Bar Works victims sue JPMorgan for allegedly helping Ponzi scheme

Suit claims bank knew Renwick Haddow’s firm was a scam but did nothing

New York /
Nov.November 06, 2017 05:00 PM

A group of Bar Works victims is suing JPMorgan Chase for $3 million over its role in the alleged Ponzi scheme.

The plaintiffs, a group of 27 Chinese investors, allege that the bank knew Bar Works was a Ponzi scheme but still allowed its mastermind Renwick Haddow to keep an account, which he used to collect millions from his victims.

“(JPMorgan Chase) had everything it needed to unmask and stop the fraud — it had unique information from which it could have reached only one plausible conclusion: Haddow was a thief,” according to the complaint, filed in Manhattan Federal Court Monday.

The bank could not immediately be reached for comment.

Bar Works was a co-working company that operated several locations in New York City and other cities. It also raised money from investors around the globe to fund its expansion, selling desks in its spaces along with any revenues they would make. In January, The Real Deal first reported that Renwick Haddow, a British accused fraudster, was the mastermind behind the company and raised questions over the identity of the supposed CEO, Jonathan Black.

In late June, the Securities and Exchange Commission and the Justice Department unveiled fraud charges against Haddow, accusing him of stealing $37 million from investors and hiding the money in offshore accounts. In July Moroccan authorities arrested him in Tangier.

Meanwhile, investors filed five different civil lawsuits against Haddow in the U.S. to recoup some of their money, which can be difficult if the funds were moved overseas. Going after U.S. firms that did business with Haddow, such as JPMorgan Chase, offers an alternative.

The suit, filed by attorney Michael Kapin, alleges JPMorgan Chase knew the company’s CEO “Jonathan Black” was fictitious, that Bar Works sold more desks than it owned and that Haddow used investors’ money for personal expenses and wired large sums abroad.


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
Democrats' numerous attempts to close the carried-interest loophole have failed
Developers, rejoice: Carried-interest loophole is saved again
Developers, rejoice: Carried-interest loophole is saved again
Stephen Schwarzman, Senator Joe Manchin, and Senate Majority Leader Charles Schumer (Illustration by The Real Deal with Getty Images)
Real estate scores loophole to save loophole
Real estate scores loophole to save loophole
Senator Chuck Schumer and Senator Joe Manchin (Illustration by Kevin Cifuentes for The Real Deal with Getty)
Manchin-Schumer deal closes real estate tax loophole
Manchin-Schumer deal closes real estate tax loophole
15 Hanover Place in Downtown Brooklyn (Lonicera Partners, Getty)
Lonicera scores $134M loan for DoBro tower
Lonicera scores $134M loan for DoBro tower
(Getty)
CMBS volume plunges 29% in second quarter
CMBS volume plunges 29% in second quarter
IPG's Andrew Chung with rendering 23-30 Borden Avenue (Innovo Property Group)
Andrew Chung lands major refi for LIC last-mile project
Andrew Chung lands major refi for LIC last-mile project
arrow_forward_ios

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

Loading...