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.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
The price of a new home in China’s largest cities fell for the first time since 2015
New home prices in China’s largest cities fall for first time since 2015
New home prices in China’s largest cities fall for first time since 2015
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Terreno Realty CEO W. Blake Baird and an aerial of the property (Google Maps)
Terreno Realty pays $44M for NJ industrial site
Terreno Realty pays $44M for NJ industrial site
Madison Realty Capital Co-Founders Josh Zegen and Brian Shatz with a rendering of the River North development (Madison Realty Capital, FXCollaborative)
Madison Realty’s altered plans for SI complex approved
Madison Realty’s altered plans for SI complex approved
Pandemic forces mom-and-pop landlord to sell out
Pandemic forces mom-and-pop landlord to sell out
Pandemic forces mom-and-pop landlord to sell out
PBC's Eli Elefant and 452 Fifth Ave (PBC)
Elefant’s PBC to liquidate $2B in US real estate, including HSBC building
Elefant’s PBC to liquidate $2B in US real estate, including HSBC building
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...