When Charles Kelty first met Melissa Jerace at a downtown West Palm Beach cafe, he didn’t like her.
“She was very cocksure,” he said of the woman with bleached blonde hair who quickly became a regular at Subculture Coffee, a popular gathering spot for recovering addicts who have traded liquor for lattes.
As the 50-year-old, seasoned West Palm Beach businessman grew to know Jerace, his opinions changed.
Having both been sober for decades, Kelty said he warmed to Jerace as they talked about their shared desire to help others beat their addictions. When Jerace showed him her detailed plans to establish a treatment center in Barbados to serve drug ravaged children of wealthy parents in the Caribbean and south and central America, he was intrigued.
In early summer 2016, he loaned Jerace $220,000 to help her establish a pharmacy that was to be part of her luxury treatment center, Casa de Luz or House of Light.
Two years later, Kelty believes his initial doubts may have been right.
He is among a group of recovering addicts, including a physician and one of Jerace’s former boyfriends, along with several other businessmen who say they were duped out of roughly $1 million by the friendly and earnest 49-year-old West Palm Beach woman who never established the promised treatment center in Barbados.
“The list of people she ripped off is very long. She’s run through a couple of million dollars,” said attorney Andrew Fine, who reviewed Jerace’s financial statements as part of the lawsuit he filed in Palm Beach County Circuit Court on behalf of Kelty, who goes by the nickname “Chic.”
Jerace, who moved to Thailand after the lawsuits were filed, denies the allegations. She said the litigation stems from frustration and anger, tinged with a bit of buyers’ remorse.
“I understand people are upset, but investing in a business is risky especially a business in a Third World country,” she said during a phone call from Thailand. “It’s not some mythical thing that happened. Unfortunately, it failed. I’m not the only person in the world who had a business that failed.”
Attorney Michael Pike, who represents a group that is suing Jerace in U.S. District Court in West Palm Beach, said the issue is not failure but fraud.
Dubbing her plans for the treatment center “the Fake Business Venture,” Pike said Jerace created it for one purpose. The venture, he said in court papers, “was an elaborate hoax to steal millions of dollars from unsuspecting investors.”
Further, he said, Jerace got high-powered help to carry out her scheme. Pike and attorney Talina Bidwell are suing U.S. Bank and a senior vice president at the branch in Palm Beach, Nicholas Pollard, who wrote a letter describing Jerace as a wealthy woman capable of bankrolling an $11 million project that including buying a sprawling former five-star hotel and turning it into a treatment center.
“Pollard and U.S. Bank fraudulently and negligently participated in Jerace’s theft by knowingly providing false asset and bank account verifications for Jerace, who was never even a customer of U.S. Bank,” Pike wrote.
Attorneys representing the bank and Pollard didn’t return phone calls or emails for comment. But in court papers they reject Pike’s allegations as both frivolous and inaccurate.
“The U.S. Bank defendants deny that the letter is genuine and have no knowledge of it,” attorneys Thomas Cunningham and Michael De Simone wrote, asking U.S. District Judge Kenneth Marra to throw out the lawsuit against Pollard and the bank.
However, Pike countered, the bank’s claims of ignorance are contradicted by documents filed in Barbados that show Jerace listed Pollard as a member of the board of directors of her proposed treatment center. Further, he said emails show Pollard was helping Jerace contact wealthy businessmen in Barbados.
“I can’t even defend myself”
The heated litigation became complicated when Jerace, during a brief return to Palm Beach County late last year filed for bankruptcy protection, a legal maneuver which automatically puts a halt on civil lawsuits. Then, she abruptly moved to Thailand.
Jerace said she had no choice.
A website she hoped to use to promote her Barbados treatment center instead was used to spread vicious lies about her, she said in a now dormant lawsuit she filed in November. She claimed she hired someone to create the website and doesn’t have the login credentials. The unnamed former employee denied having them either, she claims.
While she filed the Jane Doe lawsuit in hopes of flushing out the person who is smearing her online, in the meantime Jerace said she needed to make money. When a job opportunity came up working in a treatment center in Thailand, she said, she grabbed it.
Her first job was short-lived. Jerace left it and took a job at a school after the owner of the treatment center checked out her credentials and learned she doesn’t have a doctorate in philosophy from Nova Southeastern University as she claimed. University officials said they have no record that Jerace ever earned a degree from the school.
She does have certificates to work as a substance abuse and gambling addiction counselor, said officials at the Tallahassee-based Florida Certification Board, a nonprofit agency.
Jerace bemoaned her current predicament. The move halfway around the world has made it difficult to deal with the “completely off-base” allegations, she said.
“I can’t even defend myself,” she said, adding that she is also emotionally drained. “I personally feel terrible. I loved them,” she said of the people who are accusing her of ripping them off.
“Very brilliant and manipulative”
Like Kelty, whom she met at Subculture Coffee, the others who are suing her were also friends and, in one case, a former fiancé.
Dr. Adam Bianchini, who practices addiction medicine after losing his ability to work as an anesthesiologist because of his substance abuse, said he met Jerace roughly eight years ago through others involved in Alcoholic Anonymous and the CityPlace campus of Christ Fellowship Church.
Although Jerace was raised Jewish, she embraced Christianity, Bianchini said. She was even baptized. “She came to our Bible study meetings. She played the part of a good friend,” said the 56-year-old physician who lives in suburban Lake Worth.
So, when Jerace pitched the idea for the treatment center in Barbados, Bianchini said he and his two friends, fellow recovering addicts Arnold Lane Klauschus and William Peevy, listened.
Bianchini and his wife loaned Jerace $265,000 after she promised to pay him a six-figure salary to be a medical director of the treatment center in Barbados, according to the lawsuit Pike filed on his behalf. Jerace made similar promises to 73-year-old Klauschus and 45-year-old Peevy, who was briefly engaged to Jerace. Peevy said he remained friends with Jerace even though they were no longer engaged.
Klauschus, who dipped into his retirement nest egg to loan Jerace $185,000, was to be director of pharmaceuticals. Peevy, who loaned Jerace $185,000 from money he earned developing an app, was to manage the inventory at the pharmacy. She promised them all returns on their investments of as much as 140 percent, Pike said.
“Unfortunately, none of Jerace’s representations … were true,” Pike wrote.
Kelty, who doesn’t know the others, said Jerace’s promises to him were nearly identical. A job. Big returns. A chance to help addicts. The only thing he got back from Jerace, he said, were checks that bounced.
Texas resident Lance Hupfeld also fell victim to the same scheme, he says. In another lawsuit filed here, Hupfeld, who was involved in Safe Harbour Recovery Center in West Palm Beach, said he loaned Jerace $100,000, which was never repaid. While Hupfeld declined comment, his Fort Lauderdale attorney Robert Nicholson said the money was for a treatment center in Barbados.
Those who invested in the venture said they had good reason to trust Jerace. The business plan she said was prepared by international accounting giant, KPMG, was impressive, Kelty said.
Further, she portrayed herself as a wealthy woman, regularly flying off at a moment’s notice to do what she described as interventions to save struggling addicts in far-off countries.
“At the time I met her she supposedly had an $18 millon trust fund and got $30,000 a month,” said Peevy, who lives in Palm Beach Gardens. “She’s a very brilliant and manipulative woman.”
Bianchini said Jerace played the part of a high-roller when he, Klaschus and their wives visited her in Barbados in September 2016 and again in January 2017. She was working out of an impressive office. The couples were squired around by Sotheby’s real estate agents who showed them multi-million-dollar property Jerace said she planned to purchase. Bianchini said he met with hospital officials to set up protocols for the treatment center.
“She knew exactly what buttons to push and what to say to get us to rollover,” Bianchini said.
Dustin Delany, an attorney in Barbados, said many in the island nation were fooled. Jerace portrayed herself as a Palm Beach socialite. She said she was “a trust fund kid,” he said.
Delany, who is also a Florida lawyer, said he became suspicious when Jerace told him she attended the Deerfield Academy, a prestigious boarding school in Massachusetts. A graduate of elite boarding schools in the Northeast, he said he knew Deerfield was an all-boys academy during the years Jerace would have been a student.
Other things also didn’t add up, he said. While she touted her Palm Beach credentials, her address was a post office box.
Jerace insisted she was wiring him money to cover her debts, Delany said. As proof, she sent him a photo of a wire transfer, which was illegible. She could have just emailed him the document, he said. In any case, the money never arrived.
Such ruses are typical, said Jeff Danik, a former FBI agent Peevy hired to investigate Jerace. When Klaschus pushed Jerace to refund his money, she sent him a photo of stacks of $100 dollar bills, Danik said.
Kelty said Jerace regularly cited convoluted banking problems to explain why the Barbados business faltered. “This story is so crazy, it has to be real,” he said he initially told himself before he realized he would have to sue her to get his money back.
When Jerace left Barbados, she owed Oliver Jansen, a well-known investor, $31,000 in rent and another $103,500 for a loan that wasn’t repaid, Delany said.
Delany added he and Janson have toyed with the idea of filing a lawsuit. But, Delany said, he suspects it could be a lost cause. “We wanted to make sure what we have was collectible at the end of the day,” he said. “We’re waiting to see how things pan out in Florida.”
Since Jerace has refused to return to West Palm Beach to explain her financial woes to a judge, it is likely her petition for bankruptcy will be dismissed, said court-appointed trustee Robert Furr. Her repeated no-shows prompted U.S. Bankruptcy Judge Paul Hyman to allow the civil cases to proceed.
While Pike is hopeful he can recover money for his clients, Fine said he’s not convinced Jerace has any money left.
Kelty said he held off going to police, hoping Jerace would finally pay up. Fine said he plans to give authorities the bad checks Jerace has written to Kelty in hopes charges will be filed against her.
Jerace’s success, Fine said, is a classic Palm Beach County tale with the added twist of targeting people in recovery.
“South Florida is the only place where appearing to have money is a way to get people to give you money,” he said.