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Outback Co-Founder and Son Sue Builder

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By MICHAEL SASSO | The Tampa Tribune

Published: January 13, 2009

TAMPA - Hoping to boost to his son's real estate development career, Outback Steakhouse co-founder Chris Sullivan hired an Odessa builder to mentor his son and help make his first major development project a success.

Instead, Sullivan now is accusing the builder, Gunther Flaig, of misappropriating $1 million from his son's fledgling firm, Palmcrest Homes of Tampa Bay, according to a lawsuit Sullivan filed last month in Hillsborough County circuit court.

In their lawsuit, Sullivan, his son, Alexander Sullivan, and business partner Adam Schoenbaum ask a judge to order Flaig to produce an accounting of the company's funds so they can determine what happened to the money.

Flaig did not return a call to his cell phone Tuesday.

Alexander Sullivan and Schoenbaum spent several years assembling chunks of land in Oldsmar for a housing development, the lawsuit says. Chris Sullivan funded the land acquisition. The project and a second in Pasco County are still under development.

By September 2006, though, Chris Sullivan realized the scope of the Oldsmar project required an experienced hand. After an introduction by a local banker, Sullivan hired Flaig to both mentor his son and guide the company's real estate deals to fruition. Flaig represented himself as a longtime builder and president of a development firm called Schickedanz Bros. West.

Sullivan kept a close watch on his son's development company and in August began noticing some financial irregularities. Those irregularities are the subject of the lawsuit.

Among them:

Undisclosed and improper loans. According to the suit, Palmcrest Homes had nearly $15 million in credit available to it, provided by Bank of America and Sullivan himself.

Instead of tapping into those funds, though, Flaig secretly obtained loans worth at least $915,000 from his old employer, Schickedanz Bros., and used the money to pay Palmcrest Homes' bills. Flaig and an associate then repaid Schickedanz Bros. using $1 million from Palmcrest Homes.

Cover-up. After Chris Sullivan discovered the undisclosed loans, Flaig and an associate tried to cover up their actions by destroying more than 3,000 e-mails, among other actions, the lawsuit says.

Charles Harris, an attorney with the Trenam Kemker firm who is representing the Sullivans, said he doesn't know why Flaig would obtain loans from an unauthorized source rather than tapping the money available to Palmcrest Homes. The Sullivans and Schoenbaum want to know whether all the money was used for Palmcrest's business or if some was diverted for Flaig's personal use.

They accuse Flaig and an associate of conspiracy to commit fraud and other charges in the lawsuit.

"It's unclear to us exactly what Mr. Flaig's intention was," he said.

Reporter Michael Sasso can be reached at (813) 259-7865.

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