The Latest on Councillor Decker’s Real Estate Travails- Part II

The Latest on Councillor Decker’s Real Estate Travails- Part II

This is a follow up to recent post The Latest on Councillor Decker’s Real Estate Travails. It will make more sense if you have read the previous post.

Raymond Bandar also filed Civil Action No. 10-2507, in which he asks for declaratory judgment as to who the beneficiaries and trustees of the 63 Walden Street Trust are and, consequently, who has the right to pursue the Decker litigation, i.e. Civil Action 10-1500. Defendant Decker’s answer to this complaint essentially pleads ignorance of the details regarding this trust. The interesting thing here is Walsh’s Answer and Counterclaim/Third Party Claim of William Walsh, Ogunquit Development Corporation, First Camreal Corp., and Muireann Glenmullen.

There are four new properties referenced in this counterclaim,17 Brewster Street, 19 Brewster Street, 63 Walden Street, 19 Highland Avenue.

The 16 count counterclaim demands a forensic accounting, alleges unjust enrichment, demands declaratory judgment, and alleges breach of fiduciary duty for each property. Allegations of fraud are included on two.

The basic pattern sketched by this document is an accusation that for all four of these properties there was a trust set up in which Bandar, Walsh,and Glenmullen all had equal beneficial interests, then Bandar improperly took control of the trusts, stole money and refused to account for the funds. In the claims relating to some of these addresses, there is the accusation that Bandar distributed some of the disputed money to “other unnamed investors”. That’s an ominous statement. Bandar never mentions them, and no other information is given as to their identity.

In the recitation of alleged evildoing with regard to 19 Highland Avenue, the following statements summarize the pattern.

“34. On July 1, 2005, a Declaration of Trust was recorded at the South Middlesex Registry of Deeds for the 19 Highland Avenue Trust (the “Highland Trust”). That same day, the Highland Trust purchased a single family home at 15-17-19 Highland Avenue in Cambridge for $1,026,000 with plans to renovate the home, divide it into condominiums and construct an additional condominium unit on the property.

“35. The Highland Trust was established as a nominee trust. Its trustee was Camreal and its beneficiaries were Ogunquit [Walsh], Leinster [Glenmullen], and Bandar. Each of the three beneficiaries held a 1/3 beneficial interest.

“36. The Highland Trust borrowed money from a private lender [Marant, Inc,] to finance the purchase of the property and to fund construction.

“37. Bandar was responsible for maintaining the Highland Trust’s bank account.

“38. After completion of the renovations, the Highland Trust sold the three units at its property. These three units sold for a total price of $3,070,000.

“39. These sales generated a profit for the beneficiaries of the Highland Trust, net of the cost of acquisition, construction, interest, and related expenses, of more than $800,000.

“40. Bandar distributed $35,000 to each of the beneficiaries from the proceeds. Bandar then refused to distribute the remaining profits, totaling approximately $700,000 to the beneficiaries.

“41. Bandar claimed that the remaining proceeds were required to pay off other unnamed investors who invested in the project at Highland Avenue and in other projects with which that [sic] the parties were involved.

“42. Upon information and belief, Bandar retained the profits from the Highland Trust for his own benefit.”

Later on, under COUNT XIII (Accounting-Highland Trust):

“98. Plaintiffs in Counterclaim/Third Party Claim are entitled to a forensic accounting to determine how and where monies that were deposited into these accounts were disbursed or otherwise dissipated.

“99. Without a forensic accounting, Plaintiffs in Counterclaim/Third Party Claim will continue to be harmed.”

So what is really going on here and how does it involve our Councillor? Remember that all the statements quoted or paraphrased here are those of parties involved in the litigation and may or may not be true. It’s all that we have to go on, though, so all we can do is speculate. If the forensic accounting is done and included in the public record, we might learn, for example, what happened surrounding the acquisition of the Walden Street unit by Ms. Decker. The HUD Settlement Statement that would have been been completed in connection with the Cambridge Savings Bank mortgage would answer many of those questions. There should be a complete accounting of money paid, loaned, borrowed, or received to accomplish the conveyance. What was the fate of the $350,000? Is the other $200,000 included? What is the purchase price reported? If more than $100, was there a record of payment of documentary stamp tax? If less than $100, was all tax, income and profit properly handled? If less than $100, is there a gift letter in CSB’s file? Bandar’s records should reveal the mortgage payment history.

We may or may not be able to learn more about this as these cases progress. From a look at the records which have been made public, it appears to me that there is the real possibility of illegalities buried within these transactions, which involve sitting and former City Councillors and their families and associates. There is certainly a lot of smoke obscuring the facts here. For instance, the charge of fraudulent conveyance made by Bandar in the first case. One spouse conveying to both and acquiring homestead protection is a common estate planning move, and I would be surprised if a judge gave this much consideration. As for the rest, we will have to wait and see.

Photo of 15-19 Highland Ave. is taken from the City of Cambridge Property Database.