Repeated code fines and subsequent foreclosure force sale of $1.5 million vacation rental home

kwadlow@keynoter.comAugust 16, 2014 

This Tavernier house has been the focus of nonstop code complaints.

KEVIN WADLOW

Neighbors long perturbed by the use of a six-bedroom Tavernier home as an unapproved vacation rental soon may breathe easier.

The canalfront property at 108 Old Fashion Road off mile marker 92.5 has a pending sale agreement to buyers who pledge in writing not use the three-story gated home for a short-term vacation rental.

Monroe County commissioners, meeting Wednesday at the Murray E. Nelson Government and Cultural Center in Key Largo, will decide whether to allow a partial release of a county lien -- now in excess of $1.3 million for years of code violations -- in exchange for a $30,000 payment from the buyers.

The move would clear the way for Broward County residents Harley and Robin Stock to close on a short-sale purchase from Wells Fargo Bank.

The seven-bathroom house was owned Juan Carlos Castaneda, 53, of Miami, who reportedly offered it online for frequent short-term rentals. He described the property as "The Falcon Estate" and "La Casa Grande Resort."

County reports show rates of $6,000 per week, plus sales tax and cleaning fees, were charged. Neighbors filed code-enforcement complaints for at least five years.

When Castaneda continued renting it out after county Code Compliance action, a magistrate in 2012 imposed fines of $2,000 per day.

In April, Circuit Court Judge Sandra Taylor approved a final bank foreclosure on the property in lieu of $3.58 million owed to Wells Fargo in principal, interest, taxes and expenses.

The U.S. Justice Department also holds a lien on the house -- part of a settlement of a 2004 Medicare-fraud case against Castaneda and other defendants.

Castaneda, listed owner of G&S Medical Centers, pleaded guilty in August 2008 to one count of conspiracy to launder $4 million received from fraudulent medical claims.

He was sentenced to seven years in prison, based in part on a prior conviction in a separate medical kickback scheme. The 2008 sentence later was reduced because of Castaneda's cooperation with prosecutors, federal records show. He was released in March 2012.

Monroe County attorneys recommend to the County Commission that the $30,000 offer be accepted so the Tavernier property, assessed at $1.5 million, can be sold.

The balance of the county's fines will remain in a personal lien against Castaneda, which can be collected if he ever receives money from other real-estate sales, Assistant County Attorney Lisa Granger said.

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