Simon Property Group bilked of $20M in billing scheme, say Florida officials

Simon Property Group was bilked of $20 million in an elaborate racketeering scheme in Florida, say police.

Indianapolis-based Simon, the nation's largest shopping mall operator, didn't detect the scheme for five years, according to the Florida Department of Law Enforcement.

The FDLE announced the arrests Wednesday of six Florida residents in the scheme. Two more people are being sought on warrants.

A former Simon marketing director and vice president, Lynette Lauria, 61, of Clermont, Fla., was among those arrested. She is accused of authorizing payments from Simon to several dummy companies set up as Simon vendors. But the companies didn't perform work for Simon and the money paid for the phony billings went to the suspects, who spent it on lavish vacations, cruises and other personal uses, according to police.

"This criminal enterprise stole more than $20 million from Simon Property Group and remained undetected for more than five years," said FDLE Commissioner Rick Swearingen in a statement.

The scheme ran from May 2006 through June 2011, the department said.

In a statement, Simon spokesman Les Morris said the company didn't lose $20 million.

"This is, in reality, a $4 million fraud initially uncovered by Simon Property Group personnel. We promptly turned over the results of our investigation to the Florida authorities and are pleased to see that Ms. Lauria and her family are being prosecuted for their wrongdoing."

Family members and friends of Lauria were among those arrested. The Orlando Sentinel described some defendants as well-known members of Orlando's social set, including Susan Ortega, 55, associate publisher and editor of TravelHost Magazine Orlando; and Ryan Deming, 39, a multimedia-business owner who was named to the Orlando Business Journal's 40 under 40 movers and shakers in 2013.

All eight defendants were charged with racketeering, conspiracy to commit racketeering and grand theft. Lauria also faces a charge of money laundering.

In 2011, Simon sued Lauria, her husband and others in the scheme. That lawsuit, filed in federal court, was dismissed in September 2014, three months before it was set to come to trial.

The lawsuit alleges Lauria helped funnel more than $3 million in fraudulent payments from Simon for event planning, image marketing and other work.

Simon's lawsuit said Lauria admitted to self-dealing but denied other wrongdoing. The lawsuit said Lauria was hired as marketing director of Simon's Florida Mall in Orlando in 2000 and was promoted to vice president of mall marketing for Florida and Puerto Rico in 2007.

The lawsuit said Simon was alerted to the fraud in June 2011 through an email from an employee of a company that allegedly did phony billing of Simon.

Simon fired Lauria in August 2011, according to the lawsuit.

The day after the firing, Lauria threw her personal laptop computer in a river, according to the lawsuit. It also alleges she bought the website domain name simonpropertyinc.com and used it to pretend to be a Simon auditor to question the person who tipped Simon off to the scheme.

Call Star reporter Jeff Swiatek at (317)444-6483. Follow him on Twitter: @JeffSwiatek.