Four Seasons Accused of "Massive Fraud" by Condo Owners
|Marc Averette via wikimedia commons|
|The Four Seasons Hotel on Brickell Avenue|
So she couldn't believe her luck when, while living in Miami, the haute hotel chain announced sales for special apartments at its new tower on Brickell. Sawa leaped at the chance to invest.
"I equated the Four Seasons with perfection," she says. "I couldn't possibly imagine that I'd be ripped off."
Sawa is one of nearly a dozen plaintiffs who say the Four Seasons tricked them into buying doomed condominium hotel units. According to their lawsuit, the hotel -- along with developer Millennium Partners -- "duped" investors such as Sawa into paying grossly inflated prices for the condos by promising $5,000 per month in returns. Then, instead of advertising the units as promised, the Four Seasons hid them from renters in order to make money off of its hotel rooms.
Neither the hotel nor the developer could be reached for comment, but they are battling the lawsuit -- and two others like it -- in court.
The trio of lawsuits has tarnished the Four Seasons Millennium tower, Miami's tallest building. It was completed in late 2003, shortly before Sawa signed for a small studio apartment on the 33rd floor overlooking the bay. Lured by the Four Seasons name and brokers' promises of sure-thing returns, she forked over an astonishing $500,000 for the 624-square-foot apartment plus $30,000 for Four Seasons-approved furniture.
Hotel representatives told Sawa their international marketing machine would ensure that her condo was rented and give her 80 percent. But she and fellow condo owners quickly noticed something was wrong: Despite a booming economy, no one was renting.
"The financial performance was horrible," says Jose Guardado, a midlevel executive at a software firm who spent $800,000 on a one-bedroom on the 35th floor. "We couldn't understand what was going on."
When Guardado, Sawa, and others complained, they were told to give the new hotel time to advertise.
By 2007, condo owners had banded together. They called the hotel, pretending to be foreigners interested in renting their apartments.
"They would tell us that the apartments didn't exist," Guardado says. "Once I called and they told me: 'Why would you rent that one? It's more expensive than a regular hotel room.' "
That was when Guardado says he finally realized the scam: Not only did Four Seasons refuse to advertise the condo hotels, but also it rented them only when the hotel was full and priced them exorbitantly year-round. While the hotel enjoyed 60 percent occupancy, the condos were empty 310 days a year -- losing money.
"We were supposed to have the hotel's giant marketing machine working for us," Guardado says. "Instead, that marketing machine was working against us to make the hotel rich at our expense."
When they learned of the scheme, Sawa and Guardado tried to sell. But word had leaked and the condos were widely considered "radioactive." Guardado went into bankruptcy. Sawa lost the condo as well as her apartment on Collins Avenue.
"They destroyed me completely," says Sawa, who drained her savings trying to salvage the investment. "I lost seven years of my life over that unit."
Among those that she blames are Bill Gates and Saudi prince Al-Waleed bin Talal, who together now own 95 percent of the Four Seasons empire.
"He should change the name to 'The Bill and Melinda Gates and Bozena Sawa Foundation,'" she says of the Microsoft founder, "because he's been giving away my money too."
A jury trial will begin next May. Guardado is seeking $1.1 million in damages, but not the condo.
"They can keep the place," he says.