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A developer is suing, alleging that his executive spent the company’s money on luxury homes, cars and handbags.
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First, the state accused Shangri-La Industries of fraud. Now, the homeless real estate developer has accused his old accountant of living on red meat after stealing his business.
The downtown Los Angeles-based developer of motel-to-home conversions has sued Cody Holmes, its former chief financial officer, for allegedly embezzling millions of dollars, the San Bernardino Sun reported.
Shangri-La accused Holmes, 29, of bank fraud and sending checks from 2022 through last year to lenders, banks and brokers, according to the complaint.
The company alleges that its former chief financial officer transferred huge sums of cash and corporate assets to bank accounts and shell companies he created and controlled, as well as to his alleged ex-girlfriend, 28-year-old Madeline Witt, who is also a defendant in the lawsuit.
The lawsuit, filed a month in Los Angeles Superior Court, seeks more than $40 million in damages.
While the developer defaulted on similar loans to Project Homekey sites, Holmes and her friend experienced the best life in Los Angeles, according to the complaint.
PARA Witt: Covers $46,000 per month of rent on a rented space in Beverly Hills. Regulate up to personal jets. He rented Bentley Bentayga and Ferrari Portofino cars and $12,000 to cover the student loan payment, according to the lawsuit.
Holmes also rewarded himself and his friend with two Birken bags valued at about $128,000. Chanel and Louis Vuitton bags valued at more than $14,000. A $127,000 Riviera diamond necklace. An Audemars Piguet diamond watch valued at $35,000. And 20 VIP passes to last year’s Coachella music and arts festival, valued at more than $53,000, according to the lawsuit.
Holmes and Witt did not respond to several emails, phone calls and text message comments.
Shangri-La fired Holmes in January following an internal investigation, according to court records. He applied at Shangri-La as an intern in 2014 while studying at USC, earned a master’s degree in finance while working at the company as a CFO, and then in 2019, I became CFO.
Lawyers representing Shangri-La, its affiliates and CEO Andrew Meyers Abdul Wahab, who is going through his so-called “Meyers” professional, filed a lawsuit to obtain a temporary restraining order to prevent Holmes from taking cash from the flight from nine bank accounts he controls.
After being fired, Holmes continued to make large purchases, renting a new Porsche Taycar and renting a luxury home in the Hollywood Hills, according to Shangri-La’s attorney, Brian Sun.
A ruling denied Sun’s request on March 7, but the attorney said he plans to move the case forward by filing some other motion. In a phone interview, Sun said Holmes is “squandering his assets as we speak. “Sell assets.
The cases in Shangri-La are no less harmonious.
Since 2020, the state Department of Housing and Community Development has counted on Shangri-La Industries with more than $121 million in Homekey’s budget to convert motels across the state into permanent supportive housing for the homeless.
The developer then defaulted on similar loans to seven homes and owed about $41 million in notable debts as of Dec. 1, The Real Deal reported. In separate court cases, the lenders sued Shangri-La and asked the court for receivership. An option to bankruptcy.
In January, Shangri-La Industries lost six of the seven former motels at Project Homekey sites to court-appointed receivers in Salinas, King City, San Bernardino and Redlands.
After TRD reported the breaches, the state opened an investigation into Shangri-La and found that the company had violated its operating agreements as had six of the properties. In January, state Attorney General Rob Bonta filed a lawsuit against the company, alleging that the developer had violated state contracts and alleged fraud.
Shangri-La manages and still owns a property in Thousand Oaks under contract as part of the Homekey project, even though the company is facing at least three contractor lawsuits over that property, claiming unpaid mechanic’s liens.
Backward Hollywood manufacturer Steve Bing founded Shangri-La. Meyers, the CEO, has in the past blamed the state for the company’s defaults, arguing that because officials failed to point to regulatory arrangements for deals, lenders caused the defaults.
—Dana Barthélemy