Local real estate agents face $5.6M lawsuit

| 30/03/2015 | 11 Comments
CNS business

Michael Beggs

(CNS Business): Re/Max Cayman Islands, as well as agents Kim Lund, James Bovell, Oliver De Hart and prospective developer, Michael Beggs, are all facing a multi-million dollar lawsuit in the US over commission taken on condo sales in a proposed East End development that never happened. The men are accused of conning people into paying deposits on condos at the proposed Island Resort, a luxury ‘condotel’ that went bust before the developer broke ground.

The 87 page suit (Case: 1:15-cv-02542) filed in the Northern District Court of Illinois by the joint official liquidators of the former development company and the would-be buyers alleges that the men made false claims about the development and its financing, as well as the number of sales, in order to “bilk” some 30 clients out of more than $5.6 million in deposits.

The case relates to a proposed luxury five-star condo-hotel development which was planned for a site in East End close to the Reef Resort. The project, however, never materialized and the development firm behind the project, Caribbean Island Developments Limited, went bust.

The legal action accuses the men of engaging in aggressive campaign of deception between 2007 and 2011 to get people to buy and hold condos in project.

“This campaign included knowingly false statements to prospective purchasers,” the suit alleges. These included that the Island Resort Project had obtained financing when in fact it had not and never did; that construction had begun, although it never did; and that sales had exceeded 40% of available units, though at the peak they never passed 33%.

The defendants also claimed to have bought condos themselves when in fact they were given free condos by the developer Beggs and De Hart, who was a director of the development company as well as an agent.

Kim Lund told CNS that he and his colleague, Bovell, and RE/MAX Cayman Islands were aware of the lawsuit filed against them in the United States by the Joint Official Liquidators of Caribbean Island Developments Limited but none of them have been served documents in the case and so they were reserving comment on the allegations.

Lund’s attorneys stated that the claims had no merit whatsoever and that the men intend to “vigorously defend any such claims at the appropriate time”.

United States litigator Robert J. Palmersheim of the Chicago law firm Schopf & Weiss LLP has been retained to defend the parties in the United States Courts and “vindicate their good names and reputation”, the realtors stated.

“Palmersheim and his firm will take appropriate action if and when Mr Lund, Mr Bovell, or RE/MAX Cayman Islands are served with a lawsuit,” the layers added.

CNS Business

Architectural rendering of The Island Resort and Residences

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Category: Local Business, Real Estate

Comments (11)

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  1. Anonymous says:

    Anyone know the current status of this?

  2. Anonymous says:

    From CIREBA’s “code of ethics”
    A Member must always protect and promote the interests of their principal. This obligation of good faith means that the principal’s interests must be put above all other persons, including the Member’s own interests. However, in any dealings, Members pledge themselves to treat all parties honestly and fairly.
    Members shall be careful at all times to present a true picture in their advertising and representations to the public. Members shall also ensure that their membership of CIREBA is clearly stated in any such advertising.
    It is the duty of a Member to protect the public against fraud, misrepresentation or unethical practices in connection with real estate transactions of which they are a part of at all times.
    A Broker Member shall, at all times, be responsible for the actions of their employees/independent contractor in their business relations with fellow Members, principals and members of the public, in accordance with the Rules & Regulations and this Code of Ethics…
    After reviewing the complaint, tell me that Cayman Real Estate should be “self regulating”

  3. Anonymous says:

    So what is CIREBA saying? Are they supposed to regulate their members? Is this end of this cartel?

  4. Anonymous says:

    If the lawsuit has been filed and has a case number, James & Kim will be served. Once that happens, CIREBA should suspend them from operating.

  5. Anonymous says:

    I want to hear what CERIBA says about this. They should be suspended.

  6. Anonymous says:

    Making millions on absurd high commissions, forcing real estate brokers to work with Cireba, taking additional commissions, making millions a month, and then being sued for a few million for being to greedy IS NOT NEWS.
    Selling fried chicken at Fosters to save money for your child that needs a medical treatment that is not covered by the greedy insurance company, THAT is news.

    Why don’t you write about that ?

    CNS: If you or someone you know is in this position, please let us know. Email wendy@cns.tips or kenneth@cns.tips

  7. Anonymous says:

    You make millions, you loose millions. So what. . . . .

  8. Anonymous says:

    What do you expect I am so glad this case in in the US courts.
    I am sure that complaints fell on deaf ears in cayman and that is why it is in the states
    The island is run by a bunch of criminals and T&C is nothing compared to cayman except that the queen loves T&C and saved those people

  9. Anonymous says:

    land of scams

  10. Anonymous says:

    Don’t forget that many companies on Cayman were also ‘duped” into providing their services on the promise that payment would be forthcoming. We are still owed money.

  11. Kadafe says:

    Thanks a lot for making people afraid to invest here. You have made a great contribution to the community! Tsk tsk shm! These real estate brokers na righ enough yet?

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