BY KATE CAGLE

A Southern California developer recently found to have committed of fraud and forgery will potentially face the scrutiny of City Hall concerning current and future projects in Santa Monica.

On Friday, a Los Angeles Superior Court Judge ruled local developer Neil Shekhter, founder and CEO of NMS Properties, committed a “broad variety” of fraud and forgeries, including providing a fabricated contract to the court, as well as destroyed evidence. The case surrounded a joint venture between NMS and hedge fund AEW and concerns seven properties in Santa Monica, one in Los Angeles and one in West Hollywood.

Because of the ruling, Shekhter will cede control of the nine properties. Judge Suzanne Bruguera also ruled NMS misappropriated funds when dealing with AEW and ordered NMS to pay AEW’s attorneys’ fees in the amount of $5,249,643 and suit costs totaling $784,284.

NMS currently manages more than 50 properties in Southern California with more scheduled for development.

In the wake of the ruling, Santa Monica City Councilmembers Kevin McKeown and Sue Himmelrich are urging city staff to look into all existing and pending agreements with Shekhter, NMS, and associated entities.

“The situation is very volatile and fast moving, and we do not have all the facts,” Himmelrich said.

Because of the ruling, residents living in the seven Santa Monica NMS buildings involved in the case now find themselves under new ownership.

“We need to know the actual facts involving many existing buildings as well as many pending developments to understand our situation with respect to NMS and Mr. Shekhter,” Himmelrich said.

Shekhter’s attorney, Skip Miller of Miller Barondess, LLP in Los Angeles, has already filed an appeal to the ruling. He defended his client in a statement to the Daily Press:

“Neil Shekhter didn’t forge anything. The order is wrong. All he did was discard his personal home computer to protect his and his family’s privacy,” Miller said.

“Mr. Shekhter has spent ten years of his life and millions from his own pocket developing these properties, and we’re not going to allow this East Coast hedge fund to take it all away based on this order.”

Attorneys for AEW did not respond to our request for comment.

In September of 2015, a judge ordered NMS to freeze all electronic documents and submit computers and devices to the court for forensic examination. Evidentiary hearings took place over eight days in October of this year. During the hearing, an expert from the National Institute of Justice examined a contract Shekhter claimed he received in 2010, but found it had actually been printed three years later.

The ruling raises questions for affordable living advocates, including the Santa Monica Coalition for a Livable City. The group claims there are currently 18 NMS projects pending in Santa Monica that have not yet been approved. The coalition is urging the city to immediately drop all projects and negotiations concerning those projects.

Discussion items are scheduled for the end of the regular calendar. Council will meet on Dec. 6 beginning at 4:30 p.m. in City Hall, 1685 Main St.

kate@www.smdp.com