Elizabeth Fago, the Palm Beach Gardens businesswoman who went from near-unknown to one of the state’s most visible women in less time than it takes to spell “overachiever,” works at a desk bearing this sign: “Well-Behaved Women Rarely Make History!”
Making history – or at least putting her stamp on it – is well within the grasp of this self-made woman who owns 150 companies and seems to be making a fortune buying and running nursing homes.
Six months ago, she was handpicked by Gov. Jeb Bush, whom she calls a friend, to sit on the board of the Scripps Florida Funding Corp. As chair of the board’s audit committee, Fago oversees the state’s spending of $310 million to help the prestigious Scripps Research Institute settle in Palm Beach County.
In a world where money talks, Fago, 53, has been screaming – and gaining in stature. She pledged $1 million to Scripps. She and her companies have made gifts to Republican causes totaling at least $400,000 since 2001. She co-hosts fund-raising parties that rake in $400,000 a night and is closing in on the $1 million mark as a fund-raiser, making her a key player in the reelection campaigns of Republicans such as President Bush and U.S. Reps. Katherine Harris and Mark Foley.
But if the sign on her desk hints that Fago sometimes falls short of the “well-behaved woman” mark, well, that’s true, too.
The Palm Beach Post has found through public records that the Internal Revenue Service filed liens against her nine times to recoup unpaid income taxes. The last of these liens was cleared in May 2000, when Fago paid $75,000 she had owed for 15 years.
Fago also has been a defendant in at least 35 lawsuits brought by local residents, a landlord, merchants, lawyers, doctors, partners, an employee and financial services companies – primarily for nonpayment and breach of contract.
She also had some bumps in her personal life. For a time, she was married to a man who was a key figure in one of the largest, best organized drug gangs in Palm Beach County history.
Scripps Florida Funding Corp. Chairman Marshall Criser described the revelations of Fago ‘s troubles as “things that should be looked into and discussed.” Criser said Fago ‘s “service has been good service so far. . . . The board will have to see where the matter goes.”
Fago , meanwhile, said she wondered why her past is being brought up.
“Most of these things are old,” she said. “I’ve worked like a dog to achieve what I’ve achieved.”
Admirers and detractors
To her admirers, who include many movers and shakers, “Betsy” Fago is the consummate can-do woman.
“She’s a once-in-a-lifetime partner in a not-for-profit organization,” said Will Ray, director of external affairs for Scripps Florida. “She is a world-class fund-raiser.”
“She gets things done,” echoed Palm Beach County Commission Chairwoman Karen Marcus. “She is very family-oriented. Always looking out for her kids. She is well-liked. A lot of fun.”
As is the case with many people who work their way into the limelight, Fago has accumulated her share of detractors. One of them is a fellow member of the Palm Beach County Health Care District Board, the local panel that runs health care for the indigent. Jeb Bush appointed Fago to that board in 2002.
“Betsy is the Leona Helmsley of South Florida,” the board member said, referring to the New York City hotelier famous for making employees cry and declaring that paying taxes was for “the little people.”
“When you see her coming to meetings with a rhinestone-encrusted cellphone on which she makes loud calls about which politician should or should not be allowed on her jet, you feel like saying: ‘We work for poor people. Why are you rubbing your wealth in their faces?’ ”
The board member, who asked to remain anonymous because of Fago ‘s clout, called her “imperious.” Fago herself admitted in a Post interview that some of the 120 employees at her company’s headquarters on PGA Boulevard have taken to calling her “The Queen.”
A marriage not mentioned
Fago ‘s own riches-to-rags-to-riches story starts with true grit, Rust Belt work ethic and unmitigated gall, according to the woman herself and acquaintances. Add a dash of street smarts, boundless enthusiasm, salesmanship, a good dose of political savvy, a pinch of good luck, good looks and a fun streak. Then sprinkle in some corner-cutting and a pervasive buy-now-pay-later attitude – the stuff that tends to be forgotten once success comes.
Trying to piece together Fago ‘s story, however, isn’t simple. Several times during interviews for this article, Fago either omitted or put her spin on clear-cut facts that appear in official documents.
On May 24, for example, she told a reporter twice that she was married to only two different men and didn’t marry again after her 1984 divorce. When informed in a follow-up interview May 28 that marriage and divorce records showed she failed to mention a third husband – a drug dealer she married in 1985 – Fago simply said: “That was just a small part of my life. I’m not going there.”
She then said she had no contact with the man, Milton Keith Pinder, when he was running dope from the islands. According to court records, federal authorities nabbed Pinder for crimes committed between June 1983 and November 1985. He and Fago wed in June 1985. What Fago says she didn’t know was that Pinder was part of the Pinder Cartel – a marijuana- and cocaine-importing gang brought down after a two-year investigation that reached as far as Pablo Escobar’s empire in Colombia. Pinder pleaded guilty to conspiracy and was in jail until 1993.
In another interview June 1, Fago finally said: “As soon as I got wind of what he was doing, I left. It took me eight months to shake him off.”
Head of the family
There are more positive facts about her life that Fago readily offers. She said she was born in the relatively comfortable family of Joseph Fago , a developer in Buffalo, N.Y. Her mom, Marian, raised young Betsy with her three brothers, Joe, Tom and Tony. Joe died of AIDS, Fago said. She said the other two now work for her, along with her mom, two of her children and several nieces and nephews.
Fago spent two years at a private liberal arts college in Buffalo, then called Rosary Hill College, now Daemen College. She never graduated.
“I was married young and had children early,” explained the devoutly Catholic Fago , who was then married to her elementary school sweetheart, Stephen Walczak, an accountant.
By then, she was already involved in politics.
“I was a Nixonette,” she said proudly. “It was a cheerleading crew. We wore short skirts with high boots, and we had a ‘Nixon’ banner across the chest.”
Fago had barely turned 20 in 1970 when her father moved to West Palm Beach. Betsy and Walczak, who then had one son, Paul, followed. Things, however, soured.
“We were ripped off by a business partner,” Betsy Fago said.
To make matters worse, Joseph Fago was stricken with an incurable infection, the result of a routine dental procedure, and died in 1974.
“From one day to the other, I was caring for my entire family,” Fago says, her eyes tearing up. She had a second child, Stephanie, and was getting divorced from Stephen. “And my dad made me understand I would have to be watching over my mother and my brothers. I was still in my early 20s. I started from scratch.”
Fago acknowledges she had a hard time financially for nearly 20 years. She sold real estate, but not enough to pay the bills, she said. She remarried and re-divorced Walczak. She then married and divorced Miami arts dealer J. Barton Carver, with whom she had a second son, Joey.
‘Only the best for Betsy’
Fago ‘s problem, said someone who worked for her in the mid-’80s, was that – rent or not, mouths to feed or not – her taste for all things luxurious far exceeded her disposable income.
“Only the best for Betsy, always,” said Leanna Ryder, a Boca Raton woman who worked for Fago ‘s Palm Beach real-estate shop in 1985. She quit when, she says, Fago stiffed her out of a $5,000 commission. A Palm Beach court ordered Fago to pay up. It took three more years for Ryder to get her money.
“Betsy didn’t have money for faithful employees,” she said, “yet she was driving a BMW around and flashing her 5-carat diamond.”
Fago was also getting into trouble with the IRS, local businesses and the law – facts that did not keep her from recently being named to chair the audit committee of the Scripps Florida Funding Corp. The committee hires auditors, goes over audits to ensure that money is going to the right places and ensures that Scripps fulfills its promises to the state, mainly the creation of 545 high-level jobs.
In the 1980s, however, Fago was facing audits of her own finances. According to IRS records, the agency filed notices of tax liens on Fago ‘s local properties nine times between 1978 and 1990 for failure to pay her income tax. In 1991, she owed more than $110,000 in back taxes.
At first, Fago admitted having had one federal tax lien against her property. Later, in a June 1 interview, she acknowledged “two or three.”
“I was a single mother raising three kids,” she said. “I was worried about feeding them. If I didn’t pay on time, then so be it.”
Most of the liens were released, according to county records, by 1995. But until the year 2000, Fago still owed the federal government $75,000 on her 1985 and 1986 taxes – which she filed jointly with Pinder, the drug dealer.
Mike Dobzinski, spokesman for the IRS in South Florida who spoke in general terms because he cannot discuss specific taxpayers, said liens are filed against the properties of people who do not file tax returns or send in returns that underestimate the taxes due.
“A lien is a serious thing,” he said. “We assess the taxes properly and send notices to the taxpayer. If he doesn’t respond after four or five notices, we put a lien on his property.” Usually, he said, the taxpayer has 10 years to pay up. Once he does, the IRS issues a certificate of payment, which releases the lien.
“I don’t owe anyone anything anymore,” Fago said.
In financial documents she submitted to the state when she was named to the Health Care District Board, Fago revealed that she had once been the subject of a bankruptcy proceeding. She wrote on her application that the documentation for the 1981 case can no longer be found. She said she filed jointly with husband No. 2, Carver.
Long list of suits
Fago ‘s name, meanwhile, also figures prominently in the county’s court records. About 35 locals have sued her – mostly for nonpayment or breach of contract. The disputed sums range from a couple hundred dollars to $1 million.
In 1986, she was taken to court by Old Town Flower Shop in West Palm Beach for failing to pay for $200 worth of flowers. It took 13 years – until 1999 – for the shop to gets its money.
“It’s kind of scary to know that someone with cojones that large has worked her way up to an important state board,” said Old Town co-owner Lee Davenport. “If I hadn’t paid my bills, my credit history would be haunting me. Why isn’t her credit history haunting her?”
Also in 1986, she was evicted from her rental apartment in Juno Beach for not paying rent. In 1988, a jury ordered Fago , a deep-sea fishing enthusiast, to pay $7,220 to Gold Coast Diesel, a Riviera Beach boat-engine service company. The same year, she was ordered to pay the Fort Lauderdale law firm Brinkley, McNerney and Morgan $14,550 for legal work.
Other locals who sued Fago and won judgments include Schooley Cadillac, Roger Dean Chevrolet, Village Decorating Center, Jacobson’s and J&K Standard Appliance. And then there were the law firms of Douglas Willis of Palm Beach Gardens, and Boose, Casey and Ciklin of West Palm Beach. The Palm Beach Orthopedic Hand Center put a lien on her property for nonpayment in 1986.
Two Palm Beach County judges also became interested in Fago . In May 1985, a grand theft warrant was issued for her arrest. A year later, another judge issued another warrant for writing a worthless check. Fago , however, was never arrested.
“That was absolute nonsense,” Fago explained. “A former business partner made accusations, but it was dropped. . . . As for the rest, I was just trying to feed my children.”
Fago fights back
Some folks still are asking for money they say she owes them. Only these days, she countersues.
In January 2000, the Marble and Granite Group sued Fago because she stopped payment on a $9,000 check to the company after it installed $16,000 worth of marble in her home. Fago countersued, saying the company didn’t do the job right. Hundreds of pages of litigation and three years later, Fago ended up paying $5,000.
“Hey, you would sue, too, if the job wasn’t done right,” she said.
Also in 2000, she and the North Palm Beach law firm of Cohen, Chernay & Norris settled a six-year lawsuit in which the firm accused her of leaving $100,000 worth of bills unpaid. Fago countersued, saying the firm didn’t represent her to her satisfaction. The settlement remains confidential.
And just this past October, her longtime confidant and lawyer, Robert Shapiro of Palm Beach Gardens, went after her and one of her companies for alleged breach of contract. He wants $1 million. Shapiro, who didn’t return calls for comment, describes in his complaint how he became a shareholder in Fago ‘s Healthcare Acquisitions Co., which buys nursing homes. According to company bylaws, Shapiro claims, the company must purchase and maintain a $10 million life-insurance policy on Fago and a $5 million policy on him. Under Fago ‘s direction, he claims, his policy was allowed to lapse while Fago ‘s continued. He also accuses her of directing him to undervalue artificially the company’s assets.
Fago countersued again, claiming, in a nutshell, that Shapiro took advantage of her.
None of these troubles has stopped Fago from becoming a seemingly successful businesswoman, especially over the past four or five years. She lives in an Intracoastal mansion on Palmwood Road in Palm Beach Gardens, a home she says no one could touch for less than $6 million. She says she co-owns another home with dairy king Billy Bowman, in the Bahamas.
One of her companies, Symphony Aviation, owns a 1985 Cessna Citation jet and employs two full-time pilots. She wouldn’t comment on how much the plane cost when the company bought it in 2001, but similar planes fetch around $1.5 million, depending on equipment, according to broker Web sites. And she likes to alternate between a $120,000 Mercedes SL 500 AMG and a $130,000 Mercedes SL 600 to drive to a new office on PGA Boulevard.
Fago has also become a charity fixture. In addition to the $1 million she pledged to the Scripps Institute – with the first $100,000 installment due in December – she says she’ll be chairwoman of the Palm Beach Leukemia Ball in December and honorary chair of the Cancer Ball in North Palm Beach.
So, how did Fago go from owing chump change to a flower shop to flying to Aspen on her private jet and giving big money to charities and politicians?
“I just over-leveraged like crazy,” Fago recently stated matter-of-factly in her office, explaining how she bought a couple of nursing homes in the early 1990s and now provides work for 8,500 employees throughout the Southeast. “You just put out bond issues, or you leverage 125 percent of the value of a nursing home. If you pick the right homes, the business will naturally pick up.”
Fago ‘s rhinestone phone, with her initials in pink stones on the back, does ring constantly.
“This phone is so me,” she says. “Every one of my employees has the number.”
She is surrounded by photos of herself with famous people, items that make you want to ask: “Who’s that person next to Betsy Fago ?” In some cases, “that person” is Pope John Paul II, the president of the United States or the governor. It’s rocker Bruce Springsteen. It’s first lady Laura Bush, in a picture taken at the 2001 White House Christmas party. In many shots, Fago wears her trademark low-cut neckline.
“Here, I’m wearing broad-tail sable,” she comments while showing another picture of herself at the White House.
Quickly, she gets back to nursing homes and explains she was approached in 1990 by a Canadian real estate client who wanted to buy a nursing home in Florida.
“I noticed that most brokers involved with nursing homes weren’t doing anything and making big money,” she said. “I told myself I could do better than them. So I started brokering more nursing-home deals. I started buying and running them.”
Fago says she finds nursing homes that are failing, usually in poor, far-flung places in Tennessee, Georgia and Alabama, and tries to make them profitable.
“I sell to the masses,” she says, “not to the classes.”
The nursing homes are often the only ones in a county, putting pressure on public officials to make sure she succeeds. That’s how she bought her first four places, according to court records. She convinced officials in four Georgia counties to finance bond issues to help her buy them.
Early on, Fago said, she didn’t know what she was doing. Some of her companies came close to filing for bankruptcy.
“In 1999, the entire nursing-home industry was teetering,” she says. “But I refused to file. I presented a plan to the vendors and creditors, and they believed in me.”
Coincidentally, the Clinton administration changed the way nursing homes were reimbursed for low-income residents and, suddenly, profits were higher. In time, Fago owned 74 nursing homes, all subsidiaries of the Palm Beach Gardens-based Home Quality Management.
How solid is her empire? Since Home Quality Management is privately held, no public information is available. But court documents show that Fago still borrows.
According to lawyer Shapiro’s lawsuit, Fago had to write him a promissory note in March 2001 on behalf of Home Acquisitions Inc. because the company couldn’t pay his $289,990 fee. The note was paid off in July 2002.
On her 2003 Statement of Financial Interest required by the state, Fago listed no stocks, bonds or certificates of deposit, and listed her house as her only asset.
Has governor’s confidence
This, meanwhile, isn’t the first time that questions have surfaced about some of the major players in the establishment of the Scripps Research project. In November, Scripps Florida Funding Corp. board member Peter Henn of Boca Raton was asked to withdraw. A development lawyer, Henn was a defendant in a number of lawsuits brought by unhappy home buyers and a sexual harassment claim. Henn quit after reporters asked his sponsor, Florida House Speaker Johnnie Byrd, about Henn’s history.
Also, Dan Catalfumo, the high-profile local builder who was picked to oversee construction of the Scripps project’s biotechnology park, could be facing a minimum of 18 months in prison on charges he beat his girlfriend, causing injuries that required 53 stitches and five staples to her head. His trial is set for this summer.
Through his press office, Gov. Jeb Bush said he has full confidence in Fago ‘s abilities and that her contributions will benefit all Floridians. He didn’t answer whether his office did a background check before appointing her.
When Fago was appointed to the Health Care District Board, state insurance officials ran a 12-page credit check on her. Members of the Scripps Florida Funding Corp. did not have to submit to one, according to the application forms.
“I thought we were all supposed to get checked out in some fashion,” a stunned Scripps Florida Funding board chairman Criser said.
County Commissioner Mary McCarty, who took Fago to the Vatican to see the pope last year, recommended her to the governor. She called The Post’s inquiries into Fago ‘s background “offensive.”
“The only relevant issue should be the current state of her affairs,” McCarty said of Fago , the only local member of the nine-person Scripps Florida Funding board.
Fago says she doesn’t see herself as a dark cloud over the project.
“Why should this stuff exclude me from serving?” she asked. “I’ve done nothing I’m not proud of. I built a wonderful business. Everything I’ve done was hard work and diligence, and I’ve not hurt anyone in the process. I’m too Christian for that.”