Dare's role in Pastures cost association $100,000

Dare's role in Pastures cost association $100,000
By BRENDAN J. LYONS, Senior writer First published: Sunday, Times Union August 12, 2007 . Republished with permission
August 12, 2007
ALBANY -- An advocate for the Historic Pastures Homeowners Association, which lost more than $100,000 in association dues from the mismanagement of the properties by Aaron R. Dare, said federal authorities have refused to identify the group as a crime victim, weakening their efforts to obtain restitution.
Dare, 38, who bought the properties in August 2002 as part of an illicit $8 million scheme, defaulted on the mortgage shortly after it was approved. Still, he continued collecting rents, association dues and rent deposits, and had instructed his property managers to encourage tenants to pay their various fees in cash, according to federal court records and people who worked for him.
The 96-building Pastures consists of 150 or so properties, including apartments and town houses, which are bordered by Madison Avenue, South Ferry Street, Pearl Street and Green Street. The buildings include some of Albany's oldest structures and have fallen into disrepair due to Dare's mismanagement and the pilfering of the association's dues, according to residents.
Sue Frazier, an advocate for the association, said they were stung by the fact federal prosecutors declined to list them as a victim. She also complained to Albany police years ago that Dare should have been investigated for state criminal charges in the case, including larceny.
They also went to then-state Attorney General Eliot Spitzer, but say no action was taken.
"As we moved through the many layers of law enforcement, nobody would help us," Frazier said.
Frazier said some association members grew suspicious that Dare was being protected by his real estate business partner, Detective Kenneth P. Wilcox, who died last year in an on-duty crash. Wilcox helped Dare manage the Pastures' finances and routinely collected the monthly receipts, according to a confidential witness used by the FBI.
The witness, who served as an informant during an FBI investigation of Dare and Wilcox, said in an interview several months ago that both men encouraged him to have tenants pay rents and deposits in cash.
The tenants collectively paid more than $50,000 a month in rent, but according to federal court records Dare stopped paying the $4 million mortgage almost immediately after taking title to the properties.
"When the rents would come due, Dare would say: 'I'm sending Kenny Wilcox over, write him a check,"' the informant said.
Initially, many people worked in the Pastures' rental office, he said, but eventually the staff dwindled as money ran short.
Despite that, "Aaron Dare was flying to Miami on weekends for pedicures and manicures," the informant said.
Eventually, the man said he was asked by the FBI to wear a hidden recording device and go to the Tivoli Street office of Dare and Wilcox. (The incident is reflected in a sealed search warrant application, reviewed by the Times Union, that the FBI used to raid the offices of Dare and Wilcox on Sept. 1, 2004.)
But the man said the FBI's plan backfired because Dare and Wilcox grew suspicious when he turned up at their Tivoli Street office, which was across town from the Pastures. He said Wilcox pressed him about how he knew where their office was located.
Around that time, he said, he received an anonymous call from someone who warned: "If you know what's good for you, you'll keep your mouth shut."
A week later the FBI raided two downtown offices used by Dare and Wilcox.
While the FBI's investigation remained secret, other indications of problems surfaced.
In December 2004, Fidelity National Title Insurance Company, a California company, filed a lawsuit in state Supreme Court in Manhattan alleging fraud against Dare and Adirondack Abstract and Settlement, the title company he operated with Wilcox.
In the lawsuit, Fidelity alleged Dare and the company had failed to record deeds on more than a dozen property sales, bounced checks, misrepresented Fidelity, and failed to pay off at least one $40,000 mortgage during a closing. Dare also allegedly kept money from other fees that did not belong to him, according to the lawsuit.
Douglas F. Broder, a Manhattan attorney who represented Fidelity, said he could not recall details of the case but that it was settled out of court.
Still, the lawsuit provided a glimpse into the mounting problems that started to swirl around the real estate dealings of Dare and Wilcox.
Looking back, Frazier said the homeowners association had seemed to face resistance each time they sought restitution for Dare's crimes. They won a judgment against his companies in state Supreme Court, but Dare stopped using those companies to conduct his real estate transactions and instead relied on the companies formed by Wilcox, including Invision Properties and Adirondack Abstract.
"We were sandbagged at every turn," Frazier said. "This whole thing has been a sad commentary on the law enforcement community."
Recently, Mayor Jerry Jennings has tried to lend help, Frazier said.
John Van Amburgh, the mayor's executive assistant, said city officials are exploring whether any existing programs may be able to help the Pastures' association recoup its losses.
"They are now in a position where there may be some opportunities presented to that group," Van Amburgh said.
Dare conspired in his scheme involving the Pastures with Berne A. Watkins, 70, a real estate developer who also owns Sunward Electronics, a Troy-based company that specializes in electronic dog collars. Both have pleaded guilty to federal charges in the case.
According to court records, the men met in 2000 and devised a plan to sharply inflate the value of an $8.5 million real estate deal in which Dare purchased three major multi-unit properties: the converted Hinckel Brewery near Lincoln Park in Albany; the Pastures Apartments near Albany's South End; and Old Franklin School Apartments in Schenectady.
Dare lacked collateral to make the deal work, so their scheme to inflate the value of the properties by more than $2 million allowed them to get approval for a mortgage far above what the properties were worth To help complete the deal, Watkins drafted fake promissory notes through his Troy company claiming to owe $1.8 million to Dare's corporation, Emerge. The men also drafted a second fake promissory note for $700,000, according to the indictments. Assistant U.S. Attorney Robert Storch, who prosecuted the case, has said the notes were fake.
Between November 2001 and August 2002 a Maryland-based mortgage company, AMI Capital, issued HUD-insured loans to Dare. He received $2.5 million for the Hinckel Brewery Apartments, $814,900 for the Olde Franklin School, and $4.2 million to buy Historic Pastures Village Apartments. He defaulted on all the loans, leading HUD to foreclose on the loans and lose about $2 million.
When Dare took ownership of about 39 buildings - including 96 apartments - within the Pastures, members of the homeowners association complained that Dare was not paying his dues and was severely mismanaging the properties.
Brendan J. Lyons can be reached at 454-5547 or by e-mail at blyons@timesunion.com.













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