TAMPA — A federal judge has ruled that a Clearwater businessman is liable for a $122 million shortfall found in the books of a bankrupt St. Petersburg nonprofit that oversaw medical trust funds for more than 2,000 injured and disabled people.
Middle District of Florida Judge Roberta Colton this week signed a summary judgment against Leo Govoni that was brought by bankruptcy trustee Michael Goldberg. It empowers him to go after the assets of Govoni, whose Boston Finance Group was given a $100 million loan from the Center for Special Needs Trust Administration.
The judge also approved the trustee’s request for a temporary restraining order preventing Govoni from selling off assets from more than 100 companies that either he owns or received funds from the center.
In requesting the order, Goldberg stated that money transferred to Boston Finance was moved onto many other of Govoni’s companies. The list includes Big Storm Brewing, the craft beer business based in Clearwater that Govoni ran with his son.
Govoni is also at the center of an FBI investigation into the finances of the center. Court records state that the nonprofit approved the loan shortly after Govoni quit as the center’s director in 2009. It was taken from trust funds set up for children with Down syndrome and other disabilities, people no longer able to work because of medical conditions and victims of road accidents who need lifelong expensive medical care.
The money was never fully repaid.
Goldberg sued Govoni and Boston Finance as part of his attempt to recover as much of the missing bankruptcy estate as possible. The lawsuit included a copy of paperwork that listed Govoni as the guarantor of the loan.
The restraining order will expire after 14 days but Judge Colton is scheduled to hear argument Tuesday morning on a more permanent injunction.
She wrote that the records submitted by the trustee and his legal team prove a “substantial likelihood” that, without the restraining order, Govoni and his associates will transfer or “dissipate assets” that were purchased with money taken from the trust funds.
“The (trustee) has shown a likelihood of entitlement to either all or a substantial portion of the defendants’ assets,” Colton wrote.
It’s unclear how much Govoni’s companies are worth.
His portfolio includes real estate companies that own property. But Govoni in August agreed to an injunction to sell 11 properties in Florida and Kentucky worth about $3.8 million to help resolve a civil complaint brought by the Florida Attorney General’s office.
It had accused him and business associates of stealing more than $2 million from a second trust fund nonprofit that was administering 48 trust funds. It prompted the judge in the Pinellas County case to temporarily freeze his bank accounts.
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![Leo Govoni, right, is accused in bankruptcy records of taking $100 million in an unpaid loan from medical trust funds set up for the disabled and injured. The funds were being managed by the Center for Special Needs Trust Administration, a nonprofit that Govoni founded along with attorney John Staunton, left.](data:image/svg+xml,%3Csvg xmlns="http://www.w3.org/2000/svg" viewBox="0 0 620 466"/%3E "Leo Govoni, right, is accused in bankruptcy records of taking $100 million in an unpaid loan from medical trust funds set up for the disabled and injured. The funds were being managed by the Center for Special Needs Trust Administration, a nonprofit that Govoni founded along with attorney John Staunton, left.")
A financial adviser, Govoni founded the center in 2000 along with Pinellas attorney John Staunton. He grew it into one of the biggest trust fund administrators in the nation.
More than 1,500 trusts were siphoned for the loan, which was paid out over a 15-year period, court records state. It left some families of disabled and injured individuals struggling to pay for medical and living expenses.
Court records state that Govoni orchestrated the loan by maintaining control of the center even after he left. Companies that he owned were contracted to run the nonprofit’s accounting, payroll, I.T. and human resources.
Govoni lived a lavish lifestyle after the line of credit was approved, records show. He flew friends on his $3.4 million private jet to watch the Kentucky Derby from his executive suite at Churchill Downs. He doled out hundreds of thousands of dollars in campaign contributions to politicians.
He has not been charged with any crimes and his attorneys have said that he denies the allegations.
His attorneys disputed the amount of liability in hearings on the summary judgment, stating that Govoni likely owed the center around $30 million.
But the judge was swayed by an analysis of the books of both the center and Boston Finance by Kevin McCoy, a forensic accounting and investigator hired by the trustee.
McCoy said in an affidavit that his investigation showed that just under $100 million from the center had been transferred to Govoni’s company and that $39.4 million is owed in unpaid interest. Boston Finance paid back $18.8 million, McCoy found.
