A lawsuit alleges that the owners of a popular Los Angeles restaurant used millions in investor money to bankroll a flashy lifestyle that included flying out OnlyFans models, buying luxury homes and cars, and traveling the world. An attorney for the accused parties, however, has denied the claims.
According to court documents reviewed by the New York Post, investors allege that Tosh Berman, Michael Tanha and Mahdiar Karamooz diverted cash from Casa Madera at the Mondrian Los Angeles Hotel and related restaurants in Arizona, Nevada and Florida, leaving the investor-backed businesses short on working capital.
According to the complaint, the investors allege that the owners engaged in a coordinated scheme to defraud them.
“This control group has intentionally and systematically defrauded MGI, MGH, and the other members of these LLCs through a complex fraudulent design which, among other schemes, siphoned to themselves substantial revenues and financial benefits realized through operating various restaurant establishments while foisting the costs and expenses incurred to generate such revenues upon the restaurants themselves and, ultimately, investors in those restaurants," reads an excerpt from the suit.
The lawsuit also claims Berman and Tanha spent investor funds on airfare for OnlyFans models and other women to attend openings, a $5 million Miami home, an Aspen ranch, and luxury vehicles including a white Ferrari and a Maybach SUV, as well as lengthy trips to Europe, Australia, Dubai and elsewhere.
Karamooz is accused of falsifying financial records to conceal the spending once he was made aware of it.
The investors allege the men pocketed $3 million from inKind, a company that pays restaurants to promote discounted offers, rather than using the money to cover losses from those credits and leaving investors to absorb the hit.
Additional claims include misrepresenting the fees earned from renting out Toca Madera Las Vegas for Super Bowls LVII and LVIII.
For the first event, the restaurant allegedly brought in $1.3 million, but investors were told only $600,000 was received and allowed the owners to keep the difference. A similar arrangement is alleged for the February 2024 Super Bowl, though the amount kept was not disclosed.
When investors sought detailed financial records in May 2024, they say they did not hear back within the allotted 10 days.
After a follow-up request in June 2024, the Toca Madera Scottsdale entity sued the investor groups, accusing some investors of improperly transferring shares, a claim the investors deny.
The Scottsdale restaurant later produced some documents to "placate" the investors, but they say the disclosures were incomplete, leading to continued disputes and ultimately the lawsuit filed last week.
The investors are bringing claims that include securities fraud and racketeering under RICO, and they are seeking damages potentially totaling millions of dollars, attorneys' fees, and a trust over the defendants' assets.
“These are ridiculous claims, asserted by a single small investor—Scott Jackson of Endeavoring Capital,” Brian Timmons of Quinn Emanuel—an attorney for Tosh Berman, Michael Tanha and Mahdiar Karamooz—said in a statement shared with Complex. “He brought these claims in desperate retaliation after being sued by the company for violating his contractual obligations, and after our clients refused his threats to tarnish their reputations unless they paid him an exorbitant sum. The suit is meritless and we will address it through the appropriate legal process.”