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Hard Rock Hotel Hits Hard Times with Fraud Suit
The trendy Hard Rock Hotel of San Diego, the first ever condo for that city, was sued for fraud last month by a group of investors who claim that they were lured with a “bait and switch” scheme.
Investors bought suites and had the right to occupy them for a maximum of 28 days a year. For the rest of the year, they would be occupied by their clients, time-share owners.
Plaintiffs, Tamer Salameh and Real Estate 4 Hospitality LLC claim they have lost a bundle of money on their investments. The suit will attempt to become a class action. Defendants include Irvine’s Tarsadia Hotel, officials Tushar and B.U. Patel, and 5th Rock LLC.
The suit charges that the investments were not registered with either the Securities and Exchange Commission or the California Department of Corporations.
The promoters allegedly used bait and switch techniques in selling the investments. Plaintiff’s attorney Mia Severson says that investors were told the rental program was not mandatory, but it was. It was not feasible for investors to operate their own rental management system, as they were promised, the suit says.
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