‘Principal of a real property broker arrested, deported’

U.S. Immigration officials have deported the principal of a company engaged in buying and selling real property on Saipan, disrupting its business operations, according to court documents.

American CM Real Estate Development Co. and its agent, Xuemei Yu, are also being sued for allegedly refusing to return $760,000 in deposits over failed transactions on two properties, including one in Capital Hill owned by Sen. Paul A. Manglona (Ind-Rota).

The name of the American CM’s principal was not shown in court papers, but he was said to have been deported to Canada.

Shangrui Investment Development Co. Ltd., through counsel Tiberius D. Mocanu, is suing American CM Real Estate Development Co. and Yu before the Superior Court.

According to Mocanu, American CM approaches potential sellers and offers them a set amount for their property.

If the seller agrees, American CM then enters into an agreement to lease/assign with the seller. Mocanu said the closing date is usually scheduled around 180 days from the signing of the agreement.

American CM then searches for a buyer for the same property.

Mocanu said that on April 27, 2017, American CM entered into an agreement with Manglona, the fee-simple owner of a property on Capital Hill, for the purchase of the property for $418,100, with closing to occur on or before Oct. 27, 2017.

Mocanu said the agreement was recorded on June 8, 2017.

On April 28—a day after entering into the agreement with the senator—Mocanu said that American CM, through Yu, entered into an “Assignment of Ground Lease” with Shangrui Investment for the purchase of the same property for $522,625.

That same day, Shangrui paid American CM and Yu $100,000 as a deposit for the purchase of the Capital Hill property.

Mocanu said that American CM purported to assign all of its rights and interests in a “nonexistent lease” to the Capitol Hill property to Shangrui. At the time, American CM represented to Shangrui that it had good title to the property, the lawyer said.

Mocanu said Shangrui was unaware that American CM did not in fact have the title to the property.

In the case of the second property, Mocanu said American CM, through Yu, entered into an agreement with Shangrui regarding a piece of land in Tanapag on May 31, 2017.

The Tanapag agreement stated a purchase price of $1.7 million and a closing date within 180 days of the signing of the agreement.

On June 19, some 20 days after entering into the agreement to lease, Mocanu said, American CM entered into an agreement to assign lease with the owner of the Tanapag property, Villora Condotel Residence LLC.

American CM allegedly agreed to purchase the Tanapag property from Villora for $1.5 million, with a closing within 180 days from the signing to the agreement.

Shangrui allegedly paid American CM $660,000 as a deposit for the purchase of the Tanapag property.

The Tanapag property was scheduled to close on Nov. 27, 2017, but the counsel for American CM informed Shangrui that closing will not happen that day.

As of the filing of the complaint, Mocanu said, American CM has failed to deliver the assignment to lease to Shangrui.

He said Shangrui requested the return of its $660,000 deposit, but defendants have not returned the money.

Mocanu said American CM, well knowing that it did not have leasehold rights or interest in the Capital Hill and Tanapag properties, fraudulently misrepresented that it had an interest in the properties when it executed the agreements to lease with Shangrui.

Mocanu said American CM’s purpose is to cheat and defraud Shangrui.

Hongzhou Yu is listed as the main shareholder of Shangrui, while Dong Jiang is its manager.

In Xuemei Yu’s answer, Yu said that American CM and Shangrui entered into several successful transactions.

Yu said when legislation was enacted preventing employers from obtaining CW-1 visas for construction workers, Shangrui’s CW-1 petitions for dozens of construction workers were denied.

Yu said Shangrui then became concerned about the value of real property on Saipan and its ability to develop real property.

She said Shangrui decided to exit the Saipan market.

Yu said Shangrai then began trying to sell its property holdings and trying to get out of deals it had agreed to.

Coincidentally, Yu said, the principal of American CM was arrested by U.S. Immigration officials, removed to Guam, and then deported.

She said this disrupted American CM’s operations.

Yu said she was an agent of American CM and did not receive money from Shangrui and did not misrepresent anything to to Shangrui.

“I believe Shangrui, a sophisticated and resourceful player in the real estate market, is simply looking to cover a loss, and does not care if its allegations are false,” Yu said.

She said Shangrui knew and was expressly told by American CM that American CM did not have title to the properties.

Yu admitted that most of the $660,000 and $100,000 initial payments to American CM had been used by American CM as its operating expenses.

Yu said she believes American CM expected to have the necessary operating funds for closing the Tanapag property by Nov. 27, 2017.

However, she said, U.S. Immigration and Customs Enforcement arrested the principal of American CM for overstaying his visa in September 2017.

Yu said the principal was subsequently deported to Canada.

“This greatly disrupted American CM’s operations,” she said.

Mocanu requested the court last Jan. 23 for an initial case management conference and mediation assessment hearing in this case.

Superior Court Associate Judge Wesley Bogdan set the case management conference and mediation assessment hearing for March 27 at 9am.