(Credit: Raleigh Hotel)
Real estate investor David Brillembourg categorically denied explosive allegations that former Raleigh Hotel investor Luis A. Benshimol leveled against him in both state and federal court.
A representative for Brillembourg, who runs Bri Capital, called the suits an effort “at character assassination” by a “disgruntled investor” using “demonstrably false allegations.”
Benshimol has sued Brillembourg twice – first in federal court in June 2017 (followed by an amended complaint), and then in Florida state court in early January. In the state suit, which The Real Deal reported on Tuesday, Benshimol was listed as a plaintiff in a complaint brought by a Panamanian entity called Crandal Properties. In that suit, Crandal claims an 88 percent stake in Brilla AJ RMC, the company that Brillembourg formed when he bought the Raleigh Hotel in Miami Beach in 2009 in partnership with AJ Capital Partners.
In the state suit, Crandal accuses Brillembourg of orchestrating an “elaborate shell game,” alleging that Brilliembourg took a loan backed by the Raleigh, invested it in an Anguillan property venture and then cut his partners out of the spoils.
In the amended complaint in federal suit, court, the allegations differ. Benshimol states that Brillembourg persuaded him to leave $8 million in the Anguillan venture and other investments taken from the proceeds of selling the Raleigh in 2012. In 2016, Benshimol claims he demanded the return of his investment in the Anguillan venture, but Brillembourg told him he would transfer a ground lease for a villa at the resort instead, stalled for a year, then sold the ground lease and “[stole] the proceeds from the sale for himself,” according to the suit.
Benshimol claims he lost more than $4 million in the alleged scheme. In August, Brillembourg’s attorneys motioned to dismiss the federal case on the ground the federal court did not have the jurisdiction to hear a case between the foreign entities (Anguillan entities) involved and that Benshimol did not state a claim. They moved to dismiss the amended complaint in December because it failed to remedy those issues and either way, the court still had no jurisdiction over a case between two aliens, as Brillembourg has been a resident of Mexico for 10 years, according to the motion.
Brilla AJ RMC was dissolved in 2014, records show, and Brillembourg said the company does not owe any additional money to investors. Brillembourg partnered with AJ Capital Partners through his company Brilla Group to acquire the Raleigh for $30 million, but AJ sold its position, “severed all ties with the Raleigh in 2011 and have [had] no involvement or interaction with the asset since then,” according to Chief Marketing Officer Julie Saunders.
Benshimol’s attorneys did not respond to requests for comment. Benshimol is a Venezuelan citizen who lives in Spain, according to the suit.
Jose Eugenio Silva Ritter is listed as the managing member of Crandal Properties, corporate records show, though Benshimol claims ownership over the company in both the federal and state suits.
“That is the very same Mr. Ritter who is under house arrest in Latin America while he is being investigated for numerous instances of money laundering and corruption, according to press reports,” Brillembourg’s representative said.
Ritter is reportedly listed as the director of more than 23,000 companies in the so-called “Panama Papers,” a trove of more than 11.5 million documents detailing the inner workings of thousands of offshore tax haven companies that was leaked from the Panamanian law firm Mossack Fonseca in 2015.