Houston Lawyers Implicated In Heights Real Estate FraudShare this story:
FOR IMMEDIATE RELEASE
July 16, 2021
Two prominent Houston lawyers, including the sister of a Republican candidate for Texas Attorney General, are accused Friday in an alleged multi-million-dollar fraud scheme in Thursday night court filings in Harris County and U.S. District Court.
Former Houston City Controller Lloyd Kelley and Michelle Fraga are the Houston attorneys accused by a construction finance lender of hiding their secret ownership of a five-story condo project in the Houston Heights while acting as lawyers for multiple clients in the five-year legal battle over the property.
The allegations include evidence the lawyers even hid their true interests from multiple state and federal judges.
The evidence filed in court includes recordings of phone conversations between Kelley, Fraga and Houston real estate developer Ali Choudhri. Both attorneys have previously represented Choudhri and his company Jetall in some of his more than 100 lawsuits, many including allegations of fraud.
Choudhri’s former Chief Operating Officer Chris Wyatt has signed a sworn affidavit the recordings were made at Choudhri’s direction. Wyatt has turned whistleblower in recent months.
“Choudhri was intending to blackmail Kelley and Fraga into giving 2017 Yale back to him by using the audio in the confidential arbitration and/or threatening their law licenses because they had Parker perjure himself and they lied to the Courts about their involvement in 2017 Yale,” said attorney Christopher Ramey in new court filings.
Choudhri’s Houston real estate firm Jetall owned the property for months before it was eventually transferred to a trust. Christopher Ramey, a lawyer for Steadfast Funding, the finance company that eventually foreclosed on the property, accuses Kelley and Fraga of setting up the fake trust, and claims Kelley bribed the trustee to do it. Ramey has a sworn affidavit documenting the scheme.
“The entire lawsuit was a fraud. This whole appeal was a sham. The greatest difficulty with these cases has always been accepting the truth that 2017 Yale was never anything more than a scam, and comprehending the depths of dishonesty required for these players to expend so much effort in these lawsuits,” Ramey said in new court filings.
In the phone recordings Kelley admits ownership of the property for years, claiming the now run-down, incomplete high-rise project was secretly given to him to settle three million dollars in legal bills the Choudhri family had run up. Kelley has represented multiple clients in the legal battle but has hidden his apparent ownership from courts.
“It’s mine. 2017 Yale is mine, not yours,” said Lloyd Kelley in the recordings. “I didn’t force you. I told Brad to do it and you owe me.”
Brad Parker, an employee of Jetall claims he is the only owner of 2017 Yale Development LLC, the company suing to get the property back.
“Kelley, Fraga (and Choudhri) bribed Brad Parker to perjure himself as their ‘front-man’ claiming false ownership of Appellant,” Ramey said in new court filings.
Choudhri admits knowledge of the real estate scheme in these phone recordings, admitting he was also trying to hide the true owner of the real estate from his ex-wife in a fight over whether Pakistani Sharia law can overcome Texas law in a divorce case.
“Because of the divorce I had Brad as my proxy front. You know that,” said Ali Choudhri in the recordings revealed in court filings.
The five story Victoria condo project was started by Houston developer Terry Fisher, then transferred to Choudhri with construction lenders never compensated. The building at 829 Yale was the collateral for millions of dollars in construction loans.
Deposition testimony confirms Choudhri convinced lenders and contractors he would finish the project.
Additional financing was provided, and now the primary lender claims Choudhri absconded much of the money and work stopped when Kelley became the secret owner.
In the court filings, Kelley is accused of offering lawyer Michelle Fraga a percentage of the real estate deal in exchange for participating in the scheme.
Kelley was a lawyer for Fisher, and then one of the lenders David Alvarez of Dallas. Kelley reportedly convinced Alvarez to give up his two and a half million-dollar lien, without disclosing he actually owned the property.
Alvarez has now hired noted Austin attorney Timothy Trickey to pursue a possible lawsuit against Kelley for legal malpractice.
The phone calls submitted into evidence in Harris County and Federal Courts also expose the contentious relationship between the pair.
“It’s always a f–king mess with you Ali. I just wanted the cash, just wanted the cash that you owe me,” Kelley said. “You traded me this crap that turned into a legal nightmare.”
Kelley once accused Choudhri of fraud in a 2013 legal fight over their bills but then helped Choudhri in the divorce case. The phone recordings document Kelley’s knowledge of possible fraud in the divorce case.
“Ali thinks he’s so slick he can f–k everybody,” Kelley said on tape.
At the end of the conversation, Choudhri is heard blasting the integrity of Kelley and Fraga. “These guys are f–ing crooks,” Choudhri said before the recording ends.
Kelley appeared to know the tapes were out there during a confrontation with the President of a Houston-based investigative media consulting firm investigating Choudhri’s multiple fraud lawsuits.
Dolcefino Consulting President Wayne Dolcefino had asked Kelley if he was the true owner of the property days before the tapes were released.
“Chris Wyatt gave you attorney client communications private with my client that he stole and you have them and you’ve listened to hours of my advice to my client,” Kelley said.
When asked if Kelley had been given the property to settle Choudhri legal bills, Kelley responded “I wish.”
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