A fallout between Canero Group’s principals and a high-profile partner has sparked allegations of fraud and mismanagement involving six projects in Miami and Homestead.
Justin Rundle, a real estate investor and son of Miami-Dade State Attorney Katherine Fernandez Rundle, alleges Jose Canero Sr. and Jose Canero Jr. duped him and other investors into funding development of the projects, which are either behind schedule or no longer happening.
Canero Group is a Miami-based firm that focuses on development of luxury homes and townhouses. Recently, Canero Group bought out the owners of Chateau Grove, a 25-unit condominium in Coconut Grove that the company plans on converting into a rental building.
In a lawsuit filed May 27 in Miami-Dade County, Rundle accuses the Caneros of engaging in a “fraudulent scheme” in which they allegedly used project funds to pay their company’s expenses without authorization from Rundle and other investors, while also unnecessarily delaying the projects.
Rundle contributed roughly $625,000 in early 2023. He also recruited half a dozen other investors who allegedly provided a combined $6.3 million for the projects, the complaint states. The other investors are not part of the lawsuit. Rundle is seeking damages in excess of $3 million, citing not only the lost investment but also reputational harm.
“[The Caneros] lied to me about their past experience, their abilities and their true intentions,” Rundle told The Real Deal. “To date, each of the projects are behind schedule, over budget and not one dollar has been returned to the investors, including me.”
In an emailed statement, Jose Canero Jr. said Rundle’s allegations are “entirely without merit and inconsistent with our longstanding reputation.”
“We were blindsided by the lawsuit and are deeply confused by both the timing and nature of the allegations,” Canero said. “We remain confident that the facts will speak for themselves and that the truth will ultimately prevail.”
The partnership sours
According to the complaint, Rundle had known the Caneros for several years, and viewed the father-and-son duo as close family friends. In 2022, Rundle alleges Canero Jr. pitched him on two land deals. The first involved a site in Homestead where Canero Group is planning a 54-unit townhouse project, and the second involved a property in Princeton, an unincorporated Miami-Dade neighborhood, where the Caneros are planning a 247-unit apartment complex.
Rundle said he invested $250,000 in each land deal after Canero Jr. allegedly promised Rundle he would double his money on each project, according to the complaint. A year later, the partnership expanded, as Rundle helped the Caneros raise more capital for four other projects in Homestead, Coconut Grove and Miami’s Upper Eastside neighborhood.
In addition to another $125,000 Rundle invested, he also used his own money to develop a website for the projects, hire a professional marketing expert and create content and branding on social media, the lawsuit states. Rundle, a personal injury attorney, closed his practice and moved into an office at Canero headquarters, according to the suit.
By the middle of last year, the partnership started to go south. The Caneros allegedly engaged in a calculated pattern of misrepresentations, using Rundle’s capital to fund unrelated expenses and personal luxuries, the lawsuit asserts.
“I trusted them with my money and my name,” Rundle told TRD. “Instead, they treated my investment as their personal piggy bank.”
In his complaint, Rundle alleges the Caneros repeatedly violated operating agreements governing the individual projects by diverting project funds for their own benefit, leaving the projects undercapitalized.
In reality, the lawsuit claims, little to no substantive progress was made, and in some cases, the projects stalled entirely. Rundle alleges the Caneros kicked him out of their office when he started to raise alarms about their spending and the project delays.
In his emailed statement, Canero Jr. denied any wrongdoing, insisting that Rundle had access to all the projects’ records: “What is most surprising — and deeply disappointing — is that this lawsuit comes from someone who previously served as our attorney, who drafted the very agreements now at issue, and who appears to be using that position of trust to advance his own financial interests.”
Emails show extent of the fallout
An anonymous source who knows the other investors provided TRD with more than a dozen emails sent among Rundle, Canero Jr. and other project funders that provide details on how the partnership collapsed. The emails focused on one of the projects, the development of a modern waterfront home at 900 Belle Meade Island Drive in Miami.
In one email sent Dec. 2, Rundle wrote that the Caneros were refusing to meet with him, and that Canero Sr. had allegedly threatened and cursed him. Rundle also accused the Caneros of causing unnecessary delays and increasing the Belle Meade project’s costs by firing the architect. He wrote that Canero Jr. was “unilaterally writing checks to his outside business and the Caneros refused to stop.”
“The Caneros are playing a dangerous game with your money,” Rundle wrote. “It’s unclear whether you all have a grasp on the reality of the situation.”
Seven days later, Canero Jr. responded, accusing Rundle of misrepresenting facts to mislead the other investors. His father did not want to meet with Rundle because “he does not wish to engage with you further due to your repeated defamation and false accusations,” Canero Jr. wrote. He also informed the other investors that Rundle’s emails were unproductive, harmful and creating unnecessary turmoil.
In February, the Canero-managed entity that owned the Belle Meade property sold it for $4.3 million, roughly $800,000 above its 2024 purchase price. However, spreadsheets provided to TRD by the anonymous source show that after paying all expenses, only $1.4 million remained to divide among Rundle and five other investors, all of whom lost money on the deal.
The anonymous source and Rundle also allege the Caneros have not issued any disbursements from the sale. Canero Jr. declined comment about the lack of payment. The investors believe Rundle and the Caneros both share blame over the failed Belle Meade project, the anonymous source said.
“What’s most troubling is that these individuals leveraged their last names and perceived credibility to attract investors,” the source said. “Now, they are damaging the very reputations and family legacies they relied on.”
Rundle acknowledged that investors he brought in are upset. “No one is happy about the situation,” he said. “What I really want is justice for the other investors and myself.”
