(CN) — A Bahamas-based company accused a Chinese firm of perpetrating “one of the largest construction-based frauds in this hemisphere,” in a lawsuit that centers around a multibillion-dollar resort complex.
Demanding at least $2.2 billion, BML Properties Ltd. filed the 259-page complaint against China Construction America in New York County Supreme Court on Tuesday. BML’s lead attorney in the case is Malcolm Lewin with Morrison Cohen in New York.
BML says the companies had gone into business together over Baha Mar, a 1,000-acre resort complex in the Bahamas’ capital of Nassau.
Tuesday’s lawsuit accuses China Construction America of falsely promising that it was working toward an “on-time and on-budget opening in December 2014.”
BML claims the Chinese firm knew this was false.
“Starting in 2012, as significant ‘out of the ground’ construction began and the first floors above the foundations were being constructed, CCA knew that it would be unable to build the project on time, on budget and in accordance with the plans and specs because, among other things, it did not have and would not commit to the project the qualified workforce or sufficiently senior managers needed to meet its representations and obligations,” the complaint states.
BML claims that it lost big because China Construction America misled it.
“As a result of defendants’ acts and omissions, BML Properties lost its entire $845 million equity investment in the project, incurred additional hundreds of millions in losses, and lost its right to all the future benefits of running a world-class multi-billion dollar resort with unparalleled amenities, including luxury hotel rooms and suites, golf, a massive pool and beach area, and the Caribbean's largest luxury casino, on property that the government of the Bahamas had originally suggested to Sarkis Izmirlian (an experienced real estate developer and the chairman of Baha Mar Ltd.) that Baha Mar Ltd. acquire and redevelop,” the complaint continues. (Parentheses in original.)
Izmirlian is the wealthy Bahamas businessman who leads BML.
BML, alleging breach of contract and fraud, says it had to file for bankruptcy in 2015. Baha Mar is now owned by another Chinese company, Chow Tai Fook Enterprises, according to the complaint.
China Construction America, Baha Mar and BML’s attorney, Lewin, did not immediately respond Wednesday to email requests for comment.
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