Dredger accuses port figure: A private contractor says the Jaxport board member threatened his business
Published by Florida Times-Union on July 6, 2008.
A businessman trying to establish a foothold for his dredging company in Jacksonville said Tony Nelson told him he could find the company work -- as long as the owner agreed to sell Nelson 70 percent of his company for $570.
Darwin Peguese, owner of Island Breeze Marine, declined the offer from the Jacksonville Port Authority board member and decided to give up on Jacksonville, turning his attention to jobs outside the United States.
The frustration lingers, though.
"I was devastated by the whole ordeal, " said Peguese, who has been in the maritime business for about 25 years. "I never had it happen to me before.
"I was always told that blacks look out for blacks, " said Peguese, who, like Nelson, is African-American. "That's what I thought most of my adult life. That doesn't fly anymore."
According to contracts sent to Peguese by a lawyer representing Nelson in December 2006, Nelson wanted an option to buy 70 percent of Island Breeze, as well as set up a joint venture with the company that would preclude it from doing any work on its own.
Peguese provided the contracts to the Times-Union and said he had conversations about them with the U.S. Attorney's Office and the FBI.
For Peguese, the treatment he said he got from Nelson marked the end of a dream, the dashing of the first concrete hopes he had to make a showing in the industry.
"When I turned him down the first time, he [Nelson] told me I was through, I wasn't getting work with the [U.S. Army] Corps of Engineers, with the city, with the port, with anybody, " Peguese said. "I did consider it, but at the end, my family meant more to me than money."
A letter sent to Peguese's lawyer from the U.S. Attorney's Office says "it appears that [Peguese] is the victim of extortion."
The U.S. Attorney's Office said it wouldn't comment on the letter because it was related to an ongoing investigation. The FBI also doesn't comment on ongoing investigations.
Nelson didn't respond to several requests for comments left with his attorney, his spokeswoman and at his office over several days.
Peguese said he met Nelson in November 2006, introduced by Lance Young, then the owner of Subaqueous Services Inc. Subaqueous, which has several contracts with the Jacksonville Port Authority, had its offices raided by the FBI this year as part of an investigation into Nelson and contracts at the port.
Young had hired Island Breeze to help out on a $1.9 million dredging contract in Apalachicola for the Florida Fish and Wildlife Commission after Young and Peguese were introduced by mutual industry contacts.
Peguese said he was visiting his family in Maryland in November when Young invited him to a meeting with state officials concerning minority contracting. Also at the meeting, Peguese said, was Nelson, who works with Jacksonville-area minority contractors in his role as president of the First Coast Black Business Investment Corp.
In the truck on the way back to the airport, Peguese said, Nelson turned to him and said, "You and I are going to be doing business together, " adding that he had contacts with the U.S. Army Corps of Engineers, the city of Jacksonville and the Jacksonville Port Authority that could lead to guaranteed jobs. Companies associated with Nelson have bid on jobs or done work, either as contractors or sub-contractors, for all of those agencies.
Later that month, Peguese said, Nelson invited him to his home, where the two discussed Nelson's relationship with Subaqueous and the type of work Peguese wanted. The conversation ended with Nelson saying he would e-mail Peguese some documents.
The documents, which Peguese said he received early in November, turned out to be an option to buy 51 percent of Island Breeze, an offer Peguese ignored.
About three weeks later, on the day before Thanksgiving 2006, Peguese said Young approached him about his lack of response to the offer and about the more than $100,000 Subaqueous owed Island Breeze for the Apalachicola work.
"He said, 'I don't have money to pay you for this job. We'll make it up on the next one. But you need to make it right with Tony, ' " Peguese said.
The Subaqueous owner then asked Peguese to sign a document that terminated the subcontract, which, together with the withholding of payment, Peguese said he saw as retaliation for not dealing with Nelson. The Fish and Wildlife Commission has said it was happy with the work done on the project.
Peguese said he refused to sign the document and walked away.
Young couldn't be reached by the Times-Union for comment. Subaqueous didn't return calls.
With no work in sight, Peguese decided to call Nelson and ask him to rescind his offer to buy the company, hoping to perhaps find another way to work together. The dredger recounted the ensuing conversation in several interviews, his anger rising each time:
"He said, 'I'll pray about it and call you back tomorrow morning.' He had to pray about it, " Peguese said.
When Nelson next contacted Peguese, he wanted a bigger chunk of the company.
This time, Peguese received a joint venture agreement and an option that would let Nelson buy 70 percent of Island Breeze.
Under the agreement, Nelson would pay Peguese $500 for an option under which Nelson could buy 70 percent of the company for $70 within 10 years.
Peguese said he isn't sure what size price tag to place on his seven-employee start-up company; while managing dredging projects, though, he said he charges $100 an hour.
At the same time, Island Breeze would enter into a joint venture with Ja-Ash Enterprises, a company formed in 1996 with Tony's wife, Janice Nelson, as president.
As part of the joint venture, Peguese would need Ja-Ash's permission to do almost anything. The joint venture would be headquartered in the Myrtle Avenue building housing several of Nelson's companies. Island Breeze would need to use the same bank as Ja-Ash, would need to keep its books at Ja-Ash's office and would need Ja-Ash's approval to take on jobs.
Meanwhile, Island Breeze wouldn't be allowed to take on any "project, contract or activity of any kind whatsoever" outside the joint venture.
"Island Breeze Marine is essentially giving control to Tony Nelson and Ja-Ash, " Jeff McFarland, an associate professor of law at Florida Coastal School of Law who focuses on business law, said of the terms of the agreement.
"There's some very one-sided provisions, " said McFarland, who reviewed the contract at the request of the Times-Union.
Peguese even could have found his part of the joint venture being eaten away: Under the terms of the contract, McFarland said, if Ja-Ash decided that both partners needed to put more money in the deal and Island Breeze was unable to match Ja-Ash's infusion, Peguese's share of profits would drop, although the level of liability he would face would stay the same.
Heather Nason, the lawyer who sent the contracts to Peguese, has since left Brennan, Manna & Diamond, a firm that continues to represent Nelson. When contacted Tuesday, Nason said she had no comment.
Michael Freed, managing partner of the firm, said Thursday he would contact Nelson about the matter. Freed said Friday he was unable to get in touch with Nelson, who he said may have been traveling during the holiday weekend.
Nelson's spokeswoman, Maria Coppola, was contacted throughout the week and said Thursday that a statement may be forthcoming. But Coppola said Saturday that Nelson declined to comment.
Peguese said he left the area after that last conversation with Nelson, halting plans to move his family to Jacksonville. Last year, he signed on to work a dredging job for Manson Construction in the Bahamas.
But he said getting back on his feet has been tough.
"I still have never really recovered from the Lance/Tony ordeal. It's still tough, " he said.
His anger intensified when he saw dredging work he would have bid on going to other firms, including a contract with the city to dredge Goodbys Creek. Subaqueous bid for and won that job last year, with Muirfield Partners -- a company owned by Nelson -- serving as a subcontractor.
Peguese has started talking to the port again in recent days, only now it's through his attorney, Reginald McKamie of Houston.
"There's a whole lot of conflicts of interest there, " McKamie said. "[Nelson's] promise to Darwin was, 'Look, I'll get the contract, you just sign this paper. I'll give you some crumbs, but I'll be in the background owning your company.'
"It's not like it was some lowly Port Authority person doing this, " McKamie said. "This was the chairman."
Among the possible issues Peguese could bring up in a lawsuit, McKamie said, are violations of his civil rights.
The city's deputy general counsel, Cindy Laquidara, said the port and the city have no liability. "There may well be liability for others, but the port just isn't the right party, " she said. "[Peguese has] alleged criminal activity. There's no liability for a third party if someone else engages in criminal activity."
Although Peguese had in recent days been ambivalent about suing, he said Thursday he planned on moving ahead with a lawsuit against the Port Authority, the city, the U.S. Army Corps of Engineers and Nelson -- even though he's not entirely sure how they can fix the situation.
"I've basically been put out of business. Even if the port gave me work at this point, I don't have the capital to do work, " he said. "I'm just looking for a fair opportunity."