The legal issues surrounding DJE Texas Management Group continue to expand as Denver-based Platte Canyon Capital has filed a lawsuit against Devin Elder, the former head of the multifamily syndicator. The suit alleges fraud and breach of contract related to the July sale of Allure Apartments, a 268-unit complex located at 7770 Pipers Lane in San Antonio.
According to court records from Bexar County’s 37th Civil District Court, Platte is seeking more than $1 million in damages. The complaint claims that Elder took $52,000 in rent from the property after its sale. Platte asserts that Elder and his affiliates, including DJE Properties and 7770 Pipers LLC, misrepresented both the occupancy rate and financial condition of the building before the transaction.
The lawsuit states that DJE told Platte the property was over 90 percent leased with prospective tenants ready to fill remaining vacancies. However, after taking ownership, Platte discovered that many tenants were behind on rent or had stopped paying altogether. The company also alleges that DJE did not file any evictions or address these arrears prior to closing. Platte contends that actual occupancy was about 15 percent lower than what was represented by DJE.
Additionally, Platte accuses DJE of continuing to collect rent for two months following the sale via its online payment portal—an action said to violate the sales agreement—and alleges Elder has not returned those funds.
“Elder’s communications convey not refusal, but inability, to return what is in effect stolen rent,” wrote David Denton, attorney for Platte. “Platte construes the inability to pay to mean that the money is already disbursed and gone — especially given the backdrop of lawsuits, investigations and investor demands.”
The transaction was financed with an $18.2 million loan from Prime Finance Partners; other terms were not disclosed. Both Platte and its attorney declined comment on the matter. Elder, his legal counsel, and broker Newmark did not respond to requests for comment.
Since February—when investor communications ceased—DJE and Elder have faced increasing legal challenges. Multiple lawsuits from investors are pending while federal authorities investigate allegations including money laundering and wire fraud.
In August, federal investigators launched a criminal probe into DJE Texas Management Group after obtaining a warrant in June permitting seizure of DJE properties across six South Texas counties totaling over 1,000 acres.
