SANTA ANA (CNS) - A Newport Beach attorney is being sued for allegedly defrauding a lender out of about $10.2 million and using the cash to feed a gambling addiction in Las Vegas, according to court documents obtained today.
British Virgin Island-based LDR International Limited filed the federal lawsuit Feb. 11 against Sara Jacqueline King and her company, King Family Lending LLC. King did not immediately respond to a request for comment. The lender said it gave King 97 loans amounting to $10,258,500 from January through October of last year.
``Plaintiff would loan King Lending funds which King Lending and King represented to plaintiff that King Lending was using to loan the same funds to third-party borrowers,'' the lawsuit alleged. King provided a variety of forms of collateral that included ``luxury automobiles, boats, yachts, jewelry, watches, precious metal coins and the earnings from guaranteed professional sports contracts,'' the lawsuit alleged.
In one case, collateral was an Avengers comic book valued at $25,000, the plaintiff said. The lender accused King of providing ``false and fabricated documents'' to authenticate the collateral. The company also alleged that King's finance lender license became inactive on April 19 of last year.
``King falsely represented to plaintiff that King Lending's finance lender license with the DFPI was only inactive because of an `administrative problem,' however, plaintiff is informed and believes that it was rendered inactive for other reasons and that King's statement was an intentional misrepresentation,'' the lawsuit alleged.
``King and King Lending also falsely represented to plaintiff that the amount of $6,331,580 received by King Lending in loan repayments from third-party borrowers had been `redeployed' to fund purported additional loans between King Lending and third-party borrowers, instead of being repaid to plaintiff,'' the lawsuit alleged.
But no payments were maid because there were not third-party borrowers, the lawsuit alleged. Instead, King ``spent the majority of the funds loaned by plaintiff to King Lending to gamble in Las Vegas, fund an extravagant lifestyle, and for other personal uses by King,'' the lawsuit alleged. ``Plaintiff is informed and believes that King moved into the Wynn Las Vegas resort and hotel, lived there for six months, and gambled 24/7.''
The lender's attorneys alleged that her ex-husband, Kamran Pahlavi, has ``fled to Morocco,'' but has ``substantiated plaintiff's belief that King engaged in a massive fraud against plaintiff,'' according to the lawsuit.
The lawsuit includes photographs the attorneys suspect were sent to boost the lender's ``trust and confidence in King in terms of her connections, lifestyle and connections to high-profile athletes as part of her fraud and scheme.''
King ``recently provided evidence she only has $11.98 to her name,'' the lender claimed in the lawsuit. But King continued to ask for more money from the lender ``so she can try and make back the money she has stolen,'' the lawsuit alleged.