A partner of Miami-based investor David Brillembourg is suing him for allegedly stealing money in a labyrinthine shell company scheme involving the Raleigh Miami Beach hotel and a resort on the island of Anguilla.
The plaintiff, Crandal Properties, claims an 88 percent interest in Brilla AJ RMB, a Miami-based LLC founded in 2009 that bought the Raleigh that year. Brillembourg managed the company, which was dissolved in 2014, and Crandal is suing Brillembourg on behalf of all members of the company. Crandal Properties is a Panama-based entity controlled by Jose Eugenio Silva Ritter, records show.
According to the suit, Brillembourg obtained an $18 million loan from JPMorgan Chase using the Raleigh as collateral. Brillembourg’s Brilla Group owned the Raleigh together with Chicago-based AJ Capital Partners, headed by CEO Ben Weprin. AJ Capital Partners sold its position and “severed all ties with the Raleigh” in 2011, according to Julie Saunders, AJ Capital’s chief marketing officer. Brillembourg, the suit states, told his partners that he would make a short-term $12 million investment in a resort called Cap Juluca on the British West Indian island of Anguilla in the form of a loan to the developers.
In an “elaborate shell game,” Brillembourg allegedly moved the loan through two entities exclusively owned by him before lending it to the Cap Juluca developers, the suit alleges. The developers put up the ground leases for three of the many villas that make up the resort as collateral for the loan, and when they defaulted, Brillembourg’s solely owned companies took control of those ground leases.
In 2012, Brilla AJ RMB sold the Raleigh to a joint venture between David Edelstein, developer of the W South Beach, and Sam Nazarian, Chairman and CEO of sbe, according to a press release about the deal at the time. Brilla AJ RMB then paid off the JPMorgan loan. Crandal claims that because that loan was used to make the Cap Juluca investment, it owned 100 percent of the interest in the Cap Juluca investment.
Brillembourg sold the ground leases to the three villas in May 2017 and allegedly used the money to “pay his creditors from a failed banking operation, and stole the proceeds” of one villas, according to the suit.
In doing so, Brillembourg breached his fiduciary duty to Brilla AJ RMB, according to the complaint. Crandal is seeking unspecified compensatory damages, restitution, interest, and costs.