The former chief operating officer of Northstar Commercial Partners provided information about an alleged kickback scheme to Amazon, according to a revised version of a lawsuit that the retail giant filed against Denver-based Northstar.
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The suit now stipulates that ex-COO Timothy Lorman was one of two sources providing information about possible data center project misdeeds, BusinessDen reports. Lorman worked at Northstar from early 2019 until April of this year, when he and a number of other executives at the company resigned.
In its suit, which was filed in the spring but only recently unsealed, Amazon alleges that Northstar paid two Amazon employees to select Northstar to develop data centers in Virginia for the retailer, and that Northstar CEO Brian Watson himself was involved. Amazon has since fired both individuals.
"We believe the case is based on a misunderstanding of routine arrangements between parties in commercial real estate deals, as well as inaccurate information that has apparently been given to Amazon," Brownstein Hyatt Farber Schreck Shareholder Stanley Garnett told Bisnow. "Brian absolutely denies doing anything improper."
Amazon seems to believe certain payments were kickbacks, but they actually appropriate fees and other payments associated with a commercial real estate transaction, said Garnett, whose firm represents Watson and Northstar.
Watson founded Northstar in 2000. Among other lines of business, it has specialized in value-add acquisition and redevelopment. In 2018, Watson narrowly lost in a run for Colorado state treasurer as a Republican.
The properties allegedly involved in the kickback scheme are in Loudoun and Prince William County, Virginia. Amazon says it spent $415M on buying or leasing the nine sites, Data Center Dynamics reports.
In April, the FBI searched the home of Watson, taking his cellphone and computer. In an email to family and colleagues obtained by the Denver Post, Watson said that FBI agents told him the investigation was connected to his company's development of Amazon data centers, including fraud and misappropriation of funds. Watson denied any wrongdoing in the email.
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