A lawsuit against well-known Atlanta developer Shi Shailendra expanded Thursday to include officers of Shailendra Group and related companies and a string of Georgia banks and their officers, alleging they contributed to fraud that cost investors tens of millions of dollars.
James Johnson, an attorney for Shailendra and other defendants said there is nothing new in the revised suit. He characterized it as a quest for money by unhappy investors who lost money when the real estate market crashed.
The legal dust-up now includes more than a half dozen suits, including a countersuit by Shailendra.
“On paper [the investors] thought they had a lot of money,” said Ryan Isenberg, an attorney for some of the plaintiffs. “It turns out that was not the case.”
The revised suit, filed in Fulton Superior Court, claims Shailendra and his family spent investor money as if it were their own, and that officers of Shailendra companies and more than half a dozen banks bent and broke rules to allow that. It claims they let Shailendra move money around in more than 75 accounts with simple phone calls, and wrongfully obtain personal guarantees for bank loans from investors.
The banks were driven by the earning fees on the activities, the suit claims.
The suit names operating and failed banks in Georgia, including Heritage Bank, United Community Bank, First National Bank of Barnesville and Colonial Bank as part of the alleged conspiracy.
“My clients were harmed not just by the money they lost, but by the money they may be on the hook for to the banks that they personally guaranteed,” Isenberg said.
Johnson said including more people in the suit is an attempt to gain leverage to force defendants to negotiate a settlement.
“[One plaintiff’s] attorneys have reached out to us several times to settle, but we have done nothing wrong so we are in no position to give them anything,” Johnson said.
Shi Shailendra is a leading figure in Atlanta’s Indian community and over the years became a political player as well. His plan to build a billion dollar real-estate empire, fueled largely by money from others in the Indian community, began crumbling with the real estate crash.
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