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

Complaint alleges a combined $7.5M in losses

TRD 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
20 West 33rd Street (20West33rd)

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project

Furnishing firm picks up 4 condos at 60 Guilders, Carlyle’s Midtown South project
Bank OZK CEO George Gleason (Unsplash; Bank OZK)

Bank OZK’s lending up in third quarter

Bank OZK’s lending up in third quarter
Gap CEO Sonia Syngal (Getty)

Gap Inc. will close 350 stores and exit malls entirely

Gap Inc. will close 350 stores and exit malls entirely
Steve Cohen and Citi Field (Getty)

Citi Field lease clause could stymie billionaire’s quest for the Mets

Citi Field lease clause could stymie billionaire’s quest for the Mets
Consumers are using streaming services more than ever, and data center real estate is booming (iStock)

Real estate for data centers is having a moment

Real estate for data centers is having a moment
Paul Manafort and Manhattan district attorney Cyrus Vance, Jr. (Getty)

Manafort mortgage-fraud case dismissed, again

Manafort mortgage-fraud case dismissed, again
arrow_forward_ios

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

Loading...