Ali Choudhri, already fighting foreclosure on a Galleria-area office building, is also facing a federal lawsuit alleging a scam that has resulted in over $15 million in damages.
Choudhri, CEO of Houston-based Jetall Capital, and nine others, have been accused of fraud, racketeering, bribery and the theft of millions of dollars, Bisnow reported. The dispute is tied to the five-story condo building at 829 Yale Street in the Heights area of Houston.
Austin-based construction lender Steadfast Funding filed the lawsuit, claiming fraud, bribery, racketeering and the theft of millions of dollars, in the Corpus Christi Division of the U.S. District Court for the Southern District of Texas in July. It claims that Choudhri and others bribed the property’s original developer to transfer ownership of 829 Yale Street to themselves without Steadfast’s knowledge. Choudhri and his associates never repaid a $6 million loan from Steadfast, and they engaged in 17 fraudulent schemes to retain ownership of the property, the lawsuit alleges.
The legal battle has racked up 43 cases in various county, state, federal and bankruptcy courts over the past four years, the outlet reported. Six of those were filed by Steadfast. One of Steadfast’s cases was dismissed following a motion for nonsuit in a Harris County District Court. Another, in the federal court’s division in Houston, names 35 defendants and is scheduled for a jury trial on April 22.
Choudhri and his associates, including Choudhri’s attorney Lloyd Kelley and Jetall’s former CFO Brad Parker, have faced allegations of deception and fraud, which are backed by audio recordings and transcripts supplied by whistleblower Chris Wyatt, another former CFO of Jetall.
Choudhri and his attorney have denied the accusations and suggested that the recordings and transcripts may be inaccurate and possibly edited by the whistleblower or even Steadfast’s attorney.
The saga dates back to June 2016, when Steadfast owner Marc Sherrin loaned developer Terry Fisher $4.2 million for the construction of the 829 Yale Street project.
Just before a scheduled refinancing in the following year, Steadfast found the transfer of ownership to a limited liability company associated with Jetall, indicating foul play, the lawsuit claims.
Fisher is accused of accepting $100,000 to illegally relinquish the property’s deed to Choudhri and his associates.
With foreclosures looming, former Jetall CFO Parker emerged as a crucial figure in the case. He served as a “front-man” on paper and obscured the property’s actual ownership to shield Choudhri’s assets during divorce proceedings and to prevent Steadfast from gaining ownership through foreclosure, the lawsuit states.
Choudhri’s requests to dismiss the case on the basis of past lawsuits and statute of limitations have been rebuffed. Kelley also sought to dismiss the Houston federal case, claiming a lack of essential facts and baseless attacks. The defendants, including Kelley, have filed requests for summary judgment, denying any wrongdoing.
—Quinn Donoghue
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