A Miami-based real estate developer has filed a $600m lawsuit against Genting Americas, alleging fraud related to a resort in the Bahamas.
A Miami-based real estate developer has filed a $600m lawsuit against Genting Americas, alleging massive fraud related to a resort development in the Bahamas.
RAV Bahamas Ltd., founded by Cuban immigrant Gerardo “Gerry” Capo, claimed Genting Americas used fraudulent accounting practices to saddle a joint venture with nearly $1bn in illegitimate debt, effectively wiping out RAV’s investment.
The lawsuit, filed in the US Florida Southern District Court, centres on Resorts World Bimini, a casino and hotel complex on the Bahamian island of Bimini.
RAV alleges it was enticed into a partnership with Genting in 2012, contributing over 20 acres of valuable land to a joint venture company called BB Entertainment Ltd. (BBE).
The complaint said: “To date, BBE has not distributed any profits to RAV from this venture because Genting Americas, who controls BBE’s finances, has used BBE as its financial wasteland.
According to the complaint, Genting Americas, a subsidiary of Malaysia-based Genting Group, used its control over BBE’s finances to engage in “a medley of fraudulent activities.”
These allegedly included artificially inflating profits of Genting subsidiaries, misstating income and expenses, and manipulating debt ratios of projects in the US and abroad.
The lawsuit claims BBE’s 2022 audited financial reports showed total liabilities of nearly $885m, an amount RAV said is impossible for a small island resort averaging just $22m in annual revenue.
RAV alleged the business used a web of subsidiaries to arbitrarily move money and liabilities between entities.
The complaint said: “Only a massive and coordinated fraud could dump nearly a billion dollars of debt on a small island resort.”
RAV also claimed the company denied it full access to BBE’s financial records and requests for an independent audit.
The developer is seeking damages for rendering its contribution to BBE “entirely worthless.”
In a disclosure on its investor relations portal, the casino giant said: “[Genting Americas] is of the view that the Complaint is baseless and totally without merit and will vigorously defend against the Complaint.
“[Genting Malaysia Berhad] will make further announcements as and when there are material developments”.