Orlando Hotel Projects In Limbo After Nik Patel's Arrest
By Paul Brinkmann
Posted October 10, 2014
Two hotel renovation projects in Orlando are in limbo in the wake of businessman Nik Patel’s recent arrest on federal allegations of fraudulently selling $150 million in loans to a finance company.
Patel is a financier who has invested millions of dollars in hotel renovations in the past year. His hotel company, Alena Hospitality, had been renovating the Crowne Plaza hotel at 12490 S Apopka Vineland Road, and the former Marriott hotel in downtown Orlando.
The hotel projects are caught up in the case because Alena Hospitality was named in a federal restraining order connected to the alleged loan fraud.
John Purdy, owner of Sanford-based VJA Construction, has filed a lien for $33,400 against the Crown Plaza property. Other liens were filed last week.
“When the news broke about Patel being arrested, we tried calling the people at Alena for days. Everyone just disappeared,” Purdy said. “It’s an amazing story. If anyone is still working on those projects, they must be just operating on faith, or waiting to be dismissed, or they know something I don’t.”
Patel’s attorney, Mark NeJame, said Thursday he was working to get a judge’s approval so that Alena could continue funding the hotel renovations.
“Alena Hospitality isn't taking on new business but will be servicing existing business… needed funds will be released to allow all to get paid as they always have,” NeJame said in an email from Chicago.
Other properties owned by Patel or Alena are also involved in the case, including a hotel in Saddle Brook, N.J., and a former Sheraton in downtown Peoria, Ill. The restraining order in Chicago was signed by a federal judge there who is hearing allegations that First Farmer’s owes Milwaukee-based Pennant Management more than $22 million.
Meanwhile, the U.S. Department of Agriculture confirmed that it has revoked Patel’s primary company, First Farmers Financial, as an approved loan provider for its Business and Investment program, a move that agency observers said was unprecedented.
The USDA action followed the FBI allegations that Patel had tried to sell more than $150 million in loans as being backed by the USDA when they weren’t.
The USDA backs various types of loans for housing and economic development, which can mean better financing and interest rates.
NeJame, Patel’s attorney, has denied the charges, noting that Patel has not been indicted, and “these are merely allegations.”
Some who work with USDA loan programs in Orlando were shocked to hear that Patel is accused of using his status as a USDA loan provider in a fraud.
“The USDA loan programs are really good ways to help people afford homes and to spark economic development in rural areas,” said Eddie Fernandez, president of Orlando Financial Center. “For someone to think they could manipulate that, well, they would have more guts than I do.”
Patel has commercial lending experience, and he also relied on a former business partner, Eddie M. Douglas of Georgia. The First Farmers Financial website, now taken down, formerly advertised Douglas as working in First Farmer’s Georgia office.
“Douglas has over thirty years of experience working for the United States Department of Agriculture in their Georgia Office…” the First Farmers website had said. “Mr. Douglas ensures that First Farmers is in compliance with all USDA regulations and requirements under the B&I program, including all USDA servicing guidelines.”