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The Real Deal Los Angeles

Manafort sued for ties to former son-in-law’s infamous Bel Air party pad

Trustee says other lenders should get paid back before Manafort
May 01, 2018 11:00AM

Manafort and the 779 Stradella Road (Credit: Getty Images)

The hits keep on coming for Paul Manafort.

President Donald Trump’s embattled former campaign manager has been sued over a house flip in Orange County, California, that his former son-in-law Jeffrey Yohai botched last year, according to The Wall Street Journal.

The suit comes as Manafort is facing more than 30 counts of bank fraud, money laundering and tax evasion related to Robert Mueller’s Russia probe, including charges connected to Manafort’s real estate dealings in New York.

The latest suit involves the infamous party house at 779 Stradella Road that made headlines earlier this year when an L.A. Superior Court judge issued an injunction against Yohai for renting it out on Airbnb to raucous guests.

A court-appointed bankruptcy trustee sued Manafort last Thursday in an Orange County court, asking a bankruptcy judge to determine that the $2.7 million Manafort gave to Yohai for the Bel-Air mansion was a capital contribution, not a loan.

The trustee, Thomas Casey, decided that the investment was not a loan. As a capital contribution it would be considered equity, which would be paid back after Yohai’s other lenders were paid, according to the Journal.

Using Manafort’s contribution, Yohai paid $8.5 million for the Stradella Road property in March 2016. Manafort gave Yohai the money after Yohai defaulted on $5.9 million in loans and filed for bankruptcy in December of that year. The bankruptcy put the brakes on lender Genesis Capital’s attempts to foreclose on the property.

Genesis Capital loaned Yohai money via a series of LLCs for four house-flipping acquisitions that went belly-up. Goldman Sachs bought the company in October 2017.

In November 2016, a New York-based photographer sued Yohai for allegedly scamming him out of $3 million that he invested in one of Yohai’s real estate ventures in 2014.

[WSJ] – Dennis Lynch