Federal court finds Govoni liable for $120 million missing from health care trust fund

TAMPA — A federal judge has ruled on a $122 million shortfall on the books of a bankrupt St. Petersburg nonprofit that managed a medical trust fund for more than 2,000 injured and disabled people. The court ruled that a Clearwater businessman was responsible.

Judge Roberta Colton of the Middle District of Florida this week signed a summary judgment against Leo Govoni filed by bankruptcy trustee Michael Goldberg. This gave him the power to trace Govoni’s assets. Govoni’s Boston Finance Group received a $100 million loan from the Center for Special Needs Trust Management.

The judge also approved the trustee’s request for a temporary restraining order barring Mr. Govoni from selling the assets of more than 100 companies that he owns or receives funding from the center.

In his request for the order, Goldberg said funds sent to Boston Finance were transferred to a number of other Govoni companies. The list also includes Big Storm Brewing, a Clearwater-based craft beer business that Govoni ran with his son.

Mr. Govoni is also at the center of an FBI investigation into the center’s finances. The nonprofit approved the loan shortly after Mr. Govoni resigned as director of the center in 2009, according to court records. The loan was taken from a trust fund set up for children with Down syndrome and other disabilities, people who are unable to work due to medical conditions, and victims of disabilities. People who have been involved in a traffic accident require expensive medical treatment for the rest of their lives.

That money was never fully repaid.

Mr. Goldberg sued Govoni and Boston Finance in an attempt to recover as much of his lost bankruptcy estate as possible. The lawsuit included copies of documents listing Mr. Govoni as a guarantor on the loan.

The restraining order expires after 14 days, but Judge Colton is scheduled to hear arguments Tuesday morning for a more permanent restraining order.

She said records submitted by the trustees and their legal team demonstrate a “substantial likelihood” that Govoni and his associates will transfer or “disappear” properties purchased with funds withdrawn from the trust fund. I wrote it.

“[The trustee]has demonstrated the possibility of obtaining title to all or a substantial portion of the defendant’s assets,” Colton wrote.

It’s unclear how much Govoni’s company is worth.

His portfolio includes a real estate company that owns real estate. But in August, Govoni agreed to an injunction to stop the sale of 11 properties in Florida and Kentucky worth about $3.8 million to help resolve a civil lawsuit filed by the Florida attorney general’s office. .

Authorities had accused him and his business associates of stealing more than $2 million from a second trust fund nonprofit that oversees 48 trust funds. This prompted the judge in the Pinellas County case to temporarily freeze his bank account.

Govoni, a financial advisor, founded the center in 2000 with Pinellas attorney John Stanton. He grew it into one of the nation’s largest trust fund management companies.

More than 1,500 trusts were siphoned off for the loans, which were paid over 15 years, according to court records. As a result, some families of disabled and injured people have difficulty paying medical bills and living expenses.

Court records say Mr. Govoni orchestrated the loan by maintaining control of the center after he left office. The company he owned was contracted to run the nonprofit’s accounting, payroll, IT, and human resources.

Records show Mr. Govoni lived a lavish lifestyle after the loan facility was approved. He flew friends on a $3.4 million private jet and watched the Kentucky Derby from an executive suite at Churchill Downs. He donated hundreds of thousands of dollars in campaign funds to politicians.

His new attorney, Edward J. Peterson III, did not respond Friday to two emails and two voicemails seeking comment. Mr. Govoni has not been charged with any crime, but he denied the charges in a statement from his former lawyer, Eric Koenig.

In a motion challenging the liability judgment, Mr. Govoni’s lawyers argued there was not enough evidence to support the $100 million debt and said the amount owed was probably closer to $30 million.

But the judge was swayed by an analysis of both the center’s and Boston Finance’s books by Kevin McCoy, a forensic accountant and investigator hired by the trustees.

Mr. McCoy said in his affidavit that the investigation found that just under $100 million was transferred from the center to Mr. Govoni’s company, with $39.4 million in unpaid interest. Boston Finance repaid $18.8 million, McCoy found.