71 Chinese investors sue Bar Works and its execs over alleged Ponzi scheme

Complaint alleges a combined $7.5M in losses

New York /
Jul.July 18, 2017 04:26 PM

A group of 71 Chinese investors is suing the co-working scheme Bar Works and its alleged masterminds Renwick Haddow and Zoya Kiselova in federal court, alleging that they stole $7.495 million in a Ponzi scheme.

The suit comes three weeks after the Securities and Exchange Commission and the U.S. Attorney’s office unveiled criminal charges against Haddow, who could face up to 40 years in prison if he is caught.

Other investors had filed two lawsuits against Bar Works last month. The latest also names Kiselova, Haddow’s wife, as a defendant. She was named as a defendant in only one of the two previous suits. Kiselova “was actively involved in the formation of the various Bar Works entities and assisted Haddow to control the Bar Works entities,” the complaint, filed by Magtone Law in the Southern District of New York, alleges. “She has been a director and operations executive of Bar Works entities who participated in the day-to-day operations of the Bar Works entities.”

The Real Deal first exposed Haddow’s involvement in Bar Works in January and revealed that he had installed Kiselova as a company executive under an assumed name, Zoe Miller.

Bar Works raised money by claiming to sell desks in its co-working spaces to investors around the world and guaranteeing double-digit returns. In reality, they sold more desks than physically existed and payments to investors started drying up around March, according to the complaint. Prosecutors claim the scheme raised more than $36 million, much of it ending up in mysterious bank accounts overseas.

According to the latest complaint, one of the Chinese investors bought four Bar Works units for $120,000 in August 2016, 13 desks for $390,000 in September and another 18 desks for $450,000 in late October.

A representative for Bar Works did not immediately respond to a request for comment.

Last week, TRD published a detailed investigation into Bar Works and the rise of online real estate investment fraud.


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