Taunton Property Owner Fined $1.7 Million for Misuse of Charitable Funds, Unfair...

Taunton Property Owner Fined $1.7 Million for Misuse of Charitable Funds, Unfair and Deceptive Practices

Michael O’Donnell Banned From Future Real Estate and Mortgage Lending Transactions

BOSTON – November 11, 2015 – (RealEstateRama) — A Taunton property owner has been ordered to pay more than $1.7 million for misappropriating charitable assets for his own personal use, for using unfair and deceptive practices, and for failing to comply with charity reporting laws, Attorney General Maura Healey announced today. He has also been barred from engaging in any real estate and mortgage lending transactions and from serving in any role involving charities.

Suffolk Superior Court Judge Brian Davis entered the order pdf format of O'Donnell Judgment
 file size3MB against Michael O’Donnell of Taunton on Oct. 29 following a nine-day bench trial with 20 witnesses spread over three months in late 2014 and early 2015.

“This defendant converted charitable assets for his own use and preyed on an elderly homeowner,” said AG Healey. “This judgment requires the defendant to pay more than a million-and-a-half dollars in restitution and penalties and permanently bans him from real estate and mortgage lending activities.”

In his 56-page judgment and order pdf format of O'Donnell Judgment
 file size3MB, Judge Davis held that O’Donnell is personally liable for $1,285,300 in restitution, plus interest, for orchestrating “sham transactions” to obtain four real estate properties from two charities he created, Bay State Affordable Housing (organized to provide low-income housing) and Save the Star (organized to rehabilitate Taunton’s historic Star Theater). Judge Davis ordered that O’Donnell pay this restitution into a fund established by the AG to be applied, under the direction of the Court, to one or more Taunton-area charities.

Judge Davis also held O’Donnell liable for $250,000 in penalties for the following unfair and deceptive practices:

  • Deceptively creating the two charities in order to gain favorable tax treatment for his real estate, while not operating the charities for any charitable purpose but instead using them to camouflage his private real estate transactions;
  • Using fake names to conceal his relationship with the charities in order to disguise his business activities and to improperly eliminate or reduce taxes on their properties, and using fake names in real estate transactions in order to shield himself from personal financial exposure; and
  • Taking unfair advantage of an elderly woman who needed a home repair loan by using false names to conceal his role as a lender and home improvement contractor, granting her a home repair loan designed to fail, and overcharging her for substandard renovations, which he halted before completion.

According to the order, O’Donnell is also liable for $190,000 in penalties for his failure to register the two charities and his failure to file annual financial reports on their behalf with the Attorney General.

Judge Davis also permanently banned O’Donnell from transacting any real estate or mortgage lending activity, serving any role in any charity, and contacting any family members of the elderly victim.

This case was tried by Assistant Attorneys General Eric Carriker and Jonathan Green of Attorney General Healey’s Non-Profit Organizations/Public Charities Division, with assistance from Compliance Officer Sean Hildenbrandt as well as Director of Investigations Kevin McCarthy, Investigator Anthony Crespi and Former Investigators Monique Cascarano and Nancy Ward of the Civil Investigations Division.

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