An international assortment of investors in the co-working startup Bar Works filed a securities fraud suit in the Southern District on Monday over allegations the company co-founder, Renwick Haddow, was operating a Ponzi scheme.
The suit seeks almost $4.1 million in lost investments, as well as $20 million in punitive damages, from the companies connected to Bar Works, Haddow and a co-defendant.
According to Zavattiero v. Bar Works, 17-cv-05386, Haddow is facing two counts of wire fraud in connection to a scheme that includes the alleged Bar Works fraud. London authorities also are investigating Haddow for allegedly engaging in similar fraudulent activity. Haddow had been targeted by U.K. financial authorities over what reports at the time alleged was a Ponzi scheme.
The 51 plaintiffs in the Southern District suit allege they were guaranteed yearly returns as high as 16 percent, and a 100 percent repayment of their initial investment in 10 years. Bar Works had opened six locations in New York City by October 2015, as well as locations in Miami and San Francisco, with plans to expand across the United States and into Turkey.
In an attempt to conceal his role in his most recent actions, Haddow presented himself as "Jonathan Black" and "went to the extraordinary length of creating a spurious LinkedIn profile for this fictitious person," the suit claims.
The plaintiffs invested in Bar Works from 2015 to 2017. By April 11, then-CEO Franklin Kinard was forced to delay minimum payments to investors, and soon announced the company had "serious operational problems," which the plaintiffs say were caused by Haddow and his co-defendant's fraudulent scheme.
Maalouf Ashford & Talbot name attorney John Maalouf represents the plaintiffs. Neither he nor Haddow could be reached for comment.