According to the complaint, Cody Holmes, 29, used his position with Shangri-La Industries to transfer vast sums of money to himself and Madeline Witt, 28, to pay for exotic cars, expensive handbags, jewelry, private jets, concert tickets and the monthly rent for a 6,500-square-foot mansion in Beverly Hills.
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"He took advantage of his position and embezzled millions of dollars using fraudulent and deceptive means to do so," said Brian A. Sun, an attorney representing Shangri-La Industries. "(Those schemes included) doctoring up signatures, creating documents, and opening up fictitious accounts as detailed in our complaint."
Company CFO accused of using funds for homeless to buy luxury goods for girlfriend
According to the complaint, several years ago Shangri-La Industries utilized state funding made available through affordable housing programs such as Project Homekey to build and maintain low-income housing projects designated for the homeless.
But several of the properties are now in foreclosure, including Project Homekey developments at former motels in Redlands and San Bernardino. The company is being sued by the California Department of Housing and Community Development for breach of contract.
Fraud suspected as several low-income housing projects in SoCal face foreclosure
Fraud suspected as several low-income housing projects in SoCal face foreclosure
Shangri-La's attorney blames the former CFO's embezzlement schemes for the company's predicament.
"Besides being shocked, disappointed and horrified with Holmes' actions, we're astounded to the level and degree that he went to achieve and manipulate others besides us in pursuing his fraudulent activities."
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According to the lawsuit, Holmes and Witt are accused of fraudulently using Shangri-La funds to purchase luxury items such as a $35,000 Audemars Piaget diamond watch, $16,839 for a Hermes Orange Togo Birkin, $127,073 for a 53-carat weight diamond necklace, $43,475 for private jet travel, $53,400 for special events passes at the Coachella Music and Arts festival, a Ferrari Portofino, a Bentley Bentayga, and $48,000 to cover the rent at a 6,500-square-foot property in Beverly Hills.
Sun said that his client is asking for a temporary restraining order against Holmes and Witt, out of concern that he's liquidating the ill-gotten assets.
"We have significant concerns that Holmes is dissipating the assets that he absconded with; namely the money he stole and is converting into certain types of items. And we have strong reason (to believe) he's liquidating those assets, turning them to cash, and then possibly moving them offshore and moving them in a way that would not be reachable to his creditors."
Shangri-La Industries is seeking damages greater than $20 million for money allegedly embezzled by the defendants, and an additional $20 million in damages because of financial exposure to third parties and lost business income because of the alleged theft.
Eyewitness News has been unable to reach either Holmes or Witt for comment. So far, court records indicate they have not filed an answer to the lawsuit.