February 24, 2009 - R. Allen Stanford and American Leisure Group Developer Tierra Del Sol, Orlando FL

Stanford's Ties to Condos Are Adding to Buyers' Fears

American Leisure Holdings, received multimillion-dollar loans from two of Mr. Stanford's companies on at least two occasions, including a $6 million loan in 2004 and a $2.1 million loan in 2005, according to public statements by American Leisure Holdings.

In 2004, Austrian soccer player Andreas Lipa and his British wife, Sarah Adams-Lipa, plunked down a $62,000 deposit on a new luxury vacation home in an Orlando, Fla., resort called Tierra Del Sol. With the four-bedroom house still unfinished by last year, the couple filed suit in U.S. federal court to reclaim their deposit.

Now, the Lipas -- and some other buyers of properties at Tierra Del Sol who are in the same situation -- may have another reason to worry. A financial backer of the company developing the Florida resort is R. Allen Stanford, the Texas financier whom the Securities and Exchange Commission accused in civil charges of an $8 billion fraud.

Austrian soccer player Andreas Lipa and his wife are among Europeans who made deposits on Florida vacation homes being built by a developer backed by R. Allen Stanford. At least 10 lawsuits are pending against the resort, Tierra Del Sol or related entities.	Texas businessman R. Allen Stanford during an interview in May 2008. Stanford International Bank Ltd. And related firms controlled by Mr. Stanford have come under scrutiny by the FBI and other agencies.

Last year, one of Mr. Stanford's companies provided a $17.5 million loan to the developer of the resort, American Leisure Group Ltd., to fund the project. Also, American Leisure Holdings, the predecessor to American Leisure Group, received multimillion-dollar loans from two of Mr. Stanford's companies on at least two occasions, including a $6 million loan in 2004 and a $2.1 million loan in 2005, according to public statements by American Leisure Holdings.

The SEC's allegations aren't related to Mr. Stanford's role as a backer of American Leisure Group, the company developing the Florida resort. But the SEC has frozen assets of three of Mr. Stanford's companies, including Stanford International Bank.

Mr. Stanford's legal problems are fueling concern that the Lipas and other property buyers at Tierra Del Sol may never win the recourse they believe is due."It makes me even more concerned" about not being able to recover the deposit, says Ms. Lipa, 36 years old, who teaches business English. Now, "I feel like there isn't any hope."

Representatives for American Leisure Group didn't respond to requests for comment. Mr. Stanford has yet to respond to the SEC charges. A lawyer for Mr. Stanford couldn't be reached, and a spokesman for Stanford Financial Group referred calls to the SEC. An SEC spokesman said the agency could only comment on actions it has brought and not on behalf of the individuals those actions have been brought against.

The situation shows how the alleged fraud by Mr. Stanford may have implications for people beyond the financier's individual banking customers. There are at least 10 lawsuits similar to the Lipas' case pending against Tierra Del Sol or related entities in U.S. federal or state courts. Many of the suits are filed by British or Irish residents, to whom the properties were heavily marketed.

In a court filing in response to a case brought by an Irish man named William Clune, Tierra Del Sol said it was impossible to complete the home within two years because of "severe water restrictions in Polk County, the effects of hurricanes in the southeastern U.S., and the dramatic and unprecedented downturn in the real-estate market, among other things."

Kevin Burke, a U.K. lawyer who also is qualified to practice law in the U.S., is representing the Lipas and two other British citizens who paid deposits on Tierra Del Sol properties. He says he has been approached by at least a half-dozen others in a similar situation. In recent years, with the pound strong against the dollar, many British citizens looked to invest money in Florida property.

The developer behind Tierra Del Sol, American Leisure Group, is incorporated in the British Virgin Islands and has faced financial struggles. The company was formed by a merger between American Leisure Holdings -- in which Stanford International Bank Ltd. was a significant shareholder and creditor, according to filings by American Leisure Group -- and another property company. Stanford Financial Group, also controlled by Mr. Stanford, served as an investment banker to American Leisure Group.

American Leisure Group listed its shares on London's Alternative Investment Market in August 2007, raising £75 million ($108.6 million). But, by last year, the company said in public statements that it was struggling with a lack of financing. Stanford International Bank provided a lifeline in the form of a $17.5 million loan intended to help the company complete the Tierra Del Sol development, its flagship resort, according to an American Leisure Group statement.

The company continued to face difficulties, and its shares were delisted last month. American Leisure Group said in public statements in January that it was continuing to look for financing to help it complete the first phase of Tierra Del Sol.

Michael D. Crosbie, a lawyer representing Tierra Del Sol in at least several of the cases brought by investors, declined to comment.

Five years ago, marketing for Tierra Del Sol was in full swing as the Florida property market was booming. The 121-acre vacation-home resort, just 10 miles from Walt Disney World in Orlando, described plans for 972 luxury houses and condominiums with a water park and wave pool, restaurants, spa and a clubhouse "with romantic porticos and rich decor," according to American Leisure company filings.

The Lipas signed up to buy a $309,000, four-bedroom house in the development and paid a $62,000 deposit, Ms. Lipa says. The Lipas, who were living in the U.K. then, saw it both as an investment property that they could rent out as well as a holiday home.

By late 2006, the property hadn't been completed as scheduled. The couple says a marketing agent for Tierra Del Sol talked them into upgrading to a more expensive property, which cost $525,000 but didn't require any more deposit.

Ms. Lipa says to her knowledge their property still hasn't been built. The Lipas, who now live in Vienna, filed suit against the development in July 2008 in federal court in Tampa, Fla. The Lipas are claiming a violation of the Interstate Land Sales Full Disclosure Act, which requires, among other things, that a property be completed within two years.

In a court filing in response to the suit, the development said the Lipas' claim wasn't valid.

Original Story - Wall Street Journal