Investors say Crystal Beach home developers not truthful about prior projects
GALVESTON - A group of investors have filed a lawsuit against Crystal Beach home developers claiming they were not given accurate information about the developers' previous projects.
Galveston County resident John Speich, Hardin County resident Joe Forkner and W & S Harkness Family Limited Partnership are suing KWT Custom Homes LLC and Crystal Beach locals Willis and Karon Turner in response to an alleged failed investment.
According to the complaint filed May 7 in Galveston County District Court, the Turners convinced the plaintiffs to put money into KWT, however, the investors did not receive a cent.
Speich and Forkner each purchased a 9.8 percent interest in KWT for the price of $25,000 each while the Harkness family bought a 30.40 percent interest for $12,500 in addition to a $200,000 loan which was to be paid back in monthly installments beginning on Nov. 1, 2009.
The Turners reportedly informed the investors that the goal was for all parties involve to "start with a clean slate" and had a target date of Oct. 1, 2009, to pay off all debt, adding any expenses and revenues generated after that date would belong to KWT and shared by its members.
According to the complainants, the Turners' representations and a financial statement supposedly indicating KWT's success in the year 2009 prompted them to buy a stake in the venture.
The plaintiffs eventually learned "that the defendants had not been forthcoming with the complete relevant details of the financial status and viability of KWT," the suit says.
The complaint points out that KWT began losing money immediately and the Turners used at least $50,000 of the investment funds for their own personal use.
A jury trial is requested.
Mills Shirley L.L.P. is representing the complainants, and Galveston County 56th District Court Judge Lonnie Cox is presiding over the case.
Case No. 12-cv-1183