LOS ANGELES (CNS) - A fugitive Chinese billionaire whose company was found guilty of wire fraud and other federal charges in 2022 is being sued by two lessees at the L.A. Grand Hotel Downtown who allege his conversion of the building into a "ruined homeless shelter with no end in sight" has exposed students and investors to drug use and physical threats.
The Los Angeles Superior Court lawsuit was filed Thursday by the nonprofit Academy of Media Arts and the still unopened ROME Nightclub against Wei Huang, Shen Zhen New World I LLC and other defendants allegedly associated with Huang. The complaint alleges fraud, breach of contract and the covenant of good faith and fair dealing, negligence and interference with contractual relations and prospective economic advantage.
"Huang's unilateral and voluntary decision to profit from the homeless shelter for an indefinite period of time has fundamentally altered the first-class character, appearance and reputation of the premises," according to the suit, which seeks unspecified compensatory and punitive damages. A representative for Huang could not be reached for comment.
Shen Zhen New World I was sentenced last May to five years probation and fined $4 million for Huang's actions and those of others who provided more than $1 million in benefits, including luxury trips and a sham loan, to bribe then-Los Angeles City Councilman Jose Huizar to obtain city approval to build a 77-story skyscraper.
U.S. District Court Judge John F. Walter said the case exposed the "crushing costs of public corruption."
At the conclusion of an 11-day trial that ended in November 2022, a jury found Shen Zhen guilty of three counts of honest service wire fraud, four counts of interstate and foreign travel in aid of bribery, and one count of bribery.
In 2010, Huang bought the L.A. Grand Hotel on Figueroa Street in what was part of Huizar's district at the time.
"For more than five years, Huang bribed Councilman Huizar with cash, casino gambling chips, flights on private jets and commercial airlines, stays at luxury Las Vegas hotels and casinos, expensive meals, spa services, prostitution services, sham loans and $600,000 in collateral for Mr. Huizar to confidentially settle a sexual harassment lawsuit," according to the suit, which further states that Huang remains a fugitive in China.
Huizar was sentenced Friday to 13 years in federal prison for using his City Hall position to shake down real estate developers for at least $1.5 million in cash and benefits in exchange for help getting downtown real estate projects approved.
The Academy of Media Arts helps provide a pathway to college and career opportunities for those in disadvantaged areas. The academy's founder and director, Dana Hammond, was a 9-year-old caregiver while his mother battled drug addiction. After entering into a lease agreement with Huang, the academy grew its enrollment and graduated 98% of its founding senior class, each of whom went on to four-year universities, the suit states.
ROME Nightclub has invested hundreds of thousands of dollars in plans, permits and a liquor license for its September opening of the establishment on the hotel's rooftop, a project which has increased the hotel's value by more than $15 million, the suit states.
But when Huang was unable to fill the vacancies at the hotel, he transformed all rooms into a homeless shelter and was paid $1.5 million a month while claiming that it was an emergency, short-term public health program, the suit states.
However, Huang continues to operate the hotel as a shelter and collect the same monthly payments, one of only two such sites in Los Angeles County where a hotel is being used in that way and he is believed to have collected more than $54 million over that time, transforming what was once a first-class hotel into a "ruined homeless shelter with no end in sight."
Academy students and nightclub financiers have been subjected to trash, assaults, hypodermic needles, violence, and safety threats, according to the suit, which further states that families have removed their children and investors have abandoned the Rome Nightclub.
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