Lawsuit accuses Hyatt Place developer of diverting more than $1 million to Carmon's event center
A lawsuit alleges that a Hyatt Place developer diverted over $1 million from the hotel project to his event center, Carmon's.Summary
Carlos Nieto has filed a lawsuit against Hans Grotelueschen, the developer of the Hyatt Place Champaign/Urbana, accusing him of diverting more than $1 million from the hotel project to Carmon’s Event Center. Nieto claims he invested $3.63 million in the hotel based on Grotelueschen’s financial guidance and discovered the funds were secretly transferred to Carmon’s in 2020. The lawsuit details how Grotelueschen concealed the transactions, leading to the hotel’s financial difficulties, eventual foreclosure, and Nieto’s loss of investment.
Grotelueschen reportedly used hotel funds to support Carmon’s, which also faced financial issues and foreclosure, and continued to accept event deposits despite the precarious situation, causing distress to customers. A separate lawsuit by Grotelueschen’s stepmother also alleges misappropriation of funds, suggesting a pattern of fraudulent behavior.
Nieto is seeking damages exceeding $10 million, including a tripling of his $250,000 loan and lost equity, as well as a full accounting of the misused funds. The Hyatt Place was sold in December 2024 for $18.25 million, but Nieto’s investment was rendered worthless due to the alleged diversion of funds.
(Source：News-gazette)