Embattled Los Altos developer Vahe Tashjian is being sued by a host of creditors seeking to recover up to $46 million in lost investments in a myriad of projects under Tashjian’s company, Dutchints Development LLC.
Tashjian repeated “I don’t know” in response to a barrage of questions during a hearing with investors on Friday. He was linked to the search for financial documents and the recovery of money from his ill-fated business Dutchints. Tashjian, representing Dutchints, filed for bankruptcy last year.
A lawyer for Tashjian said he needed more time to go through the files. A new hearing is scheduled for July 21.
Tashjian’s massive real estate project at 5150 El Camino Real in Los Altos failed to materialize last year after the developer and Dutchints defaulted on a loan for the 3.8-acre property and she went into receivership. The property was put up for bid, with Prometheus Real Estate Group seizing the site in court at the relative bargain price of $48 million.
Investors say Tashjian turned down previous real estate offers ranging from $60 million to more than $80 million and did not disclose the offers to them. A February 2021 civil lawsuit filed by investors also accuses Mark Yazdani and Farzin Shakib of 5150 Group Manager LLC, the guarantors of the $41 million loan for 5150, of abetting Tashjian by not selling the property even though they knew the project was short of funds. Both are syndicated projects under the name Edge Development Group LLC, which just launched a project at 444 First St. in Los Altos.
Yazdani said he and his partner were also victims of the botched 5150 project. They have a $2.5 million judgment against Tashjian and Dutchints.
“We lost all our money in the deal ($1.35 million),” Yazdani told the town crier last week. “Everyone lost every penny.”
Yazdani said they had no control over the project with Tashjian as director.
“We haven’t negotiated with potential buyers,” he said.
Project 5150 is one of many projects for which Tashjian sought money from investors but failed to produce returns as well as projects. Currently, there are more than 20 active court cases against him.
Tashjian has so far failed to produce most of the requested financial documents, despite several court requests, and has not been present at most hearings. A judge on June 14 authorized the return of his passport so that he could attend an event in Mexico.
The town crier has reached out to Tashjian for comment. In a June 24 email, he replied, “I would like to log in to give you a different perspective on what has happened over the past few years.” He added that he should check with his attorney first.
Subsequent outreach over the past two weeks has met with no response. In the past, Tashjian has claimed no wrongdoing and that the COVID-19 pandemic has negatively impacted his business.
At Friday’s hearing, Tashjian said his main goal was to “unify” investors. … The opposition prevented me from doing exactly that. … That has been my main intention for the past two years.
A lawsuit filed in May by Harden Homes is the latest in a long line of lawsuits against Tashjian, who has been accused of playing a ‘shell game’ by improperly using funds from investors in a project to pay for it. another. Harden is seeking to recoup $3.6 million in investments, plus interest.
A November 2020 bank statement shows $1.1 million in Harden funds going to Project 5150, according to court documents, with a promise from Tashjian to investors that the project would produce a 200% return in 30 months. Meanwhile, Harden’s lawsuit argues that Project 5150 was “significantly underwater.”
According to the May 10 lawsuit, “Tashjian intentionally provided the plaintiffs with false information to induce them to send him money – all the while, Tashjian was using that money for things other than what he had promised the plaintiffs for. ‘it would be used’.
Court documents reveal that a similar tactic was allegedly used to secure funds for incomplete projects in Sunnyvale and Saratoga.
Early investors in Project 5150 said they lost all their money – about $14 million – and fear there is little chance of getting it back.
“I’m so frustrated,” said a 5150 investor, who also blamed the court system for favoring the defendant. “He had luck after luck after luck” (to produce financial records).
Tashjian and Dutchints defaulted on a $41 million loan for the 5150 property last year. Investors claimed he diluted investors’ profits and failed to disclose that 5150 ECR Group had been insolvent since 2019.
Property 5150, currently an office development that included Dutchints offices, had been cleared for a 196-unit condominium and townhouse complex.
The project, approved by the Los Altos City Council in 2019, included 28 affordable housing units. Prometheus has yet to announce plans for the site.