Walls are closing in on Chikoo Patel.
The multifamily property manager and investor who assembled control of dozens of South Side apartment buildings through his firm CKO Real Estate is facing a lawsuit alleging he bilked his ex-partners out of more than $10.8 million through fraud, theft and mismanagement.
The lawsuit was filed Thursday by investor Shai Wolkowicki and his wife Lauren Lampert, who first partnered with Patel’s Chicago-based firm CKO Real Estate in 2020. But they split up early this year, when they confronted Patel after discovering his alleged misdeeds and removed him from operating the properties, Wolkowicki and other investors said.
Over the years, Lampert and Wolkowicki invested in more than 50 real estate projects with Patel. In addition to the trio’s Chicago holdings, they also jointly owned rental properties throughout Illinois, including in Rockford, and Springfield, where Patel and Wolkowicki are facing a $16 million foreclosure lawsuit from Old National Bank for the apartment complex at 1833 Seven Pines Road.
The distress is derived in part from Patel allegedly violating operating agreements he had with the couple, who hired CKO to manage their portfolio of at least 37 business entities invested in the ownership of apartments. The couple classified themselves as “passive investors,” but they said they had to take on an active role earlier this year when they fired CKO upon discovering that Patel had been improperly siphoning millions of dollars out of the properties to himself. They called it a “Ponzi-like scheme” to cover his personal expenses, staffing costs for CKO and other unscrupulous expenditures not related to real estate, the suit said.
Wolkowicki and Lampert, who both led real estate careers in Chicago before moving to Boca Raton, Florida, a few years ago, were lured into continuing to buy property through Patel after a successful initial investment in 2020. Their agreements purportedly outlined that Patel held minority ownership in the dozens of properties they bought together, while he performed management duties for a fee and got bonus payments when other investors’ capital had been returned.
It didn’t go as planned. “The results have been catastrophic” for Wolkowicki and Lampert, their lawsuit said.
An attorney for Patel, M. Reas Bowman, said his client denies all the allegations and is working to resolve the various litigation in which he’s involved. Wolkowicki declined to comment beyond his complaint.
Outside of CKO’s internal financial issues, Patel is also facing serious allegations brought to court by city officials and his lenders, including a credit card company that said he owes $60,000 after missing minimum payments. Other investors have made similar allegations to Wolkowicki regarding their financial trouble at a Southwest Side apartment property.
Tenants in CKO-managed buildings earlier this year became enraged with the deteriorating conditions of their rentals. In response, Chicago officials sued CKO over the allegedly egregious building code violations.
Lampert and Wolkowicki’s lawsuit outlines even more outlandish claims, starting in 2022, with allegedly improper transfers between property-level bank accounts to CKO entities and bank accounts controlled by Patel. He allegedly deposited at least $500,000 from an insurance payout following a fire at 6449 South Langley Avenue in Chicago into his personal bank account, and he failed to do any reconstruction or rehabilitation work to make the property habitable again, the suit said.
Patel also allegedly used over $7,600 transferred out of a Racine Street property to pay his personal mortgage; used another $1,650 to make a Range Rover car payment; and then took another $2,400 to make a Mercedes car payment, the lawsuit says. He extracted $4,400 out of another property to make car payments, the suit said.
He’s also accused of deceiving his clients into thinking their property’s bills were paid. Patel provided investors images of checks that he claimed had been used to pay for property taxes and other bills, but the lawsuit said “these checks were never actually mailed or remitted to the proper recipient.”
“In many cases, Patel aggressively evaded and delayed requests for financial information with dubious excuses,” the suit said. For example, Lampert and Wolkowicki said Patel dodged questions and asked for more time to respond last December about a $72,000 transfer, claiming his father had recently died. The couple later found out that wasn’t true, the suit said.
Patel also pledged rental revenues from various properties he was managing as collateral to secure loans from outfits including Itria Ventures, which is a “payday lender” of sorts for business owners that provides capital up front in return for receiving future lease payments. Itria and another similar company are suing Patel for allegedly defaulting on his agreements with them, too.
Wolkowicki says the alleged misconduct has damaged his relationships with lenders, triggered legal actions regarding personal guarantees he signed to collateralize millions of dollars in debt and amounted to his own big financial losses.
In the interim settlement agreement Patel signed with Wolkowicki and Lampert earlier this year, he conceded that many of the transfers described in their lawsuit were improper and benefited Patel personally, the complaint said. They’re asking for a judgment against Patel of no less than $10.8 million.
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