Delray Beach Mayor Tom Carney has been named as a defendant in a lawsuit related to a Ponzi scheme that defrauded hundreds of millions of dollars from investors.
The lawsuit, filed in March through the U.S. Bankruptcy Court for the District of New Jersey, alleges that Carney, along with his brother, Peter Carney, “aided and abetted, substantially assisted, and profited from” a Ponzi scheme orchestrated by National Realty Investment Advisors, LLC. (NRIA), which had been operating as a luxury real estate developer.
The Ponzi scheme defrauded more than 2,000 investors of more than $600 million. In 2024, the de facto “shadow” CEO of the company, Thomas Salzano, was sentenced to 12 years in prison for securities fraud, wire fraud conspiracy, and conspiracy to defraud the United States. Former NRIA CEO Rey Grabato was also criminally charged, but fled the country to the Philippines.
The Carneys allegedly assisted NRIA with its transactions through their company Crystal Title and Escrow Company, Inc., of which Peter Carney serves as president, treasurer, and secretary per a SunBiz listing. Mayor Carney is named as the vice president of Crystal Title in the lawsuit. Mayor Carney and his law firm, Carney Stanton, were also allegedly the attorneys for “the majority of NRIA’s Florida real estate transactions.”
Per the lawsuit, “Without Defendants’ knowing participation and substantial assistance, the Insiders could not have maintained the scheme, nor would the Insiders have been equipped to simultaneously divert hundreds of millions of dollars from innocent Investors while actively concealing the Insiders’ misconduct.”
The lawsuit further alleges that Mayor Carney was used by NRIA as a “business reference” that imparted legitimacy to the company. In an April 2020 email from an NRIA employee to a prospective investor, Carney was referred to as the “Former Mayor of Delray Beach,” having previously served as acting mayor in 2013 following the resignation of Woodie McDuffie. Carney was acting mayor for two months until Cary Glickstein was elected and sworn in.
Other allegations include concealing and facilitating transfers of investor funds to a known felon, Phillip McFillin, who had previously pled guilty to racketeering. The suit alleges that this was done because “Defendants knew that if McFillin’s criminal history had been disclosed to Investors, it would have significantly discouraged new Investors from investing in NRIA while also increasing the risk of regulatory or existing-Investor scrutiny of the scheme.”
The 169-page complaint also alleges that Mayor Carney utilized his political influence and connections to execute the fraud.
“For example, in February 2020, when Salzano and Coley O’Brien (one of NRIA’s principals) were struggling to obtain timely approvals in Delray Beach for a project, Thomas Carney used his political connections to secure a ‘scheduling favor’ from then-Mayor Shelly Petrolia and Commissioner Adam Frankel for NRIA. The following year, Thomas Carney directed Salzano – via the Insiders, NRIA personnel, and NRIA affiliated entities – to make donations to ‘Shelly Petrolia for Mayor’ to assist with the permitting process. Those communications tied requested political contributions directly to project-related governmental action.”
Other accusations within the complaint include facilitating “straw purchases” (purchases made that obfuscate the real buyer), malpractice, fraudulent transfers, and more, with several evidentiary documents attached. Read the full complaint here.
In a statement to Boca magazine, Mayor Carney said, “Carney Stanton, Crystal Title, Peter Carney and Tom Carney deny the material allegations of the complaint, believe the claims are without merit, and state that the Plaintiff has omitted or disregarded certain material facts relevant to this matter. Defendants intend to vigorously contest this litigation and to assert all available defenses, claims, and rights.”
The anti-Carney, pro-City Commissioner Juli Casale newsletter, the Delray Gazette, highlighted the complaint in an email on Sunday. The pro-Carney, anti-Casale Delray Guzzette issued a rebuttal email Tuesday, stating, “Mayor Carney and his brother have denied all allegations. The complaint makes dramatic accusations, as complaints often do, but accusations are not facts and are not evidence.”
The email reiterates that “This is a civil lawsuit, not a criminal case. Mayor Tom Carney is not charged with any crime.”
While the mayor has not been charged with any crime, the case is being trialed in civil court because it’s the only way that the plaintiff—a trust tasked in part with recovering funds from the Ponzi scheme—can be awarded restitution.
A pre-trial conference is scheduled for July 22; expect it to come up at today’s Delray Beach City Commission meeting.
More accusations against Carney of ethical breaches
Mayor Carney was the subject of another ethical debacle last month.
Per reporting by the Sun Sentinel, Carney reached out to the Delray Beach Planning and Zoning Board to voice support for the development of a townhouse project that his brother, Peter, stood to benefit from.
Carney’s defense was that he was reaching out as a private citizen, not the mayor, and that he would recuse himself when the project came before the city commission. He also said he “wanted to know if they had questions.”
Nonetheless, in an email from City Attorney Lynn Gelin, Carney was advised to tread lightly. “I would just caution you that your conversations should not cause a board member to believe that you are somehow attempting to influence how they vote,” she wrote.
As recently as 2024, Mayor Carney was listed as a registered agent of the developer, Ultra Luxury Townhomes, LLC.
At the end of the June 2 city commission meeting, City Commissioner Juli Casale attempted to get consensus to get an opinion from the Palm Beach County Commission on Ethics. Before she could do so, Carney abruptly ended the meeting and told Casale she could file the report herself—which she could have.
The Delray Gazette claimed in an email Monday that “the Palm Beach County Commission on Ethics has started initial inquires (sic) to investigate” a potential violation by Carney. It’s unclear what “initial inquiries to investigate” means considering the Palm Beach County Commission on Ethics doesn’t comment on the details or even existence of active investigations.
The proposed townhouse development is on today’s agenda.
Redevelopment plans for Town Center at Boca Raton
The former Sears building at Town Center mall in Boca Raton could soon become the site of an eight-story hotel, an apartment building, and new retail and restaurant spaces.
Simon Property Group, the developer of Town Center at Boca Raton, submitted plans to the City to redevelop the 32-acre lot. Sears has been shuttered at the mall since 2018.
The proposed residential building would contain 374 units. There’s nothing in the plans that would suggest any of these would be designated as affordable or workforce, but that could change with council input. The residential parking will contain 639 spaces, ten more than is required.
The proposed hotel would have 197 rooms and the retail and restaurant space would span more than 157,000 square feet.
The plans also stress walkability, and will manage traffic though “a centrally located, multi-level parking structure and integrated rideshare drop-off points, effectively ‘calming’ the interior streetscapes.”
The project will likely face an uphill battle with the new city council, a majority of which won on campaigns against development.
