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LATEST NEWS LENNAR CORPORATION
March 26, 2020 - San Francisco Chronicle - Bay Area's Largest Housing Development Appears to Be Dead.
The redevelopment of the Concord Naval Weapons Station, the Bay Area's largest proposed housing project, appears to be dead after the Concord City Council declined to extend an agreement with Lennar.
Bill Whitney, who heads up the Contra Costa Building Trades Council, applauded the City Council's decision. "We look at this as a victory", he said. "We also look at this as an opportunity to get back to building this project by finding a master developer that will play by the rules the City of Concord has put in place. We are not going to sit on our thumbs. The Building Trades Council and the city will be working on finding a replacement for Lennar".
March 25, 2020 - San Francisco Business Times - Concord Calls Halt to Bay Area's Biggest Development Project.
Concord has severed discussions with Lennar Corp. over the massive Naval Weapons Station site, where the developer had planned to ultimately build up to 13,000 homes.
Meeting remotely by video conference, the Concord City Council voted 3-2 Tuesday to reject Lennar's request to extend the Exclusive Negotiating Agreement and will instead let the existing agreement expire on March 31, 2020.
January 23, 2020 - SF Chronicle - Lawsuit Seeks Billions in Damages, Halt to Development on Treasure Island.
Dozens of current and former Treasure Island residents filed a multi-billion dollar lawsuit against Lennar, it's affiliate Five Point, and certain government agencies this week alleging that Lennar and Five Point made "untrue and misleading statements" that created a "false picture of safety". In reality, there are numerous toxins embedded in the soils on Treasure Island, including radioactive contamination that generates "significantly elevated radiation levels".
Health claims include tumors, cancerous growths, blood contamination, and heart issues. The lawsuit seeks an immediate halt to further development until if and when independent verified reports confirm complete and total remediation of all substances, including radioactive materials.
Lennar and Five Point's Hunter's Point development has also been halted indefinitely under the same concerns. Additionally, it was found that Lennar's soils consultants on Hunters Point - Tetra Tech - had fabricated reports that the similarly-contaminated soils had been remediated. Tetra Tech has also "certified" the soils on Treasure Island.
Counsel for plaintiffs said "It is a travesty that so many people have lived in a contaminated area without knowing the full extent of the radiation they were exposed to". And he also said "we may not know what the full effects of this are for decades".
January 9, 2020 - San Francisco Business Times - Fate of $5 Billion Concord Naval Weapons Station Redevelopment Remains Uncertain.
Lennar Corporation and the City of Concord are at an impasse. Lennar refuses to move forward on the development if it is required to abide by the terms of the agreement the company made with the City of Concord. Concord is requiring Lennar to honor a key component of the City's agreement with Lennar - that Lennar honor Concord's long-standing policy embedded in the City's "Concord First" rule requiring Lennar to pay to pay prevailing wages.
Lennar Corporation has a Bay Area history of not honoring the terms of redevelopment agreements with local municipalities. The company sought numerous changes - only beneficial to Lennar - in dealing with the city of San Francisco on the now-halted Hunter's Point development. Lennar and it's controlled affiliate Five Point are now primary defendants on multi-million dollar lawsuits filed by disgruntled homeowners at Hunter's Point alleging that Lennar and Five Point withheld key information from homebuyers concerning toxic and radioactive soils underneath condominiums sold to unsuspecting homebuyers.
Lennar placed the Mare Island former naval station redevelopment project into bankruptcy after defaulting on virtually every term of the redevelopment agreement. The Mare Island project has never recovered from that bankruptcy process.
In Concord, Lennar refuses to enter into a Project Labor Agreement (PLA) with the Contra Costa Building Trades Council. This is in contravention of the redevelopment agreement entered into between Lennar and the City of Concord. Lennar has threatened to walk away from the agreement rather than honor the terms.
October 20, 2019 - California Political Review - California AG Supports Billion Dollar False Claims Lawsuit Filed Against Lennar Corporation.
A lawsuit has been filed in Sacramento against Lennar Corporation alleging the theft of one billion dollars from CalPERS. The plaintiff is Citizens Against Corporate Crime LLC. The lawsuit is filed under the powerful California False Claims Act on behalf of the People of California. The California Attorney General's office has confirmed the validity of the claim.
Lennar Corporation and its' key executives are fully exposed to this huge claim. Billions of dollars have been paid to California in settlements over the years in False Claims Act cases. Treble damages apply in this case, raising the total claim to over three billion dollars.
April 15, 2019 - Sacramento - California Attorney General Xavier Becerra Announced a $150,000,000 settlement with Morgan Stanley. The settlement resolves allegations that Morgan Stanley violated California's False Claims Act. Allegations included that Morgan Stanley engaged in a scheme to defraud the State's largest pension funds - CalPERS and CalSTRS. Morgan Stanley's scheme resulted in losses of hundreds of millions of dollars to the pension funds.
Attorney General Becerra said "Morgan Stanley lied about the risks of its products and put profits over teachers and public employees who relied on its advice. Today's settlement holds Morgan Stanley accountable for misleading Californians who were unfairly blindsided. Our office has recovered over $1 billion from cheaters on Wall Street since the financial crisis. Our work isn't over".
April 1, 2019 - San Francisco - Five Point Holdings LLC has lost over half of its value since going public on May 10, 2017. Five Point is listed on the NYSE - symbol FPH. Five Point is the principal owner and developer of the troubled Shipyard development in San Francisco. The Shipyard was formerly known as Hunters Point, a development site now known to contain contaminated soils that include nuclear waste and numerous deadly carcinogens. Construction on the site has now been terminated for the foreseeable future.
Five Point also has interests in the Newhall Ranch project in Southern California, and a minority interest in an Orange County development known as Great Parks. Five Point is controlled by former and current Lennar Corporation executives.
Five Point's primary assets are derived from a restructure and renaming of LandSource LLC, a Lennar-controlled entity allegedly used to defraud the giant California Public Employees Retirement System. There is a billlion dollar lawsuit pending against Lennar Corporation over that alleged swindle. It is not known at this time if Five Point Holdings will be named as an additional defendant in that lawsuit.
December 23, 2018 - San Francisco Chronicle: Three Major Banks Suspend Lending for Shipyard Home Purchases. Three major banks have stopped offering mortgages for homes at the former Hunters Point Naval Shipyard, an extraordinary move likely to complicate the already troubled effort by the city and developers to transform 500 acres of waterfront in San Francisco. The banks, Wells Fargo, Chase Bank, and Citi Bank all confirmed to the Chronicle that they are not providing loans to any buyers at the San Francisco Shipyard development. They cited reasons related to unresolved questions about the safety of the land where Lennar Corp. has built about 450 homes and is planning thousands more.
December 21, 2018 - Department of Justice: The Department of Justice recovered over 2.8 billion dollars in 2018 from settlements and judgments in False Claims case actions. Recoveries to the Federal Government since the False Claims Act was strengthened in 1986 now exceed 59 billion dollars.
The Department continued its commitment to use the False Claims Act and other civil remedies to deter and redress fraud by individuals as well as corporations. Over 70 % of 2018 recoveries arose under the Qui Tam provisions of the Act. A DOJ spokesperson said "Whistleblowers have played a vital role in unmasking fraudulent schemes that otherwise evade detection", and "The taxpayers owe a debt of gratitude to those who often put much on the line to expose such schemes".
October 22, 2018 - New York - Lennar stock, which reached a high of over $70.00 per share in January of 2018 continued to decline in the last quarter, and dropped below $40 per share in October, a decline of almost 45% for the year. Analysts cited a decline in the general housing market, rising interest rates, and growing problems and litigation exposure Lennar is experiencing at major development sites in the Bay Area and elsewhere.
October 19, 2018 - San Francisco - A pair of reports released this week cast further doubt on the viability of Lennar's Hunter's Point development in San Francisco. The new reports confirmed that radiation contamination is widespread on the Hunter's Point site, and not just contained in a few isolated parcels as the company represented. The amount of radioactive material, including plutonium, cesium, and uranium is estimated to be a quantity sufficient to "contaminate ten trillion tons of soil", according to the new reports. Cleanup of the site is estimated to take several years. The project is expected to be tied up in litigation for years over contamination issues and homebuyer lawsuits. Homebuyers at Lennar's Shipyard Hunter's Point development who have sued Lennar for non-disclosure of known contamination problems with the site were recently quoted as saying "we were duped".
July 24, 2018 - San Francisco - A lawsuit was filed by homebuyers in San Francisco Superior Court regarding Lennar's Hunter's Point development in San Francisco. The lawsuit, case # - CGC-18-568351, names Lennar and it's affiliates and employees alleging fraud, negligence, and negligent misrepresentation. The suit alleges that Lennar knowingly concealed information regarding toxic and radioactive soils under and adjacent to their Shipyard Hunter's Point condominium development in order sell homes to unsuspecting buyers. Lennar has sold over 450 homes on the contaminated site. Development on the project has ceased and likely may not recommence for years due to the level of soil toxicity and radioactivity directly under and adjacent to the project.
June 3, 2018 - The San Francisco Chronicle - The Chronicle reported that the toxic soils scandal has "widened" at Lennar's Hunter's Point development. It is now believed that virtually the entire development site is contaminated with toxic chemicals and radioactive materials. In the words of a San Francisco official, the situation is "spiraling down". All development activity on the site has been terminated indefinitely.
May 21, 2018 - San Francisco - A class action lawsuit was filed in San Francisco Superior Court on behalf of over 38,000 residents of the BayView community adjacent to Lennar's troubled Hunter's Point development. The lawsuit, case # CGC-18-566188, names Tetra Tech, Lennar, and Lennar' affiliates and employees. The complaint alleges unfair business practices, negligence, negligent misrepresentation, and claims for damages are in excess of 27 billion dollars. The complaint alleges that the defendants knowingly exposed the residents of the BayView community to toxic chemicals, including asbestos, PCB's, solvents, lead, and radioactive material and describes the situation as "The Biggest Case of Eco-Fraud in the History of the United States".
April 17, 2018 - Sacramento - Lennar Corporation was sued for one billion dollars in Sacramento Superior Court for defrauding the California Public Employees Retirement System - CalPERS. The lawsuit was filed by Citizens Against Corporate Crime on behalf of the State of California under the California False Claims Act. The Act has onerous penalties for defrauding the State, including treble damages, penalties, and a recovery of all legal fees and costs incurred to prosecute the claim.
April 14, 2017 - Maryland - An appellate court in Maryland upheld a judgement against Lennar for over $235,000,000 in a land case alleging fraud, bad faith, and breach of contract. Lennar was ordered by a Federal judge to pay the full amount of the judgement. Lennar appealed and lost. Lennar paid the court-ordered judgement and was forced to restate earnings for the year. Lennar is still exposed to claims by the plaintiffs in that lawsuit for payment of all legal fees, costs, and expenses incurred by the plaintiff in that case.
January 27, 2015 - Florida - Lennar Corporation settled a long-running lawsuit filed by the FDIC. The FDIC alleged that fraudulent conduct by a number Lennar executives and a wholly-owned subsidiary of Lennar contributed to the failure of two federally-insured savings and loan institutions. Claims in the case included fraud, constructive fraud, fraud in the inducement, breach of contract, conspiracy, and breach of fiduciary duty. The FDIC alleged that Lennar executives supplied inflated appraisals and fabricated HUD-1 statements to fraudulently obtain money from the insured institutions. The case settled on the eve of trial for an undisclosed amount.