Land Bank Levies Record Fraud Penalty On Head Of Troubled Private Equity And Development Firm

The Land Bank issued its largest-ever fraudulent intent penalty last Tuesday, placing a lien totalling $485,997 on a property belonging to investor Brett Fodiman, president of the troubled private equity and development firm Slacktide.

Fodiman is accused of not reporting a property transfer on an 84 Cliff Road property that previously belonged to him, avoiding the 2 percent fee the Land Bank collects on all Nantucket real-estate transfers. That would usually just trigger a late penalty or interest payments, but if the Land Bank feels that the violator dodged the fee on purpose, they can also levy a fraudulent intent penalty.

And Fodiman, the Land Bank believes, is a repeat offender.

“This is the second or third time he's done it," Land Bank director of finance Susan Campese said. “He's obviously been aware of the Land Bank and has continued to disregard our act."

Campese could only remember one other fraudulent intent penalty issued by the Land Bank, for $6,000. This one is $179,000.

"[Land Bank Counsel Valerie Swett] is encouraging, quite strongly, that we…put a fraud penalty. She thinks it's fraudulent. Staff, we're not so sure,” Campese said. “We don't have a strong inclination on that fraud penalty. I'm not feeling it, but Valerie [Swett] said she's never seen anything so fraudulent.”

There’s a good chance, however, that Fodiman may not pay the penalty. It was issued in large part as a means to force him to reply to the Land Bank and engage in dialogue.

“I'm only saying yes because you can always pull it back, and I think we need to do something to get his attention,” Land Bank Commission chair Kristina Jelleme said.

Lawyers for the Land Bank and Fodiman are now in talks, according to Land Bank executive director Rachael Freeman.

Fodiman’s former property at 84 Cliff Road sold for just under $9 million during a foreclosure auction this June. When the Land Bank reviewed the sale, it found that the ownership of the limited liability corporation that sold the property had changed without them knowing. That’s a violation of Land Bank regulations, which require such transfers of ownership to be reported. Fodiman, the former owner of the LLC, is being held accountable.

The $485,997 lien was placed on 7 White Street, another property the Land Bank believes belongs to Fodiman.

Fodiman is the president of the private equity firm Slacktide, which previously purchased two properties on Sheep Pond Road. Soon after he purchased them, the homes were sent to a foreclosure auction, which was later delayed after an LLC managed by Fodiman, which owned the properties, filed for bankruptcy, and one of the homes was condemned.

Slacktide is facing numerous other challenges as well. The company is a defendant in several lawsuits and small claims cases in Nantucket District Court and Nantucket Superior Court brought by other island businesses in the trades over contractual disputes in which Slacktide allegedly failed to pay monies owed.