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Tuesday, May 17, 2022

Law Suit Dredges Up Spotted Past of Real Estate Mogul, Church Founder

Law Suit Dredges Up Spotted Past of Real Estate Mogul, Church Founder

By DANNY KING

Staff Reporter

People change.

So says C. Frederick Wehba, founder of the In Christ Church in Beverly Hills, this year’s winner of the annual humanitarian award from the L.A. branch of the Muscular Dystrophy Association and a co-founder of real estate investor BentleyForbes LLC.

Lauded for his charitable work, the 56-year-old Wehba has pulled back from real estate activity, leaving day-to-day operations to his three sons.

His retreat from business coincides with the increased demands of the church and comes as BentleyForbes emerges as one of the largest office landlords in the San Fernando Valley with two major acquisitions in as many years.

It also coincides with a legal battle over terms of the firm’s 2001 deal for 21st Century Plaza in Warner Center, embroiling the Wehbas and exposing the senior Wehba’s checkered financial history, including a guilty plea to federal fraud charges and a judgment for nonpayment of services.

A partner in that deal, Mark K. Lewis, is suing Wehba and two of his sons Frederick II and Chad, BentleyForbes’ president and chief operating officer, respectively along with a handful of limited liability companies controlled by second-generation family members.

The suit alleges that the Wehba family discounted Lewis’ interests by inflating its own, underpaying him his share of the building’s cash flow as a result. It is scheduled for trial in L.A. Superior Court in June.

Wehba confirmed the 1995 plea deal, which court papers said stemmed from the fraudulent concealment of his interest in his Beverly Hills home while owing $2.5 million to failed Texas thrift Vernon Savings & Loan. But Wehba, who signed the plea arrangement with the U.S. Attorney’s Office for the Northern District of Texas, now disputes the allegations.

“That charge was never proven to be true,” said Wehba. “However, I did plea because I wanted to get on with my life the federal government wins 80 percent of all cases that was told to me.”

There also was a $1.1 million judgment against Wehba by PaineWebber Inc. for an unpaid transaction fee in 1992. When Wehba subsequently declared bankruptcy, the U.S. Bankruptcy Court for the Eastern District of Texas ruled Webha’s debt to PaineWebber nondischargeable, according to court papers. In that case, Judge Houston Abel also made reference to 1978 and 1980 credit fraud and theft of services indictments.

(Asked about those indictments, Wehba replied, “I’m not familiar with any of that.”)

“The claims (Lewis) is making in the lawsuit are so weak that he has to lead with personal attacks on Fred Sr.,” said Gregory Bordo, an attorney representing the Wehbas. “Because his contract with BentleyForbes was discontinued and because he had greater expectations for cash flow, he struck out in this fashion This guy has been treated unbelievably generously.”

Timing issue

Wehba was involved in a number of real estate ventures in Dallas in the 1980s before moving his family to Los Angeles in 1989. Four years later, he founded BentleyForbes with his eldest son, Frederick II, who had worked at what was then Shearson Lehman Bros.

Since then, the company has purchased about $1 billion in real estate nationwide. It is preparing to close on the $115 million purchase of 450,000 square feet in the first two phases of LNR Warner Center in Woodland Hills, and in addition to the 518,000-square-foot 21st Century Plaza owns the 69,000-square-foot Isuzu Motors building in Cerritos and a Yaohan Plaza Superstore in Torrance.

Until the 21st Century Plaza purchase, the company specialized in sale-leaseback purchases, where the Wehbas would structure deals allowing an owner-user company to sell its property to BentleyForbes while taking on a long-term lease.

These days, according to Frederick II, his father spends about half his time in an advisory role with the company and half his time with the church. (Frederick II has three brothers, ranging from 21 to 28, who have positions with the company.)

In Christ Church, which became affiliated with First Baptist Church Atlanta last year, holds Sunday services at Beverly Hills High School’s auditorium, according to Larry Lamb, its pastor. Wehba and his wife have Tuesday evening bible study at his home for the congregation, which has grown to nearly 200 from about a dozen people last March.

“I have received God’s grace through this period it does a great thing to someone, spiritually,” said Wehba, who said he paid off his debts of the past decade.

Wehba claims to have supported more than 40 charities and to have spearheaded a program to provide clothing for 2,800 children in the Mississippi Delta.

On April 26, the local chapter of the Muscular Dystrophy Association will honor Wehba and his wife with its annual humanitarian award at the Beverly Hilton.

“We only honor very respectable and deserving people,” said Timmi Masters, event chair and a member of the national board of directors of the MDA, who said she was a friend of the Wehbas.

“He’s a very generous man,” said Lamb, who joined the church last May and said he was unaware of Wehba’s past. “Here’s a couple that doesn’t have to do this but they help set up (services) every Sunday morning. They’re not just throwing dollars at something.”

Frederick II said his dad’s past hasn’t been a large issue with BentleyForbes’ financial partners either.

“Since I have the same name, it’s going to come up,” he said. “But I’ve never been turned down for a loan and it has never been an issue that has hurt me doing business.”

Wehba’s past and BentleyForbes’ legal issues apparently have not been a factor in the relationship with Frankfurt-based financial institution Helaba, which according to court papers in the Lewis case provided $97 million in debt financing for the 21st Century Plaza purchase.

Though Helaba’s original contact with BentleyForbes was with Lewis, who is no longer with the firm, the bank is on good terms with the company, according to Chris Godlewski, vice president at Helaba’s New York office.

“We’ve had a satisfactory relationship,” said Godlewski.

Tom Bohlinger, the senior vice president at CB Richard Ellis who brokered the deal between BentleyForbes and LNR seller Lennar Partners, downplayed the senior Wehba’s role in both the transaction and the company.

“We investigated (Wehba’s) integrity even though his role is tangential to the transaction, and we have just not found any incidents in recent years where he has negotiated in bad faith,” said Bohlinger. “There are a number of buyers in the marketplace that don’t stick to their word, but (BentleyForbes) have not been dishonest in any dealings we were able to find.”

But Benjamin Reznik, who represents Lewis in the 21st Century suit, claims otherwise.

“The lawsuit is about getting percentage interest into that partnership and getting cash flow out of it,” he said. “When we became involved, we came across this long history of criminal conduct, which was a shock to our client, to say the least.”

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