3280 S. Wadsworth Blvd. is a 10,000-square-foot building that houses an urgent care facility. (Justin Wingerter/BusinessDen)
A Denver developer is accusing his former business associate of running his company “into the ground,” embezzling $570,000 and handing out fraudulent loans to himself.
Jeff Oberg, who in recent years has sold the former Royal Palace Motel and a block in RiNo for significant profits, is leveling the accusations against John Callahan, a Texas developer with “significant real estate holdings in Colorado,” according to Oberg’s Aug. 8 lawsuit.
In 2001, Callahan was hired to manage a new real estate company that was designed to benefit Oberg’s children’s trust, “based on Callahan’s promise that he would invest La Biela LLC’s real estate assets and grow” it, according to Oberg’s lawsuit in Denver District Court.
“Callahan, instead, systematically depleted La Biela’s investments and cash by, among other things, siphoning cash through unapproved exorbitant management fees and making below-market-rate loans to himself and his friends,” Oberg is alleging now.
His lawsuit is one of two cases that have emerged from the breakdown of Callahan and Oberg’s business relationship last December. In the other case, it is Callahan suing Oberg. At the center of both cases is a piece of property along Wadsworth Boulevard in Lakewood.
In Callahan’s telling, he ably managed La Biela for 22 years — buying and selling its real estate, distributing its profits, paying its taxes — until the last days of 2023. That’s when Oberg created a new company, La Bielsa LLC, went to a bank in Dallas, tried to move La Biela’s money to La Bielsa, and was denied because only Callahan’s name was on the account.
Callahan’s recollection is that he resigned as the manager of La Biela two weeks later.
Oberg claims that Callahan was fired. And he has his own banking story.
As Oberg tells it, he removed Callahan as manager of La Biela after his accountant told him that Callahan had been loaning La Biela’s money to a company that Callahan owns. Oberg then went to a bank branch in Greenwood Village, where he learned that Callahan had stolen $570,000 from La Biela in three wire transfers that September and November.
After that, Oberg “demanded that Callahan return the funds that he stole and provide an accounting for a series of suspicious transactions he authorized while he was the manager of La Biela,” according to Oberg’s lawsuit this month. “Callahan has refused.”
Oberg said that he uncovered nearly $550,000 in loans from La Biela to Callahan, Callahan’s son, Callahan’s real estate company, Callahan’s lawyer and Callahan’s tree farm. There is no documentation for those loans, some of which have not been repaid, Oberg alleges.
Callahan, meanwhile, claims that $570,000 wasn’t embezzled — it was a purchase price. In September, while he was still managing La Biela, Callahan sold his company’s stake in a property on the corner of Wadsworth and Girton Avenue to La Biela for $570,000.
“Oberg has raised objections to this transaction even though the 25-percent interest in Wadsworth & Girton LLC was worth at least $570,000,” he wrote in an April lawsuit.
Oberg, on the other hand, said that when he confronted Callahan over the embezzled $570,000, “which effectively emptied La Biela’s bank account” in December, Callahan then created and post-dated a purchase agreement for the Wadsworth property, “solely for the benefit of…covering up his theft of $570,000 from La Biela and its members.”
Wadsworth & Girton LLC partly owns a 10,000-square-foot building on the northeast corner that houses an urgent care facility. Jefferson County values the property at $4 million.
Callahan sued Oberg in a Texas court this spring and asked a judge there to affirm the $570,000 sale was legal. Instead, in July, the judge dismissed the case, finding that it should be decided in Colorado rather than Texas. Callahan is appealing that decision to a higher court.
Oberg sued Callahan in Denver District Court and is asking a jury here to award him $3.4 million, or three times the amount he accuses Callahan of stealing from La Biela. He also wants Judge Mark Bailey to rescind the sale agreement with Wadsworth & Girton LLC.
Oberg is represented by Christopher Dawes and Michael Rudd in the Denver office of Fox Rothschild. They didn’t answer requests for comment on their client’s cases.
Callahan is represented by Matthew Swantner and Bailey Tulloch in the San Antonio office of Jackson Walker. They also did not answer requests for comment on the cases.
3280 S. Wadsworth Blvd. is a 10,000-square-foot building that houses an urgent care facility. (Justin Wingerter/BusinessDen)
A Denver developer is accusing his former business associate of running his company “into the ground,” embezzling $570,000 and handing out fraudulent loans to himself.
Jeff Oberg, who in recent years has sold the former Royal Palace Motel and a block in RiNo for significant profits, is leveling the accusations against John Callahan, a Texas developer with “significant real estate holdings in Colorado,” according to Oberg’s Aug. 8 lawsuit.
In 2001, Callahan was hired to manage a new real estate company that was designed to benefit Oberg’s children’s trust, “based on Callahan’s promise that he would invest La Biela LLC’s real estate assets and grow” it, according to Oberg’s lawsuit in Denver District Court.
“Callahan, instead, systematically depleted La Biela’s investments and cash by, among other things, siphoning cash through unapproved exorbitant management fees and making below-market-rate loans to himself and his friends,” Oberg is alleging now.
His lawsuit is one of two cases that have emerged from the breakdown of Callahan and Oberg’s business relationship last December. In the other case, it is Callahan suing Oberg. At the center of both cases is a piece of property along Wadsworth Boulevard in Lakewood.
In Callahan’s telling, he ably managed La Biela for 22 years — buying and selling its real estate, distributing its profits, paying its taxes — until the last days of 2023. That’s when Oberg created a new company, La Bielsa LLC, went to a bank in Dallas, tried to move La Biela’s money to La Bielsa, and was denied because only Callahan’s name was on the account.
Callahan’s recollection is that he resigned as the manager of La Biela two weeks later.
Oberg claims that Callahan was fired. And he has his own banking story.
As Oberg tells it, he removed Callahan as manager of La Biela after his accountant told him that Callahan had been loaning La Biela’s money to a company that Callahan owns. Oberg then went to a bank branch in Greenwood Village, where he learned that Callahan had stolen $570,000 from La Biela in three wire transfers that September and November.
After that, Oberg “demanded that Callahan return the funds that he stole and provide an accounting for a series of suspicious transactions he authorized while he was the manager of La Biela,” according to Oberg’s lawsuit this month. “Callahan has refused.”
Oberg said that he uncovered nearly $550,000 in loans from La Biela to Callahan, Callahan’s son, Callahan’s real estate company, Callahan’s lawyer and Callahan’s tree farm. There is no documentation for those loans, some of which have not been repaid, Oberg alleges.
Callahan, meanwhile, claims that $570,000 wasn’t embezzled — it was a purchase price. In September, while he was still managing La Biela, Callahan sold his company’s stake in a property on the corner of Wadsworth and Girton Avenue to La Biela for $570,000.
“Oberg has raised objections to this transaction even though the 25-percent interest in Wadsworth & Girton LLC was worth at least $570,000,” he wrote in an April lawsuit.
Oberg, on the other hand, said that when he confronted Callahan over the embezzled $570,000, “which effectively emptied La Biela’s bank account” in December, Callahan then created and post-dated a purchase agreement for the Wadsworth property, “solely for the benefit of…covering up his theft of $570,000 from La Biela and its members.”
Wadsworth & Girton LLC partly owns a 10,000-square-foot building on the northeast corner that houses an urgent care facility. Jefferson County values the property at $4 million.
Callahan sued Oberg in a Texas court this spring and asked a judge there to affirm the $570,000 sale was legal. Instead, in July, the judge dismissed the case, finding that it should be decided in Colorado rather than Texas. Callahan is appealing that decision to a higher court.
Oberg sued Callahan in Denver District Court and is asking a jury here to award him $3.4 million, or three times the amount he accuses Callahan of stealing from La Biela. He also wants Judge Mark Bailey to rescind the sale agreement with Wadsworth & Girton LLC.
Oberg is represented by Christopher Dawes and Michael Rudd in the Denver office of Fox Rothschild. They didn’t answer requests for comment on their client’s cases.
Callahan is represented by Matthew Swantner and Bailey Tulloch in the San Antonio office of Jackson Walker. They also did not answer requests for comment on the cases.
