Jim Leusner | Sentinel Staff Writer
July 31, 2008

Before he committed suicide last month, Winter Park developer Steve Walsh stole at least $21.4 million from his business partners, a lawsuit alleges.

Orlando-based Schrimsher & Co. and Schrimsher Investments Corp. are accusing Walsh of secretly misappropriating money in recent years from at least five bank accounts controlled by him and his firm, Broad Street Partners LLC.

The money went to fund wife Paula’s “lavish personal lifestyle,” help buy and maintain three family homes, buy life-insurance policies and make an unspecified $2.5 million donation, according to the suit filed last week in Orange Circuit Court in Orlando.

“My clients and their investors have been gravely wronged by the criminal actions of Mr. Walsh,” Carla DeLoach Bryant, a lawyer for the Schrimsher companies, said Wednesday. “They are working around the clock to recover what belongs to their investors.”

She said her clients also are working with the U.S. Attorney’s Office and FBI on the case. FBI spokesman Dave Couvertier said the agency was “reviewing the matter” to determine whether any crimes were committed.

Named as defendants in the suit were Paula Walsh and five life-insurance companies that wrote policies on her husband. The Schrimsher companies hope to recover money from insurance policies naming Paula Walsh as beneficiary and from the three homes owned by the couple.

The companies include C.M. Life Insurance Co., Massachusetts Mutual Life Insurance Co., AXA Equitable Life Insurance Co., Phoenix Life Insurance Co. and American General Life Insurance Co.

Paula Walsh’s attorney, Bill Wilson, said Wednesday that he had a policy of not commenting on pending litigation.

Walsh’s death ruled suicide

The suit is part of the fallout in Broad Street’s finances in the wake of Walsh’s death June 25. Winter Park police and the Orange-Osceola County Medical Examiner’s Office determined that Walsh killed himself in his backyard with a shotgun.

A week later, J. Steven Schrimsher, an executive of the Schrimsher companies and one of Walsh’s longtime investment partners, said he alerted authorities that money might have been misappropriated and that he was taking over management of the joint ventures.

As of 2007, Broad Street Partners had 10 multimillion-dollar projects planned or under way in Central Florida. Some faltered or faced delays from residents or because of the ailing real-estate market. Those projects included The Carlisle, a Winter Park condominium canceled because of public opposition; downtown Orlando’s Tradition Towers; and Oviedo on the Park.

The lawsuit said Broad Street and investors with the Schrimsher firms were developing assorted business and apartment projects in Florida, North Carolina and South Carolina. Walsh had control over the partnership bank accounts, it said.

10-year pattern outlined

Schrimsher attorneys hired a forensic specialist, retired IRS criminal investigator Paul Hawkins, to review Broad Street and partnership accounts. His investigation found “significant irregularities, including improper unauthorized intra-company loans.”

Broad Street records for its Carolina First Bank account showed the firm was “insolvent,” the suit said.

At least $21.4 million is missing from three planned partnership projects: in Tallahassee, Charleston and Millenia Park in Orlando, the suit said. Hawkins also found that Walsh:

*Made unauthorized money transfers to help Broad Street meet its bills.

*Used partnership funds to maintain his family lifestyle, including operation of “expensive residences” in Charleston; Highlands, N.C.; and Winter Park.

*Made at least $1 million in improper payments to his wife during 10 years.

*Took more than $238,000 to buy an unspecified amount in life-insurance policies.

*Pledged $2.5 million from a Charleston apartment project to an unknown entity.

DeLoach Bryant would not say what organization was involved in the pledge. But in 2005, the Walshes promised $2.5 million to the University of Central Florida’s medical school. UCF officials would not say whether they received any money from the couple.

She said the Schrimsher family has been keeping its investors informed about their investigation and litigation.

“We are aggressively pursuing all legal remedies,” she said. “They have to right a series of wrongs committed by Steve Walsh.”

Source: http://www.orlandosentinel.com/news/local/orange/orl-walsh3108jul31,0,713013.story