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Fraudster’s Fort Lauderdale Airport Hangar And Luxury Apartment Go Up For Sale

A private hangar and office at Fort Lauderdale Executive Airport is up for sale as their owner liquidates assets to pay two fraud judgments totaling $124M. 

The listing includes a recently completed 20K SF Class-A office building connected to the 18K SF hangar.

The FXE Gateway Complex at 1200 and 1400 NW 62nd Street has direct runway access, with a 20K SF office and 18K SF private hangar that can accommodate four planes, according to a release. The buyer will also get a luxury two-bedroom apartment at the top of the hangar with a safe room and balcony overlooking the airport runway. 

“When you have a bankruptcy sale, it tends to attract a lot of people because they realize the property has to trade,” John Crotty, a principal at Avison Young whose team is marketing the property, said in an interview Tuesday. “This isn't a fishing expedition.”

Crotty is working with Michael Fay, David Duckworth, Brian de la Fé and Philip Shapiro to market the sale. Carol Fox at B. Riley Advisory Services is the liquidating trustee of the bankruptcy.

The 10.7-acre property which spans two parcels includes vacant land on its western portion that could be further developed with additional industrial space.

Bids for the unpriced property are due by August 1, and the sale is expected to close before the end of the year, Crotty said. 

“This will be provided free and clear of any kind of liens or any kind of litigation,” Crotty said. 

Since launching the listing this month, Crotty said his team has been fielding inquiries primarily from two types of buyers: high-net-worth individuals looking to utilize the office space and have a place to park their private planes and small-bay industrial developers who want to add more industrial space to the property. 

Acquisition of the property includes unlimited access to the airport runway at no additional cost.

The airport ownership is “extending the runway from 6,000 to 7,000 feet to allow more trips, and they have a 24-hour air traffic control tower,” Crotty said. “Obviously, we're in South Florida, so you have high-net-worth individuals who are looking for that type of access.”

FXE Gateway is being sold by Cypress Creek Florida LLC, which paid $10M for the property in 2003, property records indicate. The Class-A office building was built in the last couple years and can be subdivided for multiple tenants, Crotty said.

The hangar has direct runway access that a buyer will be able to utilize at no additional cost.

The Cypress Creek entity is registered to a Russell Lynn Kitchen in Fort Lauderdale, with Daniel Hurt as an authorized agent. Hurt agreed in May to pay more than $27M in civil court to resolve medical fraud allegations, roughly two years after he pleaded guilty in criminal court to three counts of conspiracy and agreed to pay more than $97M in restitution for a scheme to defraud federal health insurers like Medicare. 

Hurt paid kickbacks to recruiters who collected samples for cancer risk screening tests through health fairs and telemarketing solicitation. The samples were sent to labs controlled by or working with Hurt, which would conduct unnecessary tests and bill Medicare or federal healthcare programs for veterans. 

The labs funneled the repayments to Hurt, with some facilities taking a kickback as part of the deal. 

The fraud — which spanned Pennsylvania, New Jersey and Florida — also included fake prescriptions for expensive compounded medications that were filled by a Hurt-controlled pharmacy, which took insurance reimbursements but never created the compounds. 

Hurt received at least $26.9M in kickbacks from Medicare reimbursements alone, according to the Department of Justice. At least $3M of those funds were used by Hurt to purchase a luxury boat in Florida that he christened “In My DNA.” 

The boat was surrendered as part of the 2022 settlement. 

“We will not tolerate those who prey on older Americans to defraud Medicare,” Brian Boynton, head of the Justice Department’s civil division, said in a statement announcing the civil judgment. “As this settlement reflects, we will use our available resources to protect federal health care programs and the beneficiaries they serve.”  

The scheme was unraveled after Robert Gerstein, who had worked with Hurt to commit the fraud as a medical billing operator, filed a whistleblower claim under the False Claims Act. Gerstein will receive up to $4.7M, or 17% of the total civil agreement, as part of the civil settlement.