CBRE Group Inc. is settling a class-action lawsuit in Florida district court for $100 million, Bisnow reported.
The suit alleges that the real estate services firm and one of its employees helped Cabot Investment Properties executives embezzle tenant funds. Carlton Cabot and Timothy Kroll controlled Cabot Investment Properties, the sponsor of a tenant-in-common structure in Florida that owned six office buildings, and its asset manager, LeaseCos. LeaseCos had hired CBRE to manage the properties, according to the report.
Cabot and Kroll embezzled about $17 million from investors and pleaded guilty to fraud between 2015 and 2016. The 179 plaintiffs in the suit said they lost over $139 million and that the $100 million settlement accounts for 71.6% of their total damages, according to a court filing.
CBRE and Gloria Hernandez, the employee named in the suit who managed a number of the properties, deny any involvement in the embezzlement, claiming they had no contact with the investors and never saw any of the quarterly reports sent to the investors, according to court documents.
CBRE settled the suit in order to avoid costly litigation proceedings, the publication noted, citing a CBRE spokesperson.