LAS VEGAS (CN) – A restaurateur says he was scammed out of millions of dollars by billionaire real estate developer Eskandar Ghermezian, who convinced the restauranteur to run a set of clothing boutiques in Las Vegas. more
“As a result of Ghermezian’s fraudulent and malicious course of business, plaintiff’s marriage collapsed, he was financially devastated, his cars were repossessed, his home was foreclosed on, and his health was ailing,” Frederick Knight claims in Clark County Court.
Knight, 28, claims Ghermezian used his wealth and power to coerce Knight into running a more lucrative boutique clothing store – and not a restaurant – at one of Ghermezian’s strip malls in Las Vegas.
“Impressed that he was sitting in the same with a billionaire and visionary,” Knight says he agreed to the proposition, and eventually found himself with three such clothing boutiques, all with different names, at three malls in Las Vegas valley.
When business slowed, Ghermezian went from “being a millionaire to being in financial turmoil,” with Ghermezian pointing the finger at Knight, the plaintiff claims.
Knight says an employee in the accounting department at Ghermezian’s company, Triple Five Development, then made a series of alarming admissions: that Knight was not evicted for not paying his rent was because the company used his leases to get financing from the bank for its projects, and that the higher the rent receipts, the more money the bank would lend it.
The informant also told Knight that he was encouraged to give the stores different names to ensure that there were no “red flags” raised by the financing banks, for fear they would request background financials on the tenants, according to the complaint.
Knight also says Ghermezian sold one of his stores for $120,000 – money Knight never saw.
The Ghermezian family built the giant Edmonton Mall in Montreal and Minnesota’s Mall of America, two of the world’s biggest shopping centers.