FBI and IRS at Carabetta Office Building on Center and Pratt Streets - Update 4:38 p.m. Wednesday

The U.S. Attorney General says the action is part of an ongoing federal investigation.

Updated 4:38 p.m.

Federal agents descended on the office of the Carabetta Companies in what appears to be a raid of the company's offices at the corner of Center and Pratt streets in Meriden. 

FBI and IRS agents on scene would not speak to the press. U.S. Attorney General spokesman Thomas Carson said the action was part of an ongoing federal investigation, but wouldn't comment further. IRS special agent Jessica Crocker said her agency was there "in the course of official duties," but said she couldn't reveal any more information. 

Agents have been carrying out what appear to be boxes of files from the company's management offices since at least 10 a.m. Witnesses place federal agents at the scene before 9 a.m.

The Carabetta Management Company is a family-owned private real estate firm dating back to the 1950s and in Meriden. The company maintains 20,000 property units throughout the U.S., according to its website. In Connecticut, it is one of the largest management companies, with properties in Meriden, Middletown, Bristol, Hartford, New Haven, New Britain, New London, Norwich, Vernon, Wallingford, Waterbury and Willimantic.

The firm also has a large presence in Massachusetts, where it has properties in Malden, Revere, Wakefield and Worcester. 

City officials said they were not forewarned about the investigations, and have no information about them other than what they've learned through the press.  

"It's a very large taxpayer," City Manager Lawrence Kendzior said. "We will be watching further developments on this issue."

Carabetta Enterprises is the seventh largest taxpayer in the city. Its assessed property value in 2010 was $15,121,590 according to the city. And that figure doesn't include branch companies and LLC's affiliated with the company. 

This is not Carabetta's first brush with federal investigators – and it has drawn criticism from the U.S. Senate. 

In 2007, U.S. senators Saxby Chambliss (R-Ga.) and Mark Pryor (D-Ark.) censured the company for its stalled work on military base housing projects in their states. 

The company, in partnership with the Shaw Group, a firm out of Louisiana, was given a government contract to build and renovate housing units at Hanscom Air Force Base in Mass., Patrick Air Force Base in Fla, Little Rock Air Force Base in Ark, and Moody in Ga, according to the Army Times.  But the units were reportedly plagued by delays, and the project was taken over by another company.  

In 1995 federal housing officials reached a settlement with Carabetta in connection with allegations that the firm diverted some $8 million from 40 federally insured subsidized housing developments it owns in Massachusetts and Connecticut. Investigators at that time accused the firm of more than 800 violations of its regulations, according to archive reports by the Boston Globe. Under the $12 million settlement Carabetta reached with the government, the firm was allowed to use a tax-exempt federal loan, federal rent subsidies and rent hikes to pay off the penalties, the newspaper reported.

HUD fined the company was $4 million in 1993 in connection with the financial irregularities, the paper wrote. In an earlier report, the newspaper said that the Carabetta diverted the funds to its struggling parent corporation, Carabetta Enterprises Inc., which was in the midst of bankruptcy.

 The company in the 1980s and 1990s went through a federal Chapter 11 bankruptcy, a move that scuttled a long-anticipated multi-million dollar luxury condominium project in Asbury Park, N.J., a project New Jersey and Asbury Park officials had hoped would help revitalize the waterfront area.

However, Carabetta's financial difficulties lead to the company walking away from the project halfway through its construction. After lengthy legal wranglings over it, the development rights were ultimately taken away from Carabetta and given to another management firm.

In a  related move, Carabetta sued Bank of Boston for $560 million, claiming the bank reneged on its promise to loan the Meriden firm some $41 million that would be used on the Asbury Park project and costing the firm more than $500 million in profits.

Carabetta also operates numerous low-income housing projects across the state under federal Housing and Urban Development programs and succesfully sued HUD 2003 for breach of contract when the agency refused to back equity loans on some of the HUD properties Carabetta owns, claiming the company was not in compliance with certain HUD regulations. 

A U.S. Postal Worker who walked in the Management Office to deliver mail at about 11:25 a.m. said that no employees were in the office, and agents were working at office computers. 

At about 9:15 a.m. several people in business casual clothing were outside in the parking lot, standing near their cars. Some were hugging.

Details will come as they are available.

Middletown Patch Editor Cassandra Day assisted with reporting.

janet June 15, 2011 at 08:57 PM
surprise that should be of no surprise. Anyone renting from these idiots needs a mental examination. Please, please God put an end to this corrupt family any way you see fit to do it.
stacia June 15, 2011 at 09:00 PM
I live in one of carabetta's apartments. They come in my apartment any time they feel like it, do 6 "inspections" a yr. We are not aloud to open our Windows in the winter, if we do, even if just once we have to pay 200$ extra for 4 months. I'm a single mom with a special needs child, I can't work full time. My rent went from 540$ a month to 800$ in the last 5 yrs with barely any notice of a rent in crease. After the 1st yr they will not give you a new lease. They keep you on a month to month lease so they can raise your rent whenever they want or kick you out.1 yr they lost 3 of my checks to pay my rent and claim they didn't get them, so they try to charge me a late fee plus court fees. Each time I proved they cashed the check, they never even apologize. Those are just fractions of some of the issues . When I moved here they said it was subsidized apartments. I notice the wages on my recertifications were actually more then what I made, they said it didn't make a difference. So if went by income I should pay a lot less. My child gets ssi "663$" and I gross 300$ a month no sec 8, no state help. I can't even afford or buy anything , so to define them in 2 words "dirty theives". I'm sure they are paying a lot political people, they've gotten away with so much .
janet June 15, 2011 at 11:06 PM
And as far as the employees being out of work probably. Good riddance. The whole office is made up of miserable, non friendly under paid minorities. Oh don't get me started on the maintenance crew.
stacia June 15, 2011 at 11:46 PM
I agree, but I'm sure carabetta will pay their way out of this like always, using government grants and raising rents, so everybody who was screwed over by them are actually paying for their fraudulent actions, if u read the above article you will see they have done it in the past .
JK June 16, 2011 at 12:14 AM
I have had the pleasure of living in a Middletown Carabetta unit for 7 years. They are a lying bunch of scum. They wrongfully quote real estate law, cant fix a damn thing, and freak out when you do one thing wrong and you are a good person. They look the other way for anyone who gets arrested around here. If it wasn't for the nice people at middletown housing authority informing me that since I lived here so long I was eligible for a Carabetta specific section 8 voucher I would be gone. So glad I only pay $473 for the place. Not worth a penny more. I work full time and have 3 kids. I do what I can. I think it is time for Carabetta tenants to organize!
Barbara June 16, 2011 at 01:04 AM
ut, oh.
Barbara June 16, 2011 at 01:12 AM
I lived in one of their apartments for three years. Every comment is so true! They treat the tenants like dirt. They also "misplaced" my rent checks twice and I had to lose time from work to straighten it out and I didn't get an apology. Their repairs are halfassed and you wait forever. Bottom line they are a bunch of greedy $@*!! I hope they get nailed.
janet June 16, 2011 at 01:54 AM
What amazes me is that no one God forbid has gone a rampage ............. yet. If you get my drift. The writing is clearly on the wall.
JK June 16, 2011 at 03:06 AM
@Stacie. Once you have had an investigation of this magnitude it is very difficult if not impossible to ever get a government grant again. Thankfully. No bail out for Carabetta this time I pray. What's that old saying? "you mess with the bull you get the horns". They'll get those horns alright!
Peter Arcoma June 25, 2011 at 04:40 PM
I was let go because I would not comply with their methods of doing business, so they fired me! Bruno
Athena September 09, 2011 at 06:31 PM
ITS ABOUT TIME! The carrabettas are corrupt morally bankrupt people with no regard for business practices or housing laws. I really hope the FBI looks into their residential housing units up in MA.. I worked at one and the amount of illegal activities that took place within the offices would shock and disgust you if you knew.


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