Investors in Bel Air Mansion Sue Developers for Fraud

The sale of a megamansion at 10710 Chalon Road was highly anticipated — and not only by its investors. A 2018 Wall Street Journal story touted the Bel Air project’s forecasted asking price of $88 million and its ornate amenities such as a 1,700-gallon fish tank.

But eight years into the project’s development, the house is still a construction site. An investor says the long wait is the sign of a rip off.

Jacob Wizman and his group 932 Irolo recently filed a lawsuit in Los Angeles Superior Court against developer Elite Investment Management Group, alleging breach of contract, fraud and negligence. The plaintiffs, represented by the firm Beitchman & Zekian, have asked the court for at least $20 million in damages, plus the return of their $4.5 million investment. The plaintiffs had worked with the defendants in two separate real estate projects and received returns on principal investments, according to the suit.

The complaint alleges that the investor Irolo and the developer Elite together took out about $30.7 million in loans between 2015 and 2021 to develop 10710 Chalon, located about a mile away from controversial megamansion The One. The plaintiffs allege the loans were used to pay for the defendant’s separate real estate transactions, “all the while holding Irolo’s invested funds hostage, and binding plaintiffs to deeper and deeper debt,” the complaint reads.

When the plaintiffs first invested in the project, they put about $4.5 million into the development of the megamansion, the suit states. The plaintiffs owned about 33 percent stake in the project and the defendants took about 66 percent of the home’s interest.

The plaintiffs allegedly were told that the total budget for the project would be $22 million and that in three years, the sale of the home would make a handsome profit of $40 million.

According to the complaint, the project’s budget ballooned to $60 million “without rhyme or reason, or at a minimum, an explanation.” As costs increased, construction allegedly slowed.

“As of the filing of this complaint, the property is abandoned, incomplete, unpermitted and facing an imminent trustee foreclosure, from the first position lien holder,” the complaint reads.

Elite and the plaintiff’s lawyers did not respond to emails requesting comments.