The Wall Street Journal: Anbang discovers fake deeds as it moves to sell U.S. hotels for $5.8 billion

A Chinese insurer has agreed to sell a luxury hotel portfolio for more than $5.8 billion, overcoming an unusual stumbling block: A California individual secretly created a series of fake deeds to transfer ownership for up to a half-dozen of the hotels.

Mirae Asset Global Investments, part of a South Korean financial-services company, agreed this week to buy the 15-hotel portfolio from Anbang Insurance Group Co., say people familiar with the matter. Mirae prevailed in a process that began early this year and attracted widespread interest from private-equity funds and government-run funds, these people said.

The two sides were on the verge of a deal last month, but a more formal agreement was held up when Anbang discovered the fraudulent deed transactions while performing a routine title search, according to people familiar with the matter. The search indicated that ownership of at least four California hotels had been transferred to limited liability companies.

One deed showed a transfer of ownership for Anbang’s Montage Laguna Beach hotel, a luxury coastal resort in Southern California, to a company known as Andy Bang LLC, according to California property records. San Francisco’s Westin St. Francis, the Loews Santa Monica and the Four Seasons Silicon Valley in East Palo Alto were also transferred to limited liability companies, though no sales prices were recorded, according to property records. Deeds for the Ritz-Carlton hotels in Half Moon Bay and in Laguna Niguel were also faked, said people familiar with the matter.

These fraudulent transfers occurred without Anbang’s knowledge or approval, say people familiar with the matter.

An expanded version of this report appears on WSJ.com.

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