A
tangled web of deceit has ensnared a group of local investors, who claim they were duped into pouring $10.3 million into a commercial medical property in South Jordan, Utah. The alleged scheme, orchestrated by real estate investment firms Millcreek Commercial Properties, Millrock Investment Fund, and Colliers International, promises to unravel in federal court.

    According to the lawsuit filed on October 14, 2024, 17 plaintiffs were lured into investing with promises of a passive, worry-free income stream. The anchor tenant, Neurogenex, was touted as "the nation's fastest growing healthcare brand," with a 20-year lease that would yield a 6.5% return annually.

    However, the complaint reveals a stark reality: Neurogenex never paid rent on the South Jordan property before filing for Chapter 11 bankruptcy in Arizona in January 2024. The initial payments to investors were not from rental income but rather from their original investments – a red flag that suggests the deal may have operated like a Ponzi scheme.

    Investors, including Liz Carlston and Lynn Kneedy, claim they unknowingly bought the property for $10.3 million when its market value was only $2.6 million at the time of the transaction. The lawsuit alleges that the firms continued to accept money even after it became clear that Neurogenex was heading toward bankruptcy – a decision that demonstrates deliberate deception.

    "We weren't in the business of leasing; we bought a passive investment," Carlston said, echoing the sentiments of other investors who feel betrayed by the firms' broken promises. The case is currently being litigated in federal court, with plaintiffs seeking to recover their full $10.3 million investment.