DAVENPORT – Like a lot of people in Britain, Tom Monaghan harbored dreams of moving to the United States and retiring here.
“People want to come over here to this country, the greatest county in the world,” Monaghan said, over lunch at a restaurant in ChampionsGate, not too far from his home in Davenport.
The challenge was figuring out the best way to get here. Obtaining a green card isn’t easy, Monaghan noted.
“The visa requirements are very onerous and expensive,” he said.
But he did find another option: getting an E2 visa, given to Europeans who start a business in the United States that creates jobs here and adds to the local economy.
“If you’re a foreign national and want to come into this country, you either need a job or you’re a student, or you need a sponsor,” Monaghan said. “If you want to come into this country and don’t have a job, you can start a company here. You have to add to the American economy. That’s how the system works here in America.”
Monaghan thought he had the perfect opportunity to do that when two British residents living in Central Florida, Adrienne and Edward Henry, approached him with what sounded like a great opportunity: invest in a business they had up and running in Davenport called Florida Homes International, located on U.S. 27 at Ridgeview Plaza. Monaghan decided to jump at the opportunity, and ended up investing $1 million of his own money in the company. He got his E2 visa, relocated to Florida, and bought a home in Davenport. The business was a vacation home property management firm, one of the fastest growing fields in this region.
Everything seemed perfect.
Only, it wasn’t.
“What I discovered was they were crooks,” Monaghan said. “They were ripping me off.”
On Saturday, Sept. 10, the Henrys were arrested by the Polk County Sheriff’s Office and charged with multiple counts of racketeering – three first degree felonies and six second degree felonies. Bond was set at $105,000 each, and they must show that the funds come from a legitimate source. If they get convicted, they face years in prison.
As for Monaghan, he sees little victory in their arrest. He was forced to shut down the business last May because the Henrys, he said, simply stole too much of the operating money to make it profitable. And he’s lost everything he invested in it.
“It was not a viable business,” he said. “It was a Ponzi scheme. The business ran out of new investors and went belly up, and that meant I would be deported because the business failed.”
Monaghan was living in Britain when the Henrys approached him about being a silent partner in their Davenport business. That was in 2005.
“I had some people I thought were friends who conned me, saying they were investing money in their company,” he said. “They said they could help get a green card if I invested in their company.”
Lured by his dreams of retiring in the U.S. and running a business there, Monaghan agreed and started writing the checks. At first, it all seemed to work out.
“They got me an E2 visa in 2007,” he said.
But an E2 visa only applies for two years, then has to be renewed — assuming the business is still operating successfully. If not, the owner could be sent back to England.
So Monaghan pushed to get an Eb5 investor visa that allows me to stay in this country permanently — but to do that, he needed to invest a significant amount of cash into the local business venture.
“You have to invest a lot of money into an enterprise and create jobs for Americans,” he said. “I had to put in $700,000, and then I had to bring it up to $1 million.”
The company had 10 employees, and the Henrys gave Monaghan documentation indicating they had a 50 percent share of the company, “which they gave me on paper, but it was all lies,” he said. “They didn’t own it. They told me they owned the company, but they didn’t.”
At the time, though, in 2009, Monaghan didn’t know this. But he began to get suspicious when the Henrys repeatedly came back to him for more and more money.
“They were looking for more money out of me to keep the company going,” he said. “I was a bit stupid because I trusted them.”
Part of their argument was to prey on Monaghan’s fears of being deported if the business failed, said Monaghan’s attorney, Paul Mascia.
“That was part of the scam,” Mascia said. “They preyed on ther fact that he would be deported if he didn’t pump more money in. They get you for everything you are worth, and then you get deported when the business fails, because you’re back in England and can’t chase after them, so they get away with it.”
Finally Monaghan started investigating what the Henrys were doing with his funds, and came to a shocking discovery: the couple he had trusted so faithfully had been spending those investment funds on themselves, not the business.
“They were stealing the money I had invested in the company,” he said. “They spent $400,000 of it. They spent it on jewelry and vacations and HOA (home owners associations) dues.”
They also were booking people in the vacation homes and failing to report that income, Monaghan said.
“They take the rent off the vacationers and won’t even tell you they were in the house,” he said.
Stunned, Monaghan fought back in court.
“They just were crooks,” Mascia said. “I think that they knew they did wrong, and I think their best defense was to play stupid, and say ‘What do you mean, what did we do wrong, everyone in the real estate industry is hurting.’ The reality is they used his money to fund an expensive lifestyle. Much of it went into their own real estate investments and personal home and jewelry. We put together the forensics on all their spending to show very clearly they were doing that, misappropriating escrow monies and running a whole host of improper expenditures through escrow accounts.”
“I filed a lawsuit against them, and won a civil judgment against them for $944,000,” Monaghan said, adding that he ended up inheriting the business as a result.
“In May 2010, I took over the business and was awarded 100 percent of the shares of the business,” he said. But there wasn’t much money left – the Henrys had spent it all, he said.
“I got $5,000 out of their bank account,” he said. “They were living off their U.K. pensions.”
“They had already run it into the ground by that time,” Mascia said. “He did his best to keep it going, but at the end of the day it was not recoverable, and unfortunately his investment was gone, and that’s really the sad story of someone who trusted these people.”
Today, Monaghan is retired, still living in Davenport, and fighting to stay in the United States now that his business has failed. He’s applied for a special U Visa, providing legal status to immigrants who have been a victim of crime here in the U.S.
“America doesn’t want to see the crooks get away with it,” Monaghan said.
By going public with his story, Monaghan said he hopes to spare other potential victims of these scams, particularly British and other Europeans who are told that their ticket to a great life in the United States begins with investing their life savings into a local business.
If they do decide to go that route, Monaghan said, he urged them to require monthly or quarterly financial reports from the people operating the business, and added, “The most important thing is to get a good, experienced, trustworthy lawyer.”
Mascia agreed, saying “You need to have independent legal counsel on the front end representing you through the entire process. Often you get these immigration attorneys who are middle men who are putting investors together with companies, and not giving a clear representation of the facts. Unfortunately for Tom, it wasn’t done right. He was constantly backpedaling.”
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