ON FEB. 8, 1985, T.S.T.-Willow Lakes, a Florida corporation, signed a contract to sell the Willow Lakes Golf and Country Club and associated property to Old Jacksonville Land Corporation, a newly formed Florida corporation of which Jeffrey Levitt was the sole shareholder. The golf and country club is located in Jacksonville, Florida. The purchase price was $3,560,000, of which $356,000 was to be paid as a down payment and held by a New York law firm as escrow agent for the parties.
On February 8, 1985, an Old Court check in the name of Old Jacksonville Land Corporation was made payable to Hoffheimer, Garthy, Gottlieb & Gross, the New York law firm serving as escrow agent for the sale of the Willow Lakes property, in the amount of $356,000. The check was deposited by the Hoffheimer firm in their escrow account as required by the contract. At the time the check was drawn the Old Jacksonville Land Corporation account had a balance of $100. On February 21, 1985, Levitt directed that Old Court Investment Corporation OCIC issue a check in the amount of $356,000, payable to Old Jacksonville Joint Venture, with the notation "purchase of property Jacksonville, Florida." The check was deposited in the aforementioned Old Jacksonville account at Old Court to cover the down payment check previously drawn on the Old Jacksonville Land Corporation account.
On March 4, 1985 settlement on the Willow Lakes property took place in the New York offices of the Hoffheimer firm. Old Court wired $3,199,625.80 to the escrow account of the Hoffheimer firm. James Gay of Bankers' Realty, Inc. attended settlement on behalf of Levitt, the sole shareholder of Old Jacksonville Land Corporation. No mortgage was executed by Old Jacksonville Land Corporation or Levitt. Once settlement was concluded, Levitt, as the sole shareholder of Old Jacksonville Land Corporation, owned free and clear of any liens the Willow Lakes Golf and Country Club, which he had just purchased with more than $3,560,000 belonging to Old Court and its subsidiaries. Levitt never repaid this sum.
At about the same time, Levitt and other insiders at Old Court were involved in the purchase of the Henlopen Hotel in Rehobeth, Delaware. Levitt needed $500,000 for his portion of the down payment to buy that hotel. To obtain the down payment on the Henlopen, Levitt directed Gay to prepare a contract of sale from Old Jacksonville Land Corporation to OCIC in the amount of $4,060,000, or $500,000 more than the original purchase price of $3,560,000, which Levitt had already stolen. At Levitt's direction, check No. 802 on the OCIC account at Old Court, payable to Old Jacksonville Land Corporation and dated March 7, 1985 in the amount of $500,000, was drawn and deposited by Levitt's personal secretary to the New Henlopen Limited Partnership account at Old Court.
Levitt never executed the contract of sale from Old Jacksonville Land Corporation to OCIC. At the time Old Court collapsed in May 1985, Levitt continued to own the Willow Lakes property free and clear of any encumberances. In addition, he had used the $500,000 check from OCIC on the aborted purchase of the property to acquire an interest in the Henlopen Hotel. Thus, Levitt embezzled $4,060,000 from Old Court in connection with the Willow Lakes property.