Las Vegas Sun

March 28, 2024

Bankrupt developer hit with another lawsuit alleging fraud

Eljwaidi

Jean Marc Eljwaidi, right, appears in court with attorney Steven Wolfson at the Regional Justice Center in Las Vegas on Jan. 21, 2010.

Bankrupt Las Vegas development executive Jean Marc El Jwaidi faces another lawsuit alleging he failed to pay back and defrauded a lender.

El Jwaidi for years raised millions of dollars from investors for a planned mixed-use center called PG Plaza at Russell Road and the Las Vegas Beltway.

PG Plaza was never built.

El Jwaidi's development company Babuski LLC and El Jwaidi personally both ended up in Chapter 7 bankruptcy liquidation and El Jwaidi was arrested in 2009 on suspicion of bilking a vulnerable Las Vegas senior citizen out of $400,000 in investment funds as part of what state Securities Enforcement Division investigators called a Ponzi scheme.

The latest among many lawsuits involving El Jwaidi was filed March 2 in Clark County District Court against El Jwaidi, Babuski and related company JKG Property Management & Development LLC.

Because El Jwaidi's bankruptcy case is active, it's likely the lawsuit will be re-filed as an adversary proceeding in the bankruptcy case.

Plaintiff Manouchehr Dezfooli charges in the complaint that in April 2005 he loaned El Jwaidi about $766,000, with El Jwaidi agreeing to repay the funds after just three months.

The suit says that in March 2007, with the loan unpaid, El Jwaidi delivered to Dezfooli two deeds of trust as security for the unpaid loan. Later in 2007 and in 2008, El Jwaidi paid Dezfooli a total of $100,000 as part of a forbearance agreement, the complaint says.

At that time, different versions of the forbearance agreement said the amount due was either $700,000 or $1.1 million after applying the $100,000 payment, the lawsuit says.

"No additional funds have ever been paid by El Jwaidi or received by Dezfooli," charges the lawsuit, which asserts allegations including fraud, civil conspiracy to commit fraud and breach of contract.

"At the time at which El Jwaidi executed the note, he had no intention to repay the full amount thereof, whether with or without interest," the fraud count alleges.

JKG and Babuski participated in the alleged conspiracy by sending correspondence to Dezfooli "intended to confuse, deceive and obscure the truth from the plaintiff and to repeatedly string him along with empty promises of future repayment," the suit charges.

El Jwaidi's bankruptcy attorney, Matthew Johnson, said Thursday that El Jwaidi denies he owes Dezfooli anything.

"He's working very hard to make sure people legitimately owed money are paid as much as possible through the bankruptcy estate," Johnson said.

Separately in the bankruptcy case, Judge Linda Riegle on Feb. 10 approved settlement of an adversary complaint filed by investor Rito Favela Jr. against El Jwaidi.

That was settled when an unidentified benefactor agreed to provide $400,000 for the settlement -- money available only to Favela, not all creditors.

That's the same way El Jwaidi gained "conditional dismissal" of the criminal charges against him of six counts of elder exploitation. In the criminal case, Paris limousine company owner Tony Skayem provided $338,306 in restitution to two of the victims. Again, the money was available only for those victims, not creditors generally in the bankruptcy case.

In the Favela case, Riegle wrote in her order approving the settlement: "The court is not making a finding of facts as to whether or not the funds are the property of the estate and that the trustee reserves the right to investigate the source of the funds."

Also in the bankruptcy case, creditor HSBC Bank has been seeking bankruptcy court approval to foreclose on one of El Jwaidi's homes, described as a Summerlin-area property that El Jwaidi has valued at $3.4 million. A hearing is set for next month on that issue.

In yet another proceeding in the bankruptcy case, trustee William Leonard is suing El Jwaidi, claiming the businessman has failed to disclose required financial information.

Johnson filed a response denying those allegations and the case is headed toward a September trial.

El Jwaidi, in his personal bankruptcy, listed assets of $6.273 million against liabilities of $31.2 million.

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