight it out, and that's an element the promoters and developers are counting on. Again, they want you to just go away.
Is This Happening To You? Are you in a similar position? Are you holding a pre-construction contract for an apartment you purchased a long time ago that is supposed to be delivered shortly? Make sure you comply strictly with the letter of the law. IGNORE what you are told verbally by real estate agents and developers, especially if it's something having to do with your compliance with an aspect of the contract, payments required, etc. And you can also ignore things that they just make up out of the clear blue sky, like "you have to pay us a whole bunch of money right now or we will cancel your contract." Just comply with what the contract says and ignore the rest - it's all probably just meant to try to get you to walk away.
Hire Competent Legal Counsel: And here the key word is competent. Any schmuck can get your pensionado visa, but you want to make sure you have someone who is really sharp to keep you out of trouble in these kinds of issues. And, you will be needing someone who will go to the mat when the time comes. If you find yourself facing a court battle, I can recommend my personal criminal lawyer (who is undefeated in all of my cases) for the really hard stuff.
(Machine Translation of Complaint Filed) - What follows is a copy of the criminal complaint filed by Jim Hansen in this case. This is a machine translation (which I have not taken the time to clean up) but in any case you can get the drift of what's going on. The message is this - if you're in a similar situation, you don't have to just roll over that take it. There are things you can do to fight for your rights.
PENAL PROCESS COMPLAINS AGAINST PROMOTORA PACIFIC SKY, S.A. and HABITATS REALTY Group Inc., BY CRIME AGAINST the PATRIMONY (SWINDLE), IN DAMAGE DE JAMES ANDREW HANSEN.
HONORABLE SIR DIRECTOR OF THE CENTER OF RECEPTION OF DENUNCIATIONS OF JUDICIAL THE TECHNICAL POLICE OF PANAMA:
We, CHUNG, BRANCHES, CREEK & ASSOCIATED and GUADALUPE E. TEJERA V., practicing attorneys, of generals described in the power that he precedes, concurred before you, with the had respect, previous to be able granted by JAMES ANDREW HANSEN, whose generals also consist in cars, in order to formalize PENAL COMPLAINT in their name and representation, according to articles 2002 and 2003 of the Judicial Code and Law 31 of 28 of May of 1998, that talk about the Protection of the Victims of the Crime, against HENRY M. MIZRACHI, man, Panamanian, of legal age, with personal identity card N° 8-703-2203, which according to contract of transaction promise adduces to act in name and representation of PROMOTORA PACIFIC SKY, S.A., enrolled joint-stock company to Card 473029, Document 720841 of the Mercantile Section of Microfilms of the Public Registry, with offices in Street 2°, Carrasquilla, Durex Building, of the District and Province of Panama, with telephone 209-8888 and RAMY ATTIE, man, of legal age, whose generals we do not know, in its quality of President and Legal Representative of before mentioned joint-stock company and HAIM BASSAN, man, Panamanian, of legal age, whose other generals we do not know, as its president and legal representative of INC. HABITATS REALTY GROUP, joint-stock company, registered a Card 438392, Document 519693, of the Section of Mercantile Film of the Public Registry, with offices in Street 53 Obarrio, Building Hi Tech Plaza, Ground floor, telephone 265-3030, by the crime AGAINST the PATRIMONY (SWINDLE), tipificado in the Chapter IV, Title IV, of Libro II, specifically in article 190 of the Penal Code, assignment in its damage.
WE BASED THE PRESENT COMPLAINT ON THE FOLLOWING TERMS:
FIRST: That day 4 of August of 2005, our mandante subscribed a contract of Promise of Transaction with PROMOTORA PACIFIC SKY, S.A., represented by Mr. HENRY M. MIZRACHI, in who this was committed to sell the resultata property to him that of the segregation of the apartment identified with number PH 24-AB, with a total surface of TWO HUNDRED TWENTY SQUARE METERS (220 MTS.2), located in PROJECT PACIFIC SKY. In this contract the promoter decided to grant the deed of sale by means of which the property from this apartment to our mandante in a nongreater term of sixty (60) days after the date of the occupation permission was transferred of the building and the inscription of the Regulations of Horizontal Co-Property in the Public Registry. In this contract the promoter decided that the work would be ready to be given but taking in August of 2006 and that in any case, by reasons due to unexpected circumstances or of greater force, she could have delays in the work, this could extend the date of delivery until a maximum of six (6) months additional, which won in February of 2007.
SECOND: That the sale price decided by our mandante and this promoter of the apartment identified with number PH 24-AB, located in PROJECT PACIFIC SKY, is of ONE HUNDRED EIGHTY AND FOUR THOUSAND THREE HUNDRED DOLLARS WITH ZERO HUNDREDTH ($,184, 300,00), that is to say, to a price average of EIGHT HUNDRED THIRTY AND SEVEN DOLLARS WITH 72/100. ($. 837.72) the square meter, which would be paid of the following way:
1. An installment of TWO THOUSAND DOLLARS WITH ZERO HUNDREDTH ($,2, 000,00), to the company/signature of the contract.
2. An installment of NINETY THOUSAND DOLLARS WITH ZERO HUNDREDTH ($. 90,000.00), to but taking the ten (10) of August of 2005.
3. A final installment of NINETY AND TWO THOUSAND THREE HUNDRED DOLLARS WITH ZERO HUNDREDTH ($. 92,300.00), to but taking the thirty (30) of June of 2006.
THIRD: That our mandante made the payments corresponding through checks and banking transferences in favor of the promoter and with approval of the company HABITATS REALTY (HABITATS REALTY Group Inc.), which through its representatives of sales, specifically ADRIANA MENDELSOHN, maintained communication with our mandante to require the pending payments to him. Our client made the payment of the installments one and two, that are described in the previous clause and the last payment the company received the check, which maintains in his power, but that to the date has not made it effective, with the argument that was made behind schedule. However, they have not either fulfilled the downtime of the apartment, whose initial term era in the month of August of 2007 and extensive one until February of 2007, that they have not fulfilled it either.
QUARTER: Nevertheless, now they try, adducing a contract breach of our mandante, to declare resolute the contract and to remain with the money that this payment by this apartment. When really these communicated to him through their representatives of sales, via telephone electronic mail and, the date of the last payment in later date and they received it. Additionally she is the promoter, the one that has not fulfilled the terms of the construction of the building and the delivery to our mandante of the apartment in the stipulated date, even though that already received the corresponding payments on the part of our mandante.
FIFTH: That the fraudulent conduct, had with criminal deceit, on the part of the companies PROMOTORA PACIFIC SKY, S.A. and HABITATS REALTY (HABITATS REALTY Group Inc.), in damage of our mandante is in evidence, when instead of suscrbir the contract of transaction of crossing of the apartment before alluded to our client and to give it to it in the decided date, proposes to him that: If it wants the apartment it will have to pay to THOUSAND ONE HUNDRED DOLLARS WITH 00/100. ($,1, 100,00) the Square meter; in its defect to put under it reventa at the cost of THOUSAND ONE HUNDRED DOLLARS WITH 00/100. ($,1, 100,00), distributing the gain obtained to equal parts and finally to give back its money to him paid with the interests. This demonstrates to the bad faith and unsuitable conduct from these companies, which surely or used the money of our mandante in the work and now comfortably it tries to not know the content of the contract, thus to obtain a profit additional to or obtained by the use of the money of our mandante, trying to sell the departmental unit to him to a greater price to the decided one or to resell it to third, to obtain additional gain. Its objective, to make believe him to the authorities that the money with its interests fraudulently does not act when giving back, when in fact, already it used and it used the money of our mandante to carry out the work and now is to him a better business, to give back the money to him, although it is with interests and to resell the apartment to another client to a superior price. From, the fraudulent conduct arises there and criminal of the same ones, in damage of our client, which not only has perceived economic damages of direct part of these companies, but that by reason for the conduct of the same ones, has had to incur other additional expenses to have where to live, product of does not give much more of the apartment in the decided date and now that they do not want to him to transfer the apartment that it bought.
SIXTH: That the penal conduct committed by the defendants is tipificada in article 190 of the Penal Code, whose legal content is as it follows:
“Article 190: The one that by means of deceit is procured to himself or a third illicit benefit in damage of, will be sanctioned with prison from 1 to 4 years and from 50 to 200 day-it fines.
The sanction will be of 5 to 10 years of prison, if the patrimonial injury exceeds one hundred thousand balboas or proxies, managers or administrators in exercise of their functions commit, or if he is committed in damage of the public administration or an establishment of charity. “
SEVENTH: In regard to the previous thing we considered that HENRY M. MIZRACHI, man, Panamanian, of legal age, with personal identity card N° 8-703-2203, which according to contract of transaction promise adduces to act in name and representation of PROMOTORA PACIFIC SKY, S.A., enrolled joint-stock company to Card 473029, Document 720841 of the Mercantile Section of Microfilms of the Public Registry, with offices in Street 2°, Carrasquilla, Durex Building, of the District and Province of Panama, with telephone 209-8888 and RAMY ATTIE, man, of legal age, whose generals we do not know, in its quality of President and Legal Representative of before mentioned joint-stock company and HAIM BASSAN, man, Panamanian, of legal age, whose other generals we do not know, as its president and legal representative of INC. HABITATS REALTY GROUP, joint-stock company, registered to Card 438392, Document 519693, of the Section of Mercantile Film of the Public Registry, with offices in 53 Street Obarrio, Building Hi Tech Plaza, Ground floor, telephone 265-3030 and ANY OTHER PERSON who are involved, they must be investigated and be sanctioned by the crimes AGAINST the PATRIMONY (SWINDLE), tipificado in Capitulo IV, of Titulo IV, Libro II of the Penal Code, assignment in damage of JAMES ANDREW HANSEN.
By the exposed thing, we asked for with the greater one of the respect the Instructional Agent to him of the Cause, it initiates the pertinent investigations, IT ADMITS the present complaint and it is had to us like part in the process with all the obligations and rights established in the law and the opportune moment, it asks for before the judge of the cause the sentence of the defendants.
PENAL AND SPECIAL REQUEST OF KIDNAPPING:
We solicitd him to distinguished agent instructional of cause, which it asks for to the juzgador the kidnapping penal of the banking accounts of savings, current or fixed term that the defendants maintain in the banks of the locality, mainly in: National Bank, Savings bank, General Bank, Banistmo, H.S.B.C. Citibank, Bank Bilbao Biscay Argentaria (B.B.V.A), Global Bank, Atlantic Bank, Universal Bank, Continental Bank, Banvivienda, Mercantile Banistmo, Bank One, Scotiabank, Allied Bank, Aztec Bank, Bank of Bogota, Bank Delta, Bank the International of Costa Rica Panama (BICSA), Santander Bank (Panama), Chinese Bank of, Bac Panama, Bancolombia (Panama), The International Commercial Bank Chinese Of, Towerbank, Multi Credit Bank, MetroBank, Bank Cuscatlan Panabank and Credicorp Bank, according to article 2051 of the Judicial Code, to effect that the defendants do not have the money removed our mandante of fraudulent way.
Of equal way that possibly communicates to PROMOTORA PACIFIC SKY, S.A. and HABITATS to him REALTY (HABITATS REALTY Group Inc.) and to the Public Registry, that the Apartment identified with number PH 24-AB, with a total surface of TWO HUNDRED TWENTY SQUARE METERS (220 MTS.2), located in PROJECT PACIFIC SKY. it is outside the commerce, until as much the responsibilities and the present process are defined.
We solicitd orders the conduction and later police custody of the defendants, with the object of guaranteeing its presence in the process and are responsible for the investigated fact, since this in its agravated modality it contemplates minimum pain of prison of five (5) years, if the patrimonial injury exceeds ONE HUNDRED THOUSAND DOLLARS ($,100, 000,00).
1. Copy of the Contract of promise of transaction, subscribed between our mandante and HENRY M. MIZRACHI, man, Panamanian, of legal age, with personal identity card N° 8-703-2203, in name and representation of PROMOTORA PACIFIC SKY, S.A., with its translation to the Spanish language by Authorized Public Translator, who appears with her original one for his I collate.
2. Copy of the Act of 2 of July of 2007 and of the demand interposed by our mandante through judicial proxy in the NATIONAL DIRECTION OF SUBJECTS OF the CONSUMER AND DEFENSE OF the COMPETITION.
We solicitd celebrates to this office in order that it sends authenticated copy complete of this file, identified like 188-07C.
3. We contributed original of the certifications of Registro Público de PROMOTORA PACIFIC SKY, S.A. and HABITATS REALTY Group Inc.
4. Copy of the Check N° 1674 of 8 of April of 2007 of U.S. BANK, turned by our mandante in favor of PROMOTORA PACIFIC SKY, S.A., by the sum of NINETY THOUSAND DOLLARS ($. 90,000.00), where it can that this was received.
5. Copy of the Note of 27 of September of 2006, subscribed by MITZIE DE LASSO, Contadora de PROMOTORA PACIFIC SKY, S.A., directed to our mandante where it indicates to him that they have decided to declare resolute of right plenary session the Contract of Transaction of the Apartment before described. We asked for this is called to declare and to recognize this document.
6. We solicitd is mentioned to declare ADRIANA MENDELSOHN, who can be located in the offices of this company with the object of which she responds and she informs everything what knows with respect to the present case and responds interrogation that opportunely we will do to him.
7. We solicitd orders levelling to the offices of PROMOTORA PACIFIC SKY, S.A. and HABITATS REALTY Group Inc., in order to obtain copy of all the documentation and information related to PROJECT PACIFIC SKY and the contract of subscribed promise of transaction to our mandante and other clients.
8. We solicitd celebrates to Municipal Engineering and the Ministry of House in order that it informs if PROJECT PACIFIC SKY, fulfilled all the permissions, legal approval of planes and other requirements to develop he himself. Of being thus, it indicates date with the object of establishing if it initiated the promotion and presale of he himself before fulfilling the approval.
9. Electronic mails crossed between our mandante and personnel of PROMOTORA PACIFIC SKY, S.A. and HABITATS REALTY Group Inc., with its due translation to the Spanish language.
10. Opportunely we will adduce and present/display the other tests that we consider
STRAIGHT: Articles 190 and other concordant ones of the Penal Code. Articles 2000, 2051 and other concordant ones of the Judicial Code. Law 31 of 28 of May of 1998, that talks about the Protection of the Victims of the Crime.
Panama, 4 of September of 2007. Kindly,CHUNG, BRANCHES, CREEK & ASSOCIATED LCDO. MELVIS A. BRANCHES R. Ced. 8-378-824 LCDA. GUADALUPE TEJERA Ced. 8-338-955
(End of Machine Translation)
Copyright 2007 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.