MOBILE, Ala. - A federal judge has ordered that the multi-million dollar Gulf Shores beach house at the center of the government's corruption case against Orange Beach officials be sold after lawyers from both sides requested the move, citing the vacant property's susceptibility to vandalism and deterioration.
Former Orange Beach Mayor Steve Russo, City Attorney Larry Sutley and real estate developer Ken Wall were convicted by a federal jury on numerous public corruption counts after a two-week trial in September.
Developer Jim Brown pleaded guilty in June to bribing Russo in order to curry favor at City Hall. Wall was charged for his role in separate schemes to enrich the mayor.
The eight-bedroom, eight-bathroom home is owned by American Lot LLC, a shell corporation Russo, Sutley and Brown created to hold the property.
According to the order U.S. District Judge Kristi DuBose signed a day after the lawyers' Oct.
27 motion, proceeds from the sale are to be placed in escrow pending the outcome of any appeals.
Brown surrendered his one-third interest in the beach house to the government as part of a plea agreement, but Russo and Sutley still each own one-third shares of the property. That includes the remaining principal and interest due on a $1.
75 million mortgage they obtained with Brown in July 2004 to buy the 100-foot-wide property and build the home.
Lawyers asked in the joint motion that Gulf Shores' Kaiser Realty list the house.
Assistant U.
S. Attorney George May told the Press-Register he wasn't sure how Kaiser was selected for the sale, but said that the company's pitch included a reasonable commission of 5 percent.
The 8,300-square-foot home with a pool and elevator was listed by Brown's wife, Mona, a real estate agent, for $3.
2 million prior to the indictments.
May, who is handling forfeiture proceedings in the case, said that unlike other assets the government seeks, cash is better than the beach house because the home must be maintained to hold its value.
Prosecutors won't try to sell other assets - including a BMW sedan and undeveloped Orange Beach lots that jurors concluded Russo bought with bribe money - until after the outcome of appeals.
Should the convictions stand, third parties, such as banks, would be able to stake their claims on seized assets and the remainder would be divvied up among government funds, May said.
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