In Nevada, the men behind the former Lucky Dragon Hotel and Casino have reportedly been named as defendants in a trio of civil lawsuits recently filed by past investors angered at being collectively owed well over $32 million.
According to a Friday report from the Las Vegas Review-Journal, the 2.5-acre Lucky Dragon Hotel and Casino opened along the north end of the Las Vegas Strip in November of 2016 featuring a 203-room hotel alongside a 30,000 sq ft casino offering games popular in Asia such as baccarat and pai gow. But, the $126.7 million venue soon struggled to attract enough guests and was forced to close its gaming floor only 14 months later before filing for bankruptcy protections and being shuttered altogether holding debts to principal lender Snow Covered Capital of around $50 million.
Last month saw Nevada businessman, Don Ahern (pictured), pay around $36 million to buy the shuttered property at auction. The man behind Las Vegas-based construction-equipment firm, Ahern Rentals Incorporated, later detailed that he now plans to convert the nine-story venue into a non-gaming hotel and re-open its former 27,500 sq ft casino as a convention and conference space.
However, the Las Vegas Review-Journal reported that the sale has not absolved the principal developer behind the Lucky Dragon Hotel and Casino, Andrew Fonfa, as he is now being sued by Snow Covered Capital for the difference between what it had lent the failed project and what it later made from its sale to Ahern. The lawsuit filed earlier this month purportedly moreover names former project partner, Bill Weidner, and the doomed venue’s past Chief Operating Officer, Dave Jacoby, as defendants and is seeking about $10 million in damages.
Canadian gambler, Jason Chen, filed a lawsuit against the same trio in late-November alleging that he had paid a $400,000 deposit to lease the Lucky Dragon just one month prior to its closure. The action from the Vancouver-based high-roller claims that Fonfa, Weidner and Jacoby had conducted ‘coordinated efforts to extract’ these funds through ‘misrepresentation’ and ‘deceit’ inclusive of telling him that the property was profitable, witnessing heavy foot traffic and considering a number of other purchase offers.
Chen claims to have only subsequently discovered that the venue had been closed via news reports and is now due to have his claim considered via an arbitration hearing scheduled to take place on August 2.
Furthermore, the newspaper reported that the third of these lawsuits was filed in February by a group alleging to have been members of a consortium of over 180 foreign nationals who had pumped approximately $89.5 million into getting the Las Vegas venue built.
Each one of these 40 disgruntled backers claim to have handed over some $550,000 to the developer of the Lucky Dragon in exchange for a promise that doing so would enable them to enroll in the EB-5 ‘green card’ scheme. This program has purportedly been around since 1990 and allows foreign nationals to legally immigrate to the United States if they can show that they have created at least ten full-time jobs.
But, the none of the members of this group of mainly Chinese investors had yet gained admission to the United States or been granted a conditional ‘green card.’ Their action for some $22 million purportedly claims that they were ‘unsophisticated foreign nationals’ who had been ‘fraudulently induced’ into investing into the short-lived Las Vegas venue.
Finally, Ahern has not been named in any of these lawsuits and recently proclaimed that he hopes to have completely transformed the former Lucky Dragon Hotel and Casino by the end of November. The new owner moreover told the newspaper that he has no interest in the ongoing legal proceedings and has no wish to meet Fonfa or the development team.
The businessman furthermore declared that he doesn’t want to know about the failed EB-5 investors ‘because I don’t even care’ and now possesses the property with a clear title.
“I just bought a building and I own it; lock, stock and barrel.”