Crew Enterprises, LLC — formerly Versity Investments — is defending a $56 million lawsuit in New York alleging that its top executives diverted investor money into unrelated real estate purchases and personal spending. The case, filed in April 2024 in New York Supreme Court, names CEO Blake Wettengel, COO Tanya Muro, and company founder Brian Nelson as individual defendants. In April 2026, a judge dismissed the fraud-related counts as duplicative but allowed the breach-of-contract and alter-ego claims to move forward. The core allegations remain unproven.
What the $56 Million Lawsuit Alleges
The case is KHCA Funding LLC v. Versity Invest, LLC, Index No. 651885/2024, in the Commercial Division of New York Supreme Court, New York County.1NY Courts. KHCA Funding LLC v. Versity Invest, LLC, 2026 NY Slip Op. 31536(U) The plaintiffs, KHCA Funding LLC and Knights Hill Ireland II DAC, are lenders that provided financing to Crew’s predecessor entities through a senior secured term loan facility. Knights Hill Ireland II DAC is managed by Crayhill Capital Management LP.2SEC. Senior Secured Term Loan Agreement
The complaint seeks $56,157,281 in damages plus injunctive relief.1NY Courts. KHCA Funding LLC v. Versity Invest, LLC, 2026 NY Slip Op. 31536(U) It alleges that Crew Enterprises, acting through Wettengel and Muro, diverted more than $56 million in proceeds raised from investors in Delaware Statutory Trust offerings. Instead of repaying the lenders as required, the funds were allegedly funneled into separate real estate deals and personal expenses.3Rights for Investors. Versity Investments LLC Now Known as Crew Enterprises Is Defending Lawsuit Seeking $56 Million The specific purchases identified in the pleadings include a $4.5 million home in San Juan Capistrano, California, and two neighboring hotels in Anaheim purchased for $20.6 million.4Iorio Law. Versity Crew Court Order – Fraud Claims Dismissed, Contract Claims Proceed
The original complaint carried eleven causes of action, including breach of contract, unjust enrichment, conversion, fraud, civil conspiracy, accounting, and injunctive relief. Beyond the three individual defendants, it named a network of related entities: Versity EquityCo, LLC; Versity EquityCo II, LLC; and several DST vehicles including Hayworth Tanglewood DST, Vintage DST, The Walk DST, and One on 4th DST.3Rights for Investors. Versity Investments LLC Now Known as Crew Enterprises Is Defending Lawsuit Seeking $56 Million
The April 2026 Ruling
On April 10, 2026, Justice Nancy M. Bannon granted the defendants’ motions to dismiss in part. She dismissed the fourth through eleventh causes of action, which covered fraud, unjust enrichment, conversion, civil conspiracy, accounting, and injunctive relief. The court found those claims overlapped with the breach-of-contract theory rather than arising from independent legal duties.1NY Courts. KHCA Funding LLC v. Versity Invest, LLC, 2026 NY Slip Op. 31536(U)
The first three causes of action survived: breach of contract and alter-ego claims against Crew Enterprises, Versity Investments, Wettengel, Muro, and Nelson. The court found that, at this stage, the complaint adequately alleged the individual defendants and Versity-related entities acted as alter egos of the borrower entities, Versity EquityCo and Versity EquityCo II.4Iorio Law. Versity Crew Court Order – Fraud Claims Dismissed, Contract Claims Proceed Defendants were ordered to file an answer within 30 days.1NY Courts. KHCA Funding LLC v. Versity Invest, LLC, 2026 NY Slip Op. 31536(U)
One point worth being precise about. The court did not find that fraud occurred. It found that the fraud claims, as pleaded, duplicated the contract claims and should be resolved on that theory. The underlying allegations of misappropriation remain unproven.
Other Active Cases Against the Company
Hayworth Tanglewood DST in Delaware
A separate case, Hayworth Tanglewood IB, LLC v. Hayworth Tanglewood, DST, et al., is pending in the Delaware Court of Chancery. The plaintiff has been managed by its bridge lender since June 30, 2025.5InvestmentNews. Delaware Trustee Accused of Diverting Funds in $58 Million Real Estate Deal The complaint alleges DST trustees failed to redeem ownership interests after selling more than $37 million in beneficial interests to outside investors, and that roughly $20.1 million in proceeds were diverted to a bridge lender instead of being used to redeem the plaintiff’s interest.6White Securities Law. Hayworth Tanglewood DST Investment Investigation On January 15, 2026, Senior Magistrate in Chancery Selena E. Molina denied the defendants’ motion to dismiss, and discovery resumed in February 2026.
A $47 Million Judgment
On July 17, 2025, Crew Enterprises was reportedly hit with a separate $47 million judgment for breaching its obligations to a lender.7Soreide Law Group. Did Your Broker Recommend Versity Investments LLC / Crew Enterprises LLC? The court, lender, and case details have not been publicly detailed in available records.
The Buckingham Foreclosure in Chicago
In March 2026, Wells Fargo and Midland, a special servicer owned by PNC Bank, filed a foreclosure action in Cook County against Versity affiliates over The Buckingham, a 20-story, 440-unit apartment tower at 59 East Van Buren Street in the Loop.8The Real Deal. Midland Foreclosing on Troubled Loop Landlord Versity’s Site The original $45.3 million loan dated to 2018, and the outstanding balance had climbed to $45.7 million by late 2025, including over $1 million in accrued interest and default fees. Occupancy had fallen from 94% in December 2024 to 79% by June 2025. A prior 2020 foreclosure was dismissed after a 2021 forbearance agreement, which the landlord allegedly breached by missing payments in summer 2025. As of June 2026, the foreclosure remains active.9The Real Deal. Cook County Foreclosure Map for March and April 2026
An Internal Dispute Over Control
On July 28, 2025, founder Brian Nelson sued Crew Enterprises in Orange County Superior Court, seeking to enforce an arbitrator’s June 2025 order granting him exclusive financial control over bank accounts tied to Nelson Brothers Professional Real Estate, LLC and Versity Investments, LLC. Nelson alleged the defendants were draining funds in violation of that order. Nelson voluntarily dismissed the case without prejudice on October 27, 2025.10UniCourt. Brian Nelson v. Crew Enterprises, LLC, et al.
What It Means for Investors
Investors in Crew Enterprises products are facing financial fallout across multiple offerings. Monthly interest payments on Versity Income Property Notes — unsecured 24-month instruments paying 8% annual interest — stopped in April 2025, and those notes are now characterized as being in default.11Iorio Law. Versity Income Property VIP Notes Default Recovery At least one investor has reported that the company stopped returning communications about the notes.3Rights for Investors. Versity Investments LLC Now Known as Crew Enterprises Is Defending Lawsuit Seeking $56 Million
The Hayworth Tanglewood DST, which raised approximately $76.8 million in equity for the 2022 acquisition of a $105.5 million Houston apartment complex, has suspended distributions to investors. The stated reasons include declining occupancy and cash flow distress, though the pending Delaware case alleges investor proceeds were diverted and commingled with other property funds. Market reports from 2025 suggest the property’s value has fallen below its acquisition price.12Iorio Law. Hayworth Tanglewood DST Investigation
These are private placements, so the investments are illiquid by design. Investors cannot sell their positions on an open market. Most recovery efforts are proceeding through individual FINRA arbitration claims against the broker-dealers who recommended the products, rather than through class action lawsuits.6White Securities Law. Hayworth Tanglewood DST Investment Investigation Those claims generally focus on whether the selling firms performed adequate due diligence, complied with Regulation Best Interest, and disclosed the principals’ prior litigation history before recommending the products.12Iorio Law. Hayworth Tanglewood DST Investigation At least one FINRA arbitration has been filed against Emerson Equity and its control person, Dominic Baldini, on behalf of a San Diego retiree who invested in Nelson Brothers Student Housing Fund III.13Investor Lawyers. Private Placement Loss Attorneys
Where Things Stand
As of mid-2026, the New York case continues on the breach-of-contract and alter-ego claims after the fraud counts were dismissed as duplicative. The Delaware Chancery case over Hayworth Tanglewood is in discovery. The Buckingham foreclosure in Chicago remains unresolved. Individual investors are pursuing FINRA arbitration against the broker-dealers who sold them the products. No court has made a final determination on the misappropriation allegations, and all claims remain unproven pending further proceedings.