A New York couple has sued metro Atlanta developer Shi Shailendra, claiming he never invested $500,000 they placed with him and bounced checks when they demanded their money back, according to a lawsuit filed last month in Fulton County Superior Court.
The suit is the latest in a string of cases brought by investors in companies managed by Shailendra, known for developing medical office buildings across the region and for a planned Midtown Atlanta hotel, condo and office project that was ultimately stalled by the economy.
In six other suits, a handful of investors accuse the Midtown-based developer of taking investor cash and mismanaging and co-mingling funds. Another case targets a bank Shailendra did business with. Shailendra has claimed the investors are trying to ruin him.
In the latest case filed Feb. 25, Drs. Bhagwan and Tripta Dass claim they invested in Shi Investments Six, a real estate investment fund, but that Shailendra never provided stock certificates or other proof that an investment was actually made.
James Johnson, an attorney for Shailendra, denied any misuse of funds or fraud.
Johnson said the Dass’ money is part of an investment in Cobb County real estate purchased by Shi Six. He said Shailendra was under no obligation to repay funds under terms the investors signed.
Terms of the company outlined risks in investing in an illiquid security, Johnson said.
The Dasses borrowed money from a lender to invest in Shi Six, Johnson said, and after suffering financial troubles, “[Shailendra] tried to work with them to address [the investors’] financial concerns by lending them money out of his own pocket."
Tripta Dass said in an interview she and her husband lost hundreds of thousands of dollars in an earlier Shailendra investment. They became nervous about their second deal because of a lack of disclosure about how funds were to be used and demanded their money, she said.
Shailendra reported the first sale of stock in Shi Six occurred in December 2008, according to a March 2009 Securities and Exchange Commission filing. The Dasses claim their investment was made months earlier. They signed a subscription agreement for the stock, but Dass claims Shailendra was evasive about their money.
Dass acknowledged borrowing the investment money, but denied financial trouble. After repeated requests for their money back, Shailendra’s wife sent two checks for $250,000 each in July 2010, which bounced, the suit said. Last month, Shailendra wired $50,000.
“If you are doing something out of goodness, you don’t write them a bogus check,” Dass said.
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