Developers’ sworn statements and court filings differ substantially from recent comments to media

JUAN DOLIO, Dominican Republic, – Although the developers of the Sun Village Juan Dolio resort claimed in a May 28th press conference that the hotel project was “as much as 75 percent complete,” their sworn statements, recent court filings, and photos of the property taken yesterday tell a dramatically different story.

Based on their sworn statements to the U.S. Courts, Canadian father-son expatriates Frederick and Derek Elliott are clearly trying to mislead the press, and thereby investors, as to the progress at the Sun Village Juan Dolio.

“Derek Elliott’s comments to the media were designed to show their project is rapidly moving forward to completion, when in fact nothing could be further from the truth,” said Jose Alfredo Rizek, attorney for the purchasers.   A private investigator working for the former purchasers took photos of the property immediately after the press conference.

According to court documents, the Elliotts have raised $91 million for the Sun Village Juan Dolio project since 2004. For comparison, the most expensive high-rise commercial property in downtown Santo Domingo has a $40 million commercial retail value, said Rizek.

In recent depositions, the Elliotts admitted that they took $25 million of the $91 million collected from investors.  In those same depositions, the Elliotts also admitted that if they had not taken this money, the Juan Dolio resort would have been completed.  The Elliotts also stated that $7.5 million of the investor funds designated for construction, were used to purchase a separate DR property in Miches. This purchase was made without notifying or obtaining authorization from their investors. 

“The Juan Dolio property remains in serious disrepair, and the cost to complete the project appears to be a moving target,” added Rizek.  On two separate occasions, March 26 and April 2, Fred Elliott said under oath that it would take $8 to $9 million to complete the project. 

At that time Fred Elliott said the project was “60 percent complete.”

However, in early May, the Elliotts filed a preliminary business plan in the U.S. Court case that stated it would take $12.9 million more to complete Juan Dolio and that much of the property needed to be reconfigured. The business plan was premised on the Elliotts being able to sell an average of 10 units at the Sun Village Juan Dolio each month.  The Elliotts admitted that they had not advised investors of those additional expenses. 

For his part, Fred Elliott admitted under oath on May 8, 2009, that no units had been sold at Juan Dolio in the past two years and no funds were coming in.  Derek Elliott similarly testified under oath on May 7, 2009, that not a single unit had been sold by the new sales agent, ReMax, who took over sales for the Juan Dolio in November 2008.  “To now claim to the media that the project is now ‘as much as 75 percent complete’ simply isn’t true,” said Rizek.

Meanwhile, a Dominican Republic judge on May 5 ordered the Elliotts not to transfer, dissipate or otherwise encumber assets up to $34 million in value. Noting in her ruling that the Elliotts have not honored their financial obligations to hundreds of buyers and investors in their DR resort properties, Judge German said, “The Elliott defendants have principally dedicated themselves to diverting investor monies. As a result, the plaintiffs have been defrauded.”

The Elliotts have been named in a series of lawsuits filed by U.S. and international law firms, including Medina & Rizek Abogados and Diaz Reus & Targ, LLP. The plaintiffs’ suits seek to preserve as many Elliott-related assets as possible, including personal property, bank accounts, and real estate.