Michael Stern Faces New Fraud Claim As His Lawyer Quits Defamation Suit
Michael Stern, the developer of the world's skinniest skyscraper, has been hit with a lawsuit from a partner in a Miami Beach development who claims to have been defrauded.
It's the latest legal drama for the founder of JDS Development, who is pursuing a defamation suit against a John Doe who created a website that tracks fraud allegations against Stern at other projects. Stern has been seeking to unmask the creator of the online “smear campaign," but this month, an attorney representing him in the case withdrew.
An entity controlled by Italian entrepreneur Gianluca Vacchi, GV NBV LLC, filed the fraud suit in December against Stern and two entities tied to him, claiming the developer “executed a scheme” to gain a $2.5M investment in a development on Collins Avenue.
The lawsuit, which was stayed in January but remains open, claims Stern faked or improperly modified documents and hid facts about the project: a condo-hotel development that would replace the Casablanca condo building at 6345 Collins Ave. in North Beach.
“Stern’s conduct was not accidental — it was intentional, systematic and designed to strip Plaintiff of its right while enriching Stern at Plaintiff’s expense,” Vacchi's attorneys wrote in the suit.
Stern declined to comment. Vacchi is being represented by Giller P.A.'s Jason Giller, who declined to comment, and Boies Schiller Flexner LLP's Bruce Weil, who didn't respond to a request for comment.
The two originally partnered on Stern's $4B pipeline of South Florida condo projects, The Real Deal reported in October 2024.
“Let’s see what I invent,” Vacchi told TRD at the time. “I’m not very conventional, and so I’ll try to do my best to give these buildings my unconventionality.”
Vacchi has equity in JDS' 67-story, 791-condo mixed-use Mercedes-Benz tower and the Dolce & Gabbana Residences at 888 Brickell Ave., TRD reported.
The pair also partnered on the 1250 West Ave. project proposed in Miami Beach, where Stern tapped Terra Group, led by David Martin, to complete the $120M condo buyout and redevelopment of the property in September.
But now, Vacchi is claiming Stern got him to invest $2M in spring 2024 for the planned redevelopment of Casablanca, intended to be a “quick flip” and a “no lose” deal, the lawsuit states.
Stern allegedly provided GV NBV with a third-party valuation on the land where the Casablanca project was located, which showed it was valued between $210M and $276M. To acquire the land, the suit claims Stern represented it would only cost $150M — making for a substantial investment. Following that, Vacchi’s entity invested an additional $500K.
GV NBV also alleges Stern refused to provide membership or any other document that confirmed the company's membership interest.
A source close to the matter told Bisnow a buyout of Vacchi's stake in the projects is being negotiated.
The lawsuit referenced Silverstein Properties seizing control of Brooklyn's tallest building from JDS, which developed it, in a $672M deal after Stern defaulted on its mezzanine debt. Stern allegedly claimed he was looking for short-term liquidity as other projects materialized, including the Brooklyn Tower.
The suit also mentioned past drama tied to the developer, citing information from JDSPulse.com, a website and affiliated social media accounts controlled by an unknown entity.
Stern sued the anonymous operator of the site in April in an attempt to unmask the person behind the accounts, which, at the time of the filing, were removed or inactive.
Since then, the website is back online, with heavily couched language saying it is highlighting lawsuits and “reported challenges and controversies associated” with Stern and his projects. It also includes several disclaimers, noting “all such claims remain subject to judicial review and have not been conclusively proven.”
Stern's attorneys filed a notice of intent in May to subpoena documents from Google, RosettiStarr and Namecheap to unmask the website's owner, according to court records. The docket was then silent for months.
But in December, Stearns Weaver Miller attorneys Grace Mead and Joseph Onorati, who represented Stern in the case, withdrew due to “irreconcilable differences” after the developer's “failure to comply with the terms of engagement,” they wrote in the filing in Miami-Dade County Circuit Court.
The attorneys also pointed out that Stern had not made progress identifying the John Doe, “so there is not yet a named defendant or any opposing counsel representing any defendant.”
Clare Locke LLP shareholders Thomas Clare, David Sillers and Jon Kaiman remain involved in the case, according to the filing, though Sillers announced on Tuesday he joined a new law firm, Hilgers PLLC, according to his LinkedIn profile.
Stearns Weaver Miller and Stern declined to comment on the matter.
