A long-running financial dispute between the Baiden & Associates Inc. construction company and Dunes Village Properties LLC – developer of the Dunes Village Resort – took a new turn last week when the oceanfront condominium developer filed a federal lawsuit accusing the construction firm’s owners of fraud and racketeering.
In a civil complaint filed in Florence, Dunes Village Properties says Frank “Ebbie” Baiden Jr. and his son, Frank Baiden III, have stolen labor and materials from commercial construction projects since at least 2004 and then used the labor and materials to build their personal residences in the Dunes Cove and Bluffs on the Waterway neighborhoods.
The Baidens created false invoices that were submitted to Dunes Village Properties to cover up the theft, according to the lawsuit. Dunes Village Properties says the Baidens delivered those invoices electronically and by mail, thereby violating federal mail and wire fraud statutes.
The Baidens have not filed a response to the complaint but previously have denied any wrongdoing.
Last week’s complaint is the latest twist in a dispute that started in 2008, when Baiden & Associates filed a mechanics lien against Dunes Village Properties for failing to pay for construction services at the resort located at 5200 N. Ocean Blvd. in Myrtle Beach.
Baiden & Associates obtained a nearly $2.6 million judgment against Dunes Village Properties in 2010, which was appealed by the developer. The state Court of Appeals sent the case back to circuit court in July and the two sides have been in arbitration since September to determine what, if any, amount of money should be deducted from Dunes Village Properties’ debt because of the alleged theft of labor and materials.
The elder Baiden said he was not aware of the federal lawsuit when contacted last week. He referred questions to Dunn Hollingsworth, a Charleston lawyer representing the Baidens in the ongoing dispute with Dunes Village Properties.
Hollingsworth said he does not know why Dunes Village Properties filed its federal complaint while the matter still is in arbitration.
“We’ll deal with the allegations as they come and the truth will come out,” said Hollingsworth, who declined to comment further on the federal lawsuit.
John Simmons, a Charleston lawyer representing Dunes Village Properties, could not be reached for comment last week. Simmons, in the complaint, is asking for unspecified actual damages, triple damages, punitive damages and attorney’s fees.
Dunes Village Properties was formed in 2004 by Danville, Va.-based businessman George Buchanan Jr., who has developed several hotels and condo projects in the Myrtle Beach area. Buchanan could not be reached for comment last week.
The two homes specified in the lawsuit have a combined value of more than $1.5 million, according to real estate records.
The elder Baiden’s home in Dunes Cove was built in 2005-06, according to Myrtle Beach building permits. The five-bedroom home with an outdoor kitchen and pool was listed for sale in August with a price of $1 million, according to the Coastal Carolinas Association of Realtors’ Multiple Listing Service.
The son’s home in Bluffs on the Waterway was built in 2007, according to the MLS. The four-bedroom home with heated pool and theater room was listed for sale in September with a price of $549,900, records show. The home was taken off the market last month.
The federal Racketeer Influenced and Corrupt Organizations Act, or RICO, was enacted in 1970 to prosecute organized crime. Both criminal and civil actions can be brought under the statute. The advantage to filing a civil lawsuit under RICO is that plaintiffs, if successful, can win up to three times the amount of damages they would in a traditional lawsuit.
That promise of a big payday in court, however, has led some to criticize using the RICO statute in civil cases. Critics say some normal business disputes are twisted into RICO claims in order to take advantage of the triple damages provision.
No further court hearings are yet scheduled in either the case now in arbitration or the federal lawsuit filed last week.
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