Borrego Sun - Since 1949

Feds Investigate Patio

 

Last updated 10/3/2019 at 10:51am



Principle controller Gina Champion-Cain of The Patio Group, the management company for La Casa del Zorro Resort and Spa operations for nearly a year now, is alleged in a complaint filed by the Securities and Exchange Commission to have spearheaded a five-year, $300 million fraudulent operation that bilked hundreds of investors.

The Patio Group is also a recent and minor investor in La Casa del Zorro, and Borregan co-owner Jack McGrory said his ownership group has not made any decisions on whether The Patio Group will continue to manage the property, and says they don’t think they should do anything until they talk to the receiver.

“We were completely unaware of this fund,” McGrory said, who added he was “surprised and shocked."

“The key for Borrego is that she was a minority investor. There are five of us. We are deeply committed to Borrego and La Casa Del Zorro and our employees. This will in no way affect our operation or our future success.”

McGrory also stated, “The hotel is run very well, and the operation of the restaurants there are perfectly fine. We’ve been pleased with her (Champion-Cain’s) management, and we’re having a great year.”

The Patio Group, a division of American National Investments, took over as managing partner in November 2018.

La Casa del Zorro is among dozens of businesses listed in the preliminary injunction that are barred from being transferred or sold as long as the court order is in place.

Court-appointed receivership was established for all companies under the control of Champion-Cain, including her umbrella company named as co-defendant in the complaint, ANI Investments, a real estate development company and one of 40 companies doing business under the umbrella group ANI Development. A preliminary injunction was ordered to protect ANI investors’ interest in what turned out to be a sham liquor license escrow operation run by Champion-Cain, according to the SEC, that fraudulently lured investors into loaning money to prospective liquor license holders.

The alleged fraud was conducted through a company controlled by Champion-Cain with the promise of fast and lucrative rates of return; however, key documents are said to have been forged, along with forged signatures of officials overseeing legitimate escrow funds. The SEC asserts defendants in the case did not use investor funds to make loans to alcohol license applicants. Instead, investors’ money was said to have been siphoned off into Champion-Cain’s personal business holdings. The sham investment opportunity is likened, as reported in the SDUT, “to one of the County’s biggest investment scandals in recent decades.”

All of Champion-Cain’s assets and those of her umbrella company, American National Investments, controlling about 40 of her business interests, are now under freeze.

On the question of whether any of Champion-Cain’s restaurants, including La Casa del Zorro, would be affected by the SEC case, spokesman David Oates of the recently hired San Diego-based firm Public Relations Security said, “We do not anticipate any disruption of operations.”

A spokesman for the hotel tells the Sun that existing LCDZ management personnel “will now be much more involved in resort operations pending future decisions made by the Court-designated receiver on current and future management options.”

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