Ace Hotel in Manhattan (Credit: Wikimedia Commons, Purple Slog)
A Los Angeles-based firm that specializes in deploying EB-5 capital allegedly shut an Atlanta-based regional center out of profits made from marketing projects to Asian investors, a new lawsuit claims. The projects mentioned in the suit include the Ace Hotel in Manhattan.
The Atlanta firm, Southeast Regional Center (SRC), and its owner Moses Choi filed a $3 million suit against L.A.-based 8th Bridge Capital, which it had agreed to partner with on various projects. SRC alleges that between 2015 and 2017, 8th Bridge head Young Hun Kim took half a million dollars from the firm for businesses and marketing expenses, including trips to Asia to pitch EB-5 projects and to the costs to open 8th Bridge’s Downtown office.
Choi alleges that he and Kim signed non-disclosure agreements and that he shared confidential company information, including investment contacts, during the course of their partnership. At one point, Kim created business cards for Choi that described him as a managing director at 8th Bridge.
Choi and Kim worked together, using Choi’s contacts, to market the Ace Hotel project to would-be immigrant investors through a company called MRE Fund GP. Their goal was to raise $20 million from 40 foreign investors to loan to Omnia Group, Ltd, for which they would receive fees for delivering the investors. The company has allegedly received more than $1 million in compensation from the Ace Hotel. Kim allegedly had full control over that business, but never told Choi. He would later use that to keep proceeds from Choi, the suit alleges. Representatives for Ace couldn’t be reached by press time.
Then in early 2017, Kim “began to take steps to carry out a plan to disavow and deny, or rescind without cause” their partnership “so he would not be required to share profits” from any projects for which they garnered funds, Choi alleges. Kim transferred $200,000 to Choi to partially repay the latter’s funding for 8th Bridge, and said that their questions around their “partnership terms” remain “unanswered.”
A former SRC employee, Patrick Jongwon Chang, also allegedly “conspired” with Kim in the scheme, and jumped ship to join 8th Bridge this year.
An attorney for Choi said that the suit had not yet been served and did not expect a court date until sometime after February. Kim and 8th Bridge could not be reached by press time.
Its not the first lawsuit to involve dealings at the Ace Hotel chain, which has nine locations around the U.S. and London. Multiple legal scuffles have arose between stakeholders over ownership and profits at the chain..
Christian Bautista contributed reporting.
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