Bruce and Shawn Chait arrested on charges of extorting 13th Floor Investments

Father and son real estate duo Bruce and Shawn Chait were arrested on charges they tried to extort millions of dollars from Arnaud Karsenti of 13th Floor Investments, in connection to Tamarac housing communities the firm developed on golf courses once owned by the Chaits.

The Florida Department of Law Enforcement arrested the Chaits on Tuesday along with two co-conspirators, alleging they filed lawsuits falsely claiming arsenic contamination at the residential communities, threatened to send letters to the homeowners association with the same false claims, and met with Karsenti numerous times, all in a push to extort funds from him.

The Chaits were charged with one count each of racketeering, conspiracy to commit racketeering and organized scheme to defraud, as well as six counts of extortion. Bruce Chait’s bond was set on Wednesday at $10.5 million.

An FDLE affidavit says Bruce Chait harbored “ill will” against Karsenti over a Chait golf course Karsenti acquired by foreclosing on a loan a decade ago.

The Chaits, who own Prestige Homes of Tamarac, couldn’t be reached for comment. The registered agent for Prestige, attorney George Matthews of Mathews & Piazza in Boynton Beach, didn’t immediately return a request for comment.

Miami-based 13th Floor developed the 253-home Central Parc in Tamarac at 4840 Northwest 56th Court. It also recently won approval for a 397-home community on the Woodlands golf course at 4600 Woodlands Boulevard.

13th Floor Homes, a 13th Floor Investments affiliate, said in a statement that it alerted authorities once the Chaits’ motives became clear.

“The leadership of 13th Floor Homes was recently targeted by what it believes to be an illegal attempt aimed at derailing our firm’s development plans in Broward County and undermining our company’s reputation,” the company said in its statement. “We expect that the perpetrators will be held accountable. 13th Floor has spent the past 15 years cultivating a successful track record of development in South Florida, and we will fervently challenge any attempt to tarnish our credibility.”

The issue dates back to 2010 when the bank that had provided the Chaits with a loan on the property notified Karsenti that the Chaits had defaulted. Karsenti acquired the note and eventually foreclosed. Karsenti afterward bought the second golf course from the Chaits.

In the following years, Karsenti said he was harassed by the Chaits, who first in 2012 threatened to sue over false contamination allegations, asking Karsenti for $1 million, the affidavit shows. Karsenti paid at least some of the money because he wanted to stave off damage to his company’s reputation.

Still, a co-conspirator who was under contract to buy a home in one of 13th Floor’s communities in 2015 filed suit alleging arsenic contamination, seeking millions in damages.The affidavit says the lawsuit filer’s down payment was footed by Bruce Chait. This suit was eventually resolved in court in favor of Karsenti.

The Chaits also pushed for several meetings with Karsenti during which they told him the suits and threats would go away if he paid up, according to the affidavit. In a 2016 meeting, Shawn Chait told Karsenti that the elder Chait “will never stop until he gets his money,” and that “the whole situation surrounded the fact that his father felt cheated, and wanted his pound of flesh in money,” according to the affidavit.

At a subsequent meeting in 2016, the Chaits said they will dismiss their harassment campaign if Karsenti paid them $8 million, which Karsenti declined, the affidavit says.

The Chaits also sent Broward County and Tamarac city officials “libelous” letters claiming the 13th Floor development site is a “toxic landfill,” according to the affidavit.

Early this year the Chaits picked up their harassment against Karsenti, who had notified authorities, scheduling several meetings with him. At the FDLE’s direction, all meetings since February were recorded.

In a meeting this month, Shawn Chait called his father a “bulldog” and said the only way they would stop is if Karsenti paid $3.4 million, according to the affidavit. If he refused, the Chaits would file a class action suit with the goal of negatively impacting Karsenti’s Woodlands project. In a subsequent meeting, Bruce Chait demanded $250,000 in a day, according to the affidavit.

This isn’t the Chaits’ first legal trouble, as in the late 2000s they were accused of bribing Broward County officials.