Investors Accuse First National Realty Partners Of Fraud In $9.5M Suit

A group of investors, including individuals, investment LLCs, and family trusts, are suing the commercial real estate firm First National Realty Partners (FNRP) in a multi-million-dollar RICO and fraud lawsuit.

Filed in federal court in New Jersey on July 17, 2026, the investors claim that FNRP, along with two affiliated firms, First National Realty Advisors and First National Property Management, conducted fraudulent investment schemes that cost them more than $9.5 million.

The lawsuit alleges that FNRP told investors that it purchased commercial properties, primarily shopping centers, at or below market value, and paid dividends to investors of 6% per year. In the suit, the company claimed in its marketing materials it bought properties “that can be acquired at perceived discounts to both market value and replacement cost.”

The company actually operated in an opposing fashion. Instead of the stated discounts, the company bought the properties at or above market value, marked up the values, sold those shares at the higher value, then charged investors fees tied to that higher value. As evidence for this premise, the plaintiffs included an outside expert report that determines that the firm “is not buying these properties at below market prices as it claims,” but “buys a property at or above market and shaves more than half of the returns for itself.”

The plan’s structure is also in question, arranged so that the investors could not remove FNRP from the plan. FNRP had three roles in every deal: asset manager, sole realtor on tenant-leasing deals, and manager of the investment LLCs. The lawsuit referred to this as the “Golden Ticket” and “a textbook conflict-of-interest.” These roles allowed money to backflow to the companies controlled by the sponsors, including property-management fees, leasing commissions, and billings from an in-house construction arm the filing says was created “under the guise of being separate.” 

The lawsuit describes the discrepancies in detail on three of the deals involved:

1. For the Tropicana Center deal, plaintiffs claim the property was bought for $71.929 million. The firm then escrowed $82.424 million, leaving a gap of roughly $10.5 million.
2. For a Summerdale Plaza property, investors were told in February 2025 that it sold at about a 60 percent loss.
3. In the Maple Park lease with retailer Five Below, the filing alleges leasing costs of $1,071,380 on a lease “valued only at $2,286,284 over 10 years.”

The lawsuit also claims that these investments were sold as private placements by unregistered individuals. The salespeople selling these placements were paid by transaction, but did not have proper SEC licensing, which violates SEC Regulation D. This should have, but did not, trigger FINRA and state registrations that the firm never obtained. Additionally, the suit describes a second complaint in which a former FNRP executive allegedly pointed out that the company’s marketing materials may not be in compliance with SEC rules.

The case includes 27 counts, including fraud, violations of securities laws across over a dozen states, and civil racketeering under both federal RICO and New Jersey’s Racketeering Act. The investors are asking the court to undo their investments, require the company into disgorgement to return losses, and award treble damages.

Currently, the case is working its way through the federal court system, although no judge or jury has ruled on these allegations yet. The company and individuals involved have stated that they would fight the allegations in court.

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