Airbnb’s partnership with a real estate developer for a branded apartment concept has turned sour.
Airbnb is suing Miami developer Harvey Hernandez, accusing him of fraudulent acts.
Airbnb says it invested $11 million to fund several branded apartment complexes but claims Hernandez’ company Newgard Development Group is guilty of fraud.
"NGD and Hernandez stole funds, made unauthorized loans to other Hernandez-controlled companies, fraudulently backdated documents, breached contracts, and then lied repeatedly in an attempt to cover their tracks," the suit says.
The complaint alleges Hernandez siphoned off $1 million and transferred it to another unrelated project and then produced fake documentation to hide this.
Airbnb is seeking to nullify the contract and wants repayment of its investment
The two companies signed a deal to open branded apartment projects which would be managed and marketed by Newgard.
Airbnb had targeted opening the ‘Niido Powered by Airbnb’ branded apartments in 14 locations by 2020, but only two have opened so far.
As well as the return of its investment in full, Airbnb is demanding unspecified costs and punitive damages.
