Megos has history of complaints, disciplinary action

Tim Cook/The Day Zane Megos exits his attorney's office in New London Tuesday.

Norwich - Norwich Arts Center Co-President Karen Beasley was organizing a fundraiser April 19 to help pay the center's monthly mortgage when an event planner called to say he was going to post a coming event on the building's billboard.

"Should I bring a 'for sale' sign, too?" the man joked.

Beasley's only response was "Huh?"

Unbeknownst to the Norwich Arts Center board of directors or members, the center's building at 60-64 Broadway was advertised for sale on Showcase.com for $299,000.

The "For Sale Contacts" were listed as Meyers & Bailey Investment Co., Zane Megos, with a phone number that appears on signs on several downtown buildings. "Seller financing available," the ad stated.

Board member Jackie Roy contacted Showcase.com and demanded the posting be removed. Beasley said she plans to file a complaint with the state Department of Consumer Protection.

"How can we have a gala to raise money to help pay my mortgage when you see that my building is for sale?" Beasley said.

Megos, interviewed Tuesday at the New London office of his attorney, Harry Traystman, said he was just as surprised as arts center officials to see a printout of the posting he said he had never seen before.

Megos said he works through the online research firm Costar to post ads on Showcase.com, and the company must have mistaken the arts center building for the building Megos meant to post, across the street at 59-61 Broadway, which is owned by his business partner, Bishop Taylor. The Showcase posting included four photos of the arts center building and its correct construction date, 1891.

A call to the Costar Connecticut division was not returned.

Beasley's complaint to the state Department of Consumer Protection is not the first time that Mego, who has been active in real estate in the greater Norwich area since 1983, has been reported to a state agency.

The state Department of Consumer Protection has a lengthy file on past complaints and disciplinary action, including escrow deposit mishandling, commingling of escrow funds and alleged fraudulent dealings.

The file was started when Megos pleaded guilty to one count of fraud in 1983. He opened Chelsea Realty in 1987, five months before applying for a broker's license.

Megos signed a stipulated agreement Aug. 4, 1988, with the Connecticut Real Estate Commission that revoked his license in the wake of allegations that he failed to properly deposit money into escrow accounts and failed to maintain funds received from prospective buyers in separate accounts.

The agreement said Megos could not apply for a salesperson's or broker's license for a year, and that the state would not seek criminal prosecution.

The state Real Estate Commission denied a broker's license application Nov. 7, 1989. Megos requested to be reinstated in 1990, but in 1991 the state sent him a letter noting an advertisement he had placed in Showcase of Homes magazine and saying he was "possibly engaging in (real estate) business without a license." An attorney responded, noting Megos' ownership or co-ownership with Dade Realty of seven properties.

His real estate sales license was reinstated in 1992 under sponsorship of Edith Baum of Dade Realty Co., who had agreed that Megos would not have check-writing authority and all deposits would be made payable to the company.

In 2005, Baum withdrew her sponsorship of Megos amid new allegations of fraud. Baum signed a cease-and-desist agreement and paid a $1,000 civil penalty to the Department of Consumer Protection.

In the fraud complaint, Michael Barbarosa of Guilford and Matt Cardinal of Lebanon said they had been working separately with Megos in 2004 and 2005 on plans to purchase properties in Norwich. As Cardinal's two proposed purchases for buildings at 9-11 Grove St. and 202-204 Franklin St., both owned by Barbarosa, dragged on, Cardinal told a state investigator that he became suspicious and contacted Barbarosa.

Barbarosa claimed that Megos had forged his name on two sales contracts and related documents. Barbarosa said he had a written listing agreement with Megos for the Franklin Street property, but that the Grove Street property was not even for sale, and he was unaware of Cardinal's deposits.

Barbarosa said he and Cardinal confronted Megos with the documents and he readily agreed to return Cardinal's deposits and deposits Barbarosa had made for two other Norwich buildings.

"He returned my money in the form of a cashier's check and asked me to sign an unconditional release, which I refused. He asked us not to share this information with anyone as it would get him in a lot of trouble," Cardinal wrote in his statement to the Consumer Protection trade practices investigator. "During the next week we called the Real Estate Commission and met with the Norwich Police Department to file complaints."

In his statements to the investigators and to police, Megos denied forging the signatures and said the accusations were a result of Cardinal's anger that deals were not progressing quickly enough. Megos said he paid both men back, with interest and "an additional fee above interest for apparently no reason" that he said Barbarosa demanded.

The police report included in the state file stated that the investigation was "suspended pending further leads."

Megos surrendered his license voluntarily, except that he told authorities he could not find the physical license.

In an interview Tuesday at the New London office of his attorney, Harry Traystman, Megos said he does not need a real estate license for his activities, because "I'm an investor."

Claudette Carveth, spokeswoman for the state consumer protection department, said an individual must be a real estate agent to offer and enter into contracts with tenants for properties he or she does not own. An owner, however, does not need to be a real estate agent to sell or rent.

Megos never sought to have his license reinstated, and his business partner in Meyers & Bailey Investment Co., Bishop Taylor, listed as vice president, has no Connecticut real estate records, Carveth said.

Business relationship ends

Filings in Small Claims Court indicate that Megos has been representing properties that he does not own.

FC Stony Point LLC of New York purchased 77 Blackhall St., New London, in 2010. Megos said he had an agreement with the company, which also does business as the Garth Organization, to find either buyers or renters. But in a recent interview, Kenneth Friedland of the Garth Organization said the firm was working with Megos only to help find buyers for the property.

Marjorie Leonard of Norwich said she paid Megos $1,350 on May 7, 2010, and another $2,700 on May 10 to secure rental of the house. Leonard said she has not been paid a Small Claims Court judgment totaling $4,625 awarded on June 28, 2011.

Friedland said the Garth Organization has broken off its business relationship with Megos. He said the company has not taken money from potential tenants, and the house remains on the market for a buyer.

"I assure you, this is not us," he said.

c.bessette@theday.com

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