Carlisle Development Group, the V.I. government’s contractor building St. Croix’s Louis E. Brown Villas, is under federal investigation for allegedly padding construction costs to defraud the U.S. government out of millions of dollars in tax credits, according to the Miami Herald.
No charges have been filed and Carlisle Development disputes the allegations. According to Government House, the V.I. government is not at risk in any way with regards to the Carlisle Group.
“Carlisle intends to cooperate fully with this investigation and looks forward to a speedy resolution so it can get back to helping provide affordable housing for Miami’s neediest," Carlisle’s attorney Jeff Marcus said in a statement last week. "The company is proud of its track record, which includes low-income housing over 13,000 residents, including working families, the elderly, youth aging out of foster care and the formerly homeless," Marcus continued.
Founded in 1998, Carlisle Development Group is one of the largest tax credit developers in the country, with more than 80 projects representing $1.4 billion in total development costs, according to materials from the company.
Citing "sources familiar with the federal probe," Jay Weaver of the Miami Herald reported May 4 that the federal government suspects Carlisle of defrauding the government of tax revenue by padding construction costs of rental apartments to increase the dollar value of federal Low Income Housing Tax Credits localities use to pay much of the construction costs.
The V.I. Housing Finance Authority is financing 244 one- to three-bedroom units for families and seniors at Louis E. Brown Villas with $20 million worth of the same Low-Income Housing Tax Credits that are at issue in Florida. The U.S. Department of Housing and Urban Development also provided $12 million in direct funding. Some of the units are already filled and the project is scheduled to be completed later this year.
The Miami Herald reported that a U.S. grand jury issued subpoenas in January and is focusing on Carlisle Chief Executive Officer Matthew Greer, retired CEO and founder Lloyd Boggion, and general contractor Michael Runyon. The Miami Herald report makes no mention of projects outside of Florida.
Government House spokesman Jean Greaux Jr. told the Source on Thursday that the governor "has been assured by Robert Graham of the VIHA that the Virgin Islands government is at no risk at all as regards Carlisle Development Group and the Louis Brown Villas project on St. Croix."