"Rod Khleif"

Mr. Rod Khleif

FACT SUMMARY SHEET

December 2007

December 12, 2005 - An investigative report is featured in the Sarasota Herald Tribune by **author highlighting the grievances of 3 disgruntled tenants of Mr. Rod Khlief. Khlief is the owner/manager of 600 rental properties located in southwest Florida and Memphis Tennessee.

The article makes the following unsupported claims:

Claim 1: Tricia and Keith; “after two years of trying to close a deal, they were evicted from the home, losing thousands they paid in down payments and on home improvements”

Fact: Tricia and Keith Arnett were evicted through the Charlotte County Court System for being over $5,300.00 behind in their rent and left the home with thousands of dollars of additional damage.

Claim 2: “at least a half dozen families across southwest Florida say that when it came time to buy their homes, sometimes after years of purchase payments, they got nothing but a runaround. All lost thousands spent on down payments and some were evicted from the very homes they expected to buy”.

Fact 1: Any tenant that has ever been evicted by Gulf Coast Management was significantly delinquent in their rent payments. Typically attempts were made by Gulf Coast Management to work out payment arrangements that weren't kept by tenants.

Fact 2: 157 separate families exercised their options with Mr. Khleif in the last 3 years to successfully purchase their homes.

Claim 3: “But legal experts say Khleif's lease-purchase contracts are filled with land mines that can keep people from being able to buy a home. University of Florida law professor Jeffrey Davis, a national expert on contract law, calls Khleif's contracts “a wide-ranging abuse.” “There's all sorts of stuff in here that gives the landlord countless ways to get out of the fundamental obligation to sell,” he said. Customers lose the very benefits that can make lease-purchase deals attractive, including a chance to lock in a price while home values are soaring and to live in the home while working to buy it.”

Fact 1: 157 families purchased their homes from Mr. Khleif during this period and any tenant that had the ability to buy was able to exercise their option.

Fact 2: Only tenants that were seriously delinquent on their rents were evicted.

Fact 3: The Lease Option agreements like the ones used by Mr. Khleif are used by thousands of real estate investors around the country. Mr. Khleif's tenants signed additional addendums in very large type clearly spelling out the consequences of not timely paying the rent.

Fact 4: The State Attorney General's office carefully scrutinized all of the documents used by Mr. Khleif in his ordinary course of business. Their office found nothing to be improper and did not ask Mr. Khleif to make any changes, additions or modifications when they closed their case.

Claim 4: “The Herald Tribune reviewed hundreds of properties owned by Khleif or his companies in Southwest Florida counties, but found only a dozen sales in five years to individual buyers.”

Fact: 157 separate families exercised their options with Mr. Khleif in thelast 3 years to successfully purchase their homes.

Claim 5: “*Tenants can be evicted with three days' notice for anything from late rent to not making repairs. * A single bounced check allows a sale to be canceled.”

Fact: A tenant has never been evicted by Mr. Khleif or Gulf Coast Management that wasn't significantly (thousands of dollars) behind in rent. No contract was ever cancelled for just one bounced check.

Claim 6: “But his deals have sparked lawsuits and several complaints to Attorney General Charlie Crist, the FBI and the Better Business Bureau.”

Fact: The Attorney General closed its case against Mr. Khleif and did not ask him to change anything about how he does business. The FBI found no reason to open a case. The Better Business Bureau heard the case of Dorothy Borges and after hearing testimony completely exonerated Mr. Khleif and Gulf Coast Management.

Claim 7: “J. Lauffer sued Khleif over a failed deal for a small house on a canal in Port Charlotte. He invested thousands in money down and repairs after Hurricane Charley because he expected to own the home. “ “He's screwing me out of earnest money and storm damage,” said Lauffer, who claims hundreds of people are in the same situation. Lauffer said he was told the home couldn't be sold because it's tied up in a divorce.”

Fact: Lauffer wrote numerous bad checks, was frequently behind in his rent and violated other provisions of his agreements.

Claim 8: Another suit in Sarasota accuses Khleif of offering lease-purchase deals on homes he didn't own. Arizona investor D. Sanderson says Khleif rented houses they bought together, took profits for himself and tried to sell homes behind Sanderson's back. The suit accuses Khleif of extortion and fraud, and says Khleif threatened to evict tenants without reason.

Fact: Mr. Sanderson apologized to Mr. Khleif and signed a document that said; “that after extensive and exhaustive review of the partnership documents and records it was apparent that any differenced and issues between them was based on a lack of communication, and there was absolutely no evidence of wrongdoing.

Claim 9: Court records show Khleif has moved millions of dollars made from rental houses to a trust in the Bahamas.

Fact: These were allegations made in Mr. Khleif's divorce case. The allegations were proved false. Mr. Khleif has never had an offshore bank account in the Bahamas or any other country and has never had any money deposited in any other country but the United States.

Claim 10: Dorothy Borges, an Englewood woman who filed a complaint with the attorney general this year, said a Khleif firm rejected her bid to buy her rental home, citing bad credit. Borges was evicted a month later and lost $18,000, according to her complaint."They find any possible reason to evict you and make no effort to help you purchase," she wrote.

Fact 1: Dorothy Borges had evictions started on her twice for being significantly behind in rent. She only paid $1891 as an option fee towards this house and she left owing $3400 in back rent.

Fact 2: The Better Business Bureau heard the case of Dorothy Borges and after hearing testimony completely exonerated Mr. Khleif and Gulf Coast Management

2nd Article dated October 19, 2005

Claim 1: 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.

Fact: Mr. Marcoux's home in Punta Gorda was destroyed in hurricane Charlie. Mr. Khleif immediately allowed him to move into another of his homes. Mr. Marcoux attempted to obtain financing to buy his home and was turned down. Mr. Marcoux moved out of that house leaving a past due balance of $4,990 including rent and damages to that home.

3rd Article dated November 21, 2005

Claim 1: “A Sarasota lawsuit filed by two former Colorado business partners accuses Rod Khleif of defrauding insurance companies and out-of-state investors.”

Fact: Both partners, D. Sanderson and S. Shaver apologized to Mr. Khleif and signed statements that had the following language: "after extensive and exhaustive review of the partnership documents and records it was apparent that any differences and issues between them was based on a lack of communication, and there was absolutely no evidence of wrongdoing”

Claim 2: At least 20 Khleif tenants have said they lost money because Khleif refused to sell homes when the tenants were ready to buy.

Fact: The only tenants that lost money did so because of not paying their normal rent payments.

Claim 3: “Among the issues in question is whether Khleif took insurance payments for homes owned by other people. Amend said Khleif's firm was the only name listed on insurance policies for a number of properties, even though Khleif's ex-partners are the legal owners. Khleif has hundreds of properties insured through a single Arizona insurance firm, Scottsdale Insurance Co., Amend said. State records also indicate that a number of disputed insurance payments "were made directly to Gulf Coast Management," one of Khleif's firms.”

Fact 1: This claim relates to the Shaver Litigation regarding properties in which Mr. Khleif owned 50% of. Mr Shaver acknowledged his failure to read the statements he received from Mr. Khleif showing credits for all insurance funds received.

Fact 2: Shaver also signed a statement that said: : "after extensive and exhaustive review of the partnership documents and records it was apparent that any differences and issues between them was based on a lack of communication, and there was absolutely no evidence of wrongdoing”

Claim 4: A former Khleif employee and several other associates, who asked not to be named because they fear reprisals, say Khleif has bragged that he has made millions through insurance fraud by exaggerating damage and hiring his own workers to make cheap repairs. "He said he made a fortune off Hurricane Charley," said one former employee. "He subcontracts everything out, but they work for him. They turn in the bills to repair the roof and he would take that list and multiply that by two or three times to submit to the insurance company."

Fact: This claim was made by a disgruntled ex employee of Mr. Khleif's and is without merit and a complete falsehood.

Claim 5: “The lawsuit filed by the two former Khleif business partners, Steve and Carol Shaver of Aurora, Colo., also accuses Khleif of insurance fraud, including submitting fake repairs and exaggerated insurance claims. The Shavers invested in nearly a dozen homes along the Gulf Coast in Tampa, Brandon, Sarasota, Apollo Beach and North Port, plus two in Memphis, Tenn. But their seemingly sure-fire investment in booming Florida real estate cost them dearly, according to the lawsuit. Khleif was supposed to manage homes but took profits for himself and tried to force them out of business, the suit says. Khleif also took out insurance policies on properties he didn't own and kept claims money, it says. Khleif "fraudulently devised a scheme" to overcharge investors for repairs and charge them for work never done, the suit says. The suit claims Khleif sent partners fraudulent expenses while hiding actual costs "in an attempt to intimidate" investors to drop out.”

Fact: Shaver acknowledged his failure and inability to read the statements that were sent to him monthly and apologized to Mr. Khleif. Shaver also signed a statement that said: : "after extensive and exhaustive review of the partnership documents and records it was apparent that any differences and issues between them was based on a lack of communication, and there was absolutely no evidence of wrongdoing”

Claim 6: Meanwhile, many of Khleif's former tenants who signed contracts hoping to buy houses are scraping to rebuild their lives after losing thousands of dollars and often being evicted. Some lost as much as $20,000 in purchase payments and repairs they made.

Fact: No tenant paid more than a few thousand for their option agreements and the only tenants that did not buy either couldn't qualify, moved out or were evicted if they were significantly behind in rent.

Claim 7: Some tenants who signed contracts expecting to buy homes in Port Charlotte, Apollo Beach or Tampa have been forced to spend months in damaged homes or live crammed in federal trailers waiting for repairs after hurricanes Charley, Frances and Jeanne last year. Rosemary and John Williams of Port Charlotte have spent more than a year since Hurricane Charley waiting for repairs. "They only came when the insurance came, months and months later -- and then all they did was the kitchen," Rosemary said. "I have no kitchen light. I haven't had one since the hurricane. It got wet up in the wall. You can hear a little pop sometimes. I was scared of it. When FEMA came they told me it was unsafe." Raul Hernandez and his family of six, including a son with a rare blood disorder, lived in two FEMA trailers in the front yard of a Port Charlotte home for months, waiting for repairs to broken windows and doors that let rats into a food pantry. "I know they got insurance money off it," he said. The family moved back into the home recently after more than a year living in trailers. Sari Biskupski Shepler slept in her kitchen and lived in a FEMA trailer for six months while waiting for the roof of a Port Charlotte home to get fixed. Building inspector records show it took Khleif three tries to get the roof right because of shoddy work. "They made him rip it out and do it again, so Rod doesn't like me," Shepler said.

Fact 1: There were 16,000 damaged homes in Charlotte County after hurricane Charlie. 300 of Mr. Khleif's homes were heavily damaged. It took months to get them all repaired because of scarcity of supplies and contractors. All of the homes were repaired as quickly as possible.

Fact 2: There were many unscrupulous contractors making roof repairs and Mr. Khleif lost a lot money from one of them. He had to hire other companies to redo roofs he had already paid for.