Florida Attorney General Charlie Crist has launched a formal investigation into a Venice businessman who consumers say refused to sell them houses after they paid thousands of dollars under rent-to-own contracts.

Crist said the action was prompted by a recent report in the Sarasota Herald-Tribune and other information about Venice businessman Rod Khleif, whose firms own hundreds of properties and advertise rent-to-own deals in at least seven counties stretching from Tampa to Fort Myers.

Khleif's operation also has led to a series of lawsuits and complaints to the FBI.

The attorney general and the FBI are both urging consumers with complaints about Khleif's firms to contact them. "We're looking into it very aggressively," Crist said Tuesday. "It has all the indicators of a deceptive and unfair trade practice."

Crist noted that his office has received multiple fraud complaints in which potential buyers said they lost thousands of dollars. "I don't know if we've seen anything of this exact nature before," Crist said. "We won't tolerate it."

The FBI also urged those with complaints to contact its Tampa office. "If they have concerns about fraud, they should call the FBI," said Carol Michalik of the FBI. She declined to say whether the FBI also is looking into the business, saying: "I can't confirm or deny there is an investigation."

Khleif and an attorney representing him did not return messages seeking comment Tuesday.

Dozens of Florida families have signed contracts with Khleif agreeing to rent houses with an option to buy, often shelling out thousands of dollars in down payments.

But when it came time to buy their home -- sometimes after years of additional payments toward the purchase, repairs and other expenses -- many say they got nothing but a runaround and lost everything.

A spokesman said that state investigators this week began a formal probe into the businesses as the result of news reports and additional consumer complaints.

"We will be interviewing witnesses, we will subpoena documents, and follow up on the information," said Joann Carrin of Crist's Tallahassee office. She urged other consumers with complaints to contact the attorney general.

About a dozen families from across Southwest Florida say they have lost money from down payments, monthly purchase checks and remodeling work they invested in homes they expected to own. At least two dozen have been evicted.

Tom Marcoux, a single father who lives in North Port with his two sons, filed a complaint with the attorney general last week after reading about Khleif in the Herald-Tribune.

Marcoux said he lost more than $6,000 attempting to buy houses in Punta Gorda and Port Charlotte under lease-purchase contracts with Khleif's firms.

"I thought I was the only one, but it seems like he's done it to a lot of people," said Marcoux.

Marcoux said Tuesday he had been interviewed by an investigator from Crist's office and was thrilled the attorney general is looking into it. "I think it's great," he said. "Hopefully he'll do something to keep him from hurting other people."

Dorothy Borges, an Englewood woman who filed a complaint with the attorney general, said she also was denied a chance to buy her rental home. Borges was evicted a month later and lost $18,000, according to her complaint.

Khleif, a Casey Key millionaire who has told associates he owns more than 700 homes, has insisted he has done nothing wrong. He said home sales generally are canceled because of credit problems and unpaid rent, and he's entitled to keep tenants' down payments.

But legal experts say Khleif's lease-purchase contracts are one-sided and crafted to keep people from being able to buy a home. University of Florida law professor Jeffrey Davis, a national expert on contract law, called Khleif's contracts "a wide-ranging abuse."

Under Khleif's contracts, hopeful buyers can be evicted with three days' notice for anything from late rent to not making repairs. Tenants are responsible for all repairs under $3,000.

Khleif has operated for years with little scrutiny. Records show Khleif reigns over a tangled web of hundreds of land companies, partnerships and trusts -- including Affordable Property Management and Gulf Coast Management -- based out of an office at 1531 S. Tamiami Trail in Venice.

Before coming to Sarasota, Khleif was in the real estate business in Littleton, Colo., with Gino Snow, who in 1980 was sentenced to three years in prison after pleading guilty to federal fraud charges in a condo financing scheme.

Khleif has said he was absolved of any wrongdoing, but when asked under oath in a Sarasota lawsuit if he had been charged with a crime, Khleif answered: "I don't recall."


originally posted July 28,2006

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