Russian Bay Harbor developers ran California cannabis business into the ground, lawsuit alleges

Paul King, Roman Temkin, and renderings of Pearl House and Le Jardin

After he was sued for allegedly not repaying a $3 million loan, Sunny Isles Beach cannabis entrepreneur Paul King is accusing the Russian developers who lent him the money of ruining his California marijuana venture.

Last week, King filed a lawsuit in California’s Monterey County against Roman Temkin and Dimitry Romantsoff, five other individuals and six corporations tied to the two men. In the complaint, King alleges Temkin and Romantsoff engaged in fraud during the three years they wooed him with a promise to raise $21 million for his budding cannabis empire.

Court documents indicate Temkin and Romantsoff — who also uses the spelling Romantsov — are the true owners of Verzasca Group, a firm that developed two boutique condo projects in By Harbor Islands, and Gia Investments, the company that lent the $3 million to King’s companies, California New Wave and Cannafornia. Gia Investments sued King in Miami-Dade Circuit Court on April 9 for nonpayment of the loan.

King declined comment and his attorney did not respond to a request for comment. Eric Ostroff, the lawyer for Gia Investments, said King’s California lawsuit is based on false allegations. “The timing of this lawsuit strongly suggests that it was filed to retaliate against the lawsuit filed against Paul King in Florida,” Ostroff said. “We look forward to disproving these allegations in court.”

Temkin and Romantsoff are separately suing King for defamation, alleging he emailed false statements about them to one of their financial backers and that he created and posted a Youtube video falsely accusing the two Russians of defrauding U.S. citizens in a Miami real estate scheme. That complaint, filed on March 26, states Temkin’s and Romantsoff’s “real estate development efforts include several multimillion condominium projects, including but not limited to certain projects commonly known Pearl House and Le Jardin [Residences], both in Bay Harbor Islands.”

The projects are being developed by Verzasca Group, a company that on state corporate records lists former NHL player Darius Kasparaitis as president, and Tim Lobanov as managing director. They have been the public faces of Verzasca Group since the company was formed in 2015. But Linkedin and Zoominfo profiles for Temkin and Romantsoff list them as partners in Verzasca Group. In February, the firm avoided a foreclosure on Le Jardin after a federal judge approved a bankruptcy plan for the project.

In King’s California lawsuit, the cannabis entrepreneur, who is a Sunny Isles Beach resident, claims he met Temkin and Romanstoff through a longtime family friend in November 2017. They told him they were interested in helping him scale up Cannafornia and could assist him by investing their own capital and raising funds from wealthy Russian investors. King claims he was also convinced into giving Romantsoff a managerial role in Cannafornia. The Russians touted their years of experience in real estate development in their home country, according to the suit.

“King saw this as a unique opportunity to learn from experienced and wealthy businessmen and to make his dream a reality,” the lawsuit states.

Instead, throughout 2018 and into 2019, Temkin and Romantsoff attempted a hostile takeover of Cannafornia by installing themselves and their relatives into key positions of the company, including hiring Romantsoff’s step-son and sister, according to the suit.

“By doing this, Romantsoff, Temkin and their relatives were able to engage in widespread fraud and embezzlement, converting funds and goods belonging to Cannafornia on a massive scale,” the lawsuit alleges.

Even though Temkin and Romantsoff had only brought in $4 million of the $21 million they had committed to raising, King claims Temkin convinced him to lease two more properties in Salinas to expand Cannafornia’s operation. Temkin promised King he would use the proceeds, roughly $15 million, from the sale of a project in Saint Petersburg, Russia, to finance Cannafornia’s expansion, the lawsuit claims.

“Plaintiffs never received the additional $15 million in funding that Temkin promised and upon which plaintiffs had relied in leasing the [two properties],” the lawsuit states. “This was a huge blow to Cannafornia’s business and placed an incredible amount of stress on King as Cannafornia did not have money to meet its obligations for the rent and build-out of these new properties.”

The post Russian Bay Harbor developers ran California cannabis business into the ground, lawsuit alleges appeared first on The Real Deal Miami.

from The Real Deal Miami & Miami Florida Real Estate & Housing News | & Curbed Miami - All https://therealdeal.com/miami/2020/04/20/russian-bay-harbor-developers-ran-california-cannabis-business-into-the-ground-lawsuit-alleges/
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