Father Of Disgraced Dallas CRE Investor Denies Involvement In Son's Crimes
The father of a Dallas-area commercial real estate investor and convicted fraudster has responded to claims he helped his son steal millions of dollars worth of lender funds.
Ismail Essa Bhai, father of Raheel Bhai, former head of IBF Properties and IBF Hospitality, is being sued for allegedly orchestrating a shell game that allowed his son to defraud New York-based lender Benefit Street Partners.
The saga began after Raheel Bhai falsified and forged at least 75 documents to obtain a $149M loan from Benefit Street. He claimed the loan would be used to refinance a 24-property Walgreens portfolio so IBF could launch a public offering for a new real estate investment trust. As part of his plea deal, Raheel Bhai admitted to funneling nearly $22M of the loan to a front company.
Once the scheme was discovered, Raheel Bhai and his parents disappeared to the United Arab Emirates, and from there to Pakistan. Court documents contend Raheel Bhai tapped co-conspirator Di Hao Zhang to convert more than $5M of the loan proceeds into cryptocurrency to fund the family's escape, though charges against Zhang have since been dropped, according to court filings.
In an interview with Bisnow, Ismail Bhai's lawyer Aamer Ravji said the family traveled to Pakistan for a relative's funeral, not to escape the law. They have since returned to the U.S., Ravji said.
Raheel Bhai pleaded guilty to one count of wire fraud in March and is awaiting sentencing. He faces a maximum prison sentence of 20 years and a fine of $250K, per court documents.
Shortly after Raheel Bhai’s plea deal, Ismail Bhai filed for bankruptcy, declaring estimated liabilities of between $100M and $500M. In court documents, Benefit Street alleged this was all part of the Bhai family’s goal to defraud lenders.
“When the family was ready to return, the end portion of the shell game became clear: Defendant’s son is accepting criminal liability for the fraud, Defendant has filed for bankruptcy relief, and millions of dollars in assets that the Defendant and his family previously enjoyed access to are inexplicably nowhere to be found,” the complaint says.
Benefit Street is asking a federal bankruptcy court to deny Ismail Bhai’s request to have his debt discharged. In a response filed July 11, Ismail Bhai denied the allegations made by Benefit Street and accused the lender of having engaged in wrongful actions to procure the documents used against him.
Ismail Bhai's attorneys, Ravji and Weldon Moore III, said there is no evidence to suggest their client was involved in his son's fraud and that the default judgement against Ismail Bhai was only for failure to fulfill his obligations as the loan guarantor.
"Ismail has never been indicted, has never been investigated, he has no restrictions," Ravji said. "He’s living here as a free citizen of the United States. There’s no criminal investigation, none of this is going on, and that’s why Ismail denied the allegations that individuals have raised against him in the adversary proceeding."
Ismail Bhai said in his response to the lawsuit that the debt owed to Benefit Street will be settled by Raheel Bhai prior to his father’s civil trial, which has been set for the week of May 20, 2024.
UPDATE, AUG. 1, 3:41 P.M. CT: This story has been updated to include details about Di Hao Zhang's case and additional comments from Ismail Essa Bhai's lawyers.
