The ruling by U.S. bankruptcy court judge Christopher Sontchi on Tuesday is the latest in a series of scathing decisions in which the judge called Urban Commons executives Taylor Woods and Howard Wu “fraudsters” for allegedly taking the law. leaked with $ 2.4 million in Paycheck Protection Program (P3) loans to help Queen Mary employees during the pandemic.
The judge found Woods and Wu in contempt for failing to follow orders to account for the money and even threatened to take them into custody. In the latest tactic to get the couple to comply, the judge said Woods and Wu will now be fined $ 250 a day starting Jan. 1, until they can find the funds or deliver. an accurate account of their personal finances and how the loan money was spent.
Accounting so far, the judge said, has been “woefully inadequate and full of fraudulent inconsistencies.
“One would have thought that the issuance of the contempt order and the sanction order would serve to convey to Mr. Woods and Mr. Wu that further fraudulent behavior would not be tolerated by the Court and that it was time to make a full and straightforward accounting statement, “Sontchi wrote.” Obviously, the defendants did not get the message.
Woods, Wu and their company, Los Angeles-based real estate investment company Urban Commons, have faced a litany of lawsuits and debt since taking over as operators of the Queen Mary in 2015. Urban Commons declared bankruptcy earlier this year and abandoned the Queen Mary Bail, giving control of the ship to the city of Long Beach.
Woods and Wu both said in a hearing last month that they were in debt and unable to repay the $ 2.4 million in federal loans. But the judge in his ruling said he was skeptical, noting incomplete bank statements for Wu and “opaque” information from Woods.
The judge said Wu previously said his wife paid the couple’s living expenses from her bank account, but Wu later provided information from a not identified Bank account used for living expenses and other costs.
“In his statement, Mr. Wu claims that he ‘overlooked’ this account when testifying at the penalty hearing,” the judge wrote. “It’s not believable.”
The judge said Woods further failed to provide any information regarding additional checking accounts in his name, although he said he would provide such information at a previous hearing.
Urban Commons attributed their problems to the pandemic, but lawsuits and public records show their financial troubles had started at least one year before pandemic closures devastated the hospitality and tourism industries.
In addition to several fraud lawsuits, Woods and Wu in bankruptcy court were charged with obtaining a PPP loan on behalf of their former company, Urban Commons Queensway, without consent, leaving the company obligated to repay the federal government. .
Woods said he made a clerical error due to a confusion between two different employee salaries and did not realize he was asking for the loan money as d ‘Urban Commons Queensway.
The judge said, however, that he did not find this explanation credible.
Under the order, the fine of $ 250 per day will be paid within five days at the end of each month.