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Host Hotels accuses Molinaro Koger of real estate fraud

BETHESDA, MARYLAND The largest U.S. hotel owner has leveled serious accusations of fraud against a prominent real estate brokerage.

Host Hotels & Resorts Inc. is suing Molinaro Koger Inc. in Maryland state court, alleging that the brokerage set up front companies to buy Host hotels with the intent of later reselling them for profit. The lawsuit outlines US$15 million worth of gains allegedly reaped from flipping Host’s hotels without its knowledge, The Wall Street Journal reports.

Rob Koger, president of the Virginia-based brokerage, calls the accusations “baseless” in a written statement. The firm vows to “vigorously defend” itself against the charges. “The fictitious complaint is belied by the fact that senior management at Host had complete knowledge of the transactions of which they now complain,” Koger says.

Molinaro Koger handled 11 real estate transactions on Host’s behalf between 2004 and 2010, according to the lawsuit filed by Host, which claims that three of the transactions were fraudulent.

In 2009, Molinaro Koger brokered the sale of Sheraton Stamford Hotel, Connecticut, and Washington Dulles Marriott Suites, Maryland, to a company headed by a Molinaro Koger employee and a business partner of Rob Koger; the buyer then resold the hotels on the same day to another bidder for US$13 million more, according to the lawsuit.

Molinaro Koger denies that any of its employees or associates was involved in the companies that bought the hotels from Host.

Meanwhile, the brokerage is continuing with an eight-month investigation into a break-in at its headquarters in which financial records were stolen. Since then, unidentified parties have been sending “false and malicious correspondence” to Molinaro Koger clients, according to the firm. “This whole event seems like the plot of a John Grisham novel, where we are the victims,” Rob Koger says.

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