Works by Jean-Michel Basquiat and George Condo Among Those Caught in Major Vancouver Real Estate Fraud Lawsuit

There is a new development in an ongoing fraud lawsuit against the leader of the collapsed Vancouver-based developer Coromandel Properties, whose chief executive allegedly misappropriated funds to acquire an art collection, reports The Vancouver Sun.

In 2023, Junchao Mo, a Chinese seed investor and part-owner of Coromandel Properties, and his two sons, Zhao Ming “Robert” Mo and Zi Hao “Calvin” Mo, filed a lawsuit now headed to the Supreme Court of British Columbia against Jerry Zhong, the company’s chief executive and co-owner. They allege that Zhong deceived them into investing over $100 million in the company’s Vancouver-area real estate projects, and deliberately misused those funds to purchase property, feed his own slush fund, and, among other expenditures, acquire 14 artworks worth about $4.9 million.

The plaintiffs argue that the art acquisitions were then used to secure a loan of up to $2.4 million, while Coromandel Properties, now indebted by some $497 million, was already in financial hot water. Zhong “misappropriated the line of credit funds for his own use,” according to court documents, which add that Mo, who doesn’t reside in British Columbia, “entrusted Zhong to manage his Canadian business interests and the investment funds in Canada, and generally reposed great trust in Zhong.” Zhong has denied all charges.

The legal dispute was recently back in the spotlight after a judge granted the defendant’s request to have a total of three active lawsuits against him heard together.

Meanwhile, the whereabouts of the 12 paintings and two sculptures are all unknown, according to the Art Newspaper. They include four works by Jean-Michel Basquiat, four by Javier Calleja, as well as one piece each by Rashid Johnson, George Condo, Sam Gilliam, Tania Marmolejo, Tammi Campbell, and Jordy Kerwick. They were reportedly purchased through Centre of International Contemporary Art Vancouver (CICA) and Talisman Gallery.

In the past, Coromandel Properties sponsored Vancouver Art Gallery blockbuster exhibitions, such as “Claude Monet’s Secret Garden” in 2017 and a solo show for Takashi Murakami the following year.