Bankrupt businessman Ezri Namvar is being sued by an entity controlled by prominent developer Richard Weintraub, who previously had not been linked to Namvar or any of the businessman's legal troubles.
The lawsuit, filed June 17 in Los Angeles Superior Court, alleges that Namvar and others engineered a kickback scheme in the planned sale of a property Weintraub and Namvar owned in a joint venture. Plans called for the Malibu land to be developed into a luxury hotel, but it was put up for sale because of $21.5 million in mortgage debt.
The suit is noteworthy because it details the business relationship of Weintraub, who heads Malibu real estate company Weintraub Financial Services Inc., and Namvar, who is being investigated by federal authorities and has been accused by some creditors of running a Ponzi scheme once his real estate investment business soured.
The suit alleges a scheme in which the prospective property buyer, PFS Holdings LLC of Los Angeles, would enter into an agreement to buy the property for $32 million and then assign it to another unnamed buyer who would pay a secret kickback to Namvar and others. The lawsuit contends that the complicated scheme would have left Weintraub without any proceeds from the sale.
The suit was brought by REB Malibu LLC, Weintraub's entity in the Rancho Malibu LLC joint venture. Named in the lawsuit are the joint venture, Namvar, a third partner in the joint venture called Manhattan Partners LLC, PFS Holdings and three other individuals.
Of course, the actions described in the complaint are allegations that remain unproven. Legal responses to the lawsuit are due later this month.
Kasey Diba, attorney for PFS, said the allegations are "unmerited" and the lawsuit is a result of what appears to be "internal dissension" among the members of Rancho Malibu. Diba said PFS made the offer to purchase the property in good faith and his client's only involvement was "an offer to purchase the property in dispute." He declined to comment further.
Attorneys for Namvar could not be reached for comment. Weintraub and his attorney, Gregory Gershuni, declined to comment.
According to the suit, Namvar, through Dimes LLC, his entity in the joint venture, became involved in 2006 with Weintraub in Rancho Malibu. Their collaboration was to be an ambitious hotel project in development-averse Malibu. According to California Coastal Commission documents, Rancho Malibu planned to build the hotel at 24111 Pacific Coast Highway near Pepperdine University.
Weintraub Financial Services' Web site depicts the development, called Rancho Malibu Resort, as a "Spanish Mediterranean"-style hotel with a spa, restaurant and stores.
The lawsuit does not spell out how Weintraub and Namvar began their business relationship.
Weintraub started buying properties in the early 1990s and mostly stayed under the radar until 2007, when his purchase of the iconic Sportsmen's Lodge Hotel in Studio City for about $50 million upped his profile. This spring, Weintraub opened the Malibu Lumber Yard, an upscale shopping center he co-developed. It is the first retail center to open in Malibu in two decades.
Namvar, an Iranian immigrant, is mainly known as an investor who largely gathered money from the Persian Jewish community in and around Beverly Hills, using the money to make real estate purchases. Namvar's business collapsed in the last half of 2008 during the real estate downturn.
Namvar's main company, bankrupt Namco Capital Group Inc., owes more than a half-billion dollars to 464 creditors. Namvar, who had a local real estate empire valued at $2.43 billion last summer, also apparently owes a large amount personally.
The lawsuit alleges that the kickback scheme would have diverted money from Dimes, which is now bankrupt and owes $4.23 million in unsecured loans to Namco. Any money diverted from Dimes could lessen the total that Namco's creditors can receive.
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