Investors Allege Losing Millions through Patrick McKenna’s Companies

The home at Bella Oceana Vista was purchased by Palisades Funding for $6,050,000. The home sold for $15,601,500 in 2018. Investors said they didn’t receive promised monies.

“It is remarkable to me how a person can steal millions of dollars, yet most members of our community will not seek legal redress,” Palisades resident Karl Taro Greenfeld told Circling the News.

The cost of litigation, which could stretch on several years, with no way to recoup the money even if the results was favorable, was a reason given by many.

It is alleged by at least nine people that Patrick McKenna has taken hundreds of thousands of investment dollars from Pacific Palisades residents starting in 2017. The total money may exceed $20 million, and investors say they don’t know where it has gone. At least three lawsuits have been filed.

McKenna was called about the allegations and told CTN on March 13, “There were a lot of good projects, and some were affected by the extended Covid shutdowns then the Palisades Fire.

“When people invested, they knew the potential benefits as well as the risks,” McKenna said. “That occurs whenever there are real estate investments.”

One investor noted “that three lawsuits were filed years before the Palisades Fire and that by  the time of the Fire none of McKenna’s projects or LLCs were even active anymore.”

Residents invested with one of several groups under McKenna’s management. Those groups include Palisades Funding, Inc, Palisades Capital Management, LLC, Palisades Development Company, Inc.; Pali Cap Management 9, LLC, Palisades Capital Fund 4, LLC, Palisades Capital Fund 8, and LLC, Palisades Capital Fund 7, LLC.

Covid closed everything including courts. The Palisades Fire has left people not only without investments, but without homes, too. And there’s no guarantee that even if investors prevail in court they’ll recover any of the lost funds from McKenna.

Initially, investors were introduced to McKenna by people whom they knew and trusted when he relocated to Pacific Palisades from  Orange County. He met Eric Knight a long-time resident, the son of Ted Knight, who was prominent in the community, respected and well-liked. Knight introduced him to different people.

After a while, Knight learned that the developer wasn’t paying back the promised returns on investments. “People trusted him,” Knight said. “If I had known . . . this is just a disgusting story of taking advantage of Palisadians.”

Lee Helper was one of those who Knight introduced to McKenna around 2017.  Helper promised 8% on his initial investment ($200,000) and an additional 6.7 % of the revenue after the completion and sale of 1362 Bella Oceana Vista (the Chris Pratt home). The home was purchased by Palisades Funding for $6,050,000. The home sold for $15,601,500 in 2018.

Even though Helper should have received more than $1.8 million from his investment in this real estate deal, he received nothing from McKenna.

Palisadian Karl Taro Greenfeld, who has also filed a case in court (scheduled to be heard in May), explained that it seemed that McKenna would refinance a home over and over with loans, and by the time it came time to sell, there wasn’t money to pay back investors.

“He assembles teams of investors who pool their funds to purchase a property through an LLC of which he is the President,” Taro Greenfeld said. “He then borrows money, ostensibly to build the house, the intention being to sell the properties at a substantial profit to be divided among the investors, along with generous dividends promised the investors along the way.”

Investors were promised a certain interest rate on their initial investment and did not receive it. In addition to the 1362 Bell Oceana property, there were two properties on Alcima and a property on Casalle for which McKenna sought investor money.

Brittany Perrineau won an $858,781 judgement against McKenna, Leslie Gornick, Palisades Funding, Inc. Palisades Capital 7, LLC and Pali Cap Management 9, LLC on January 28.

She explained that it has taken nearly two years for the case to be decided because McKenna used stalling tactics, such as switching lawyers (three different firms were used), and failing to produce documents for discovery. After winning, the judge also required McKenna to pay Perrineau’s attorney fees, calculated at $276,000.

Even with court ordered payment, Perrineau does not expect to recoup her losses. For her, this was about the principle and helping those who could not afford to take the case to court.  “I’m doing this for a lot of senior citizens, friends and people I know,” Perrineau said.

According to the complaint she filed, “McKenna has attempted to develop nearly a dozen real estate properties with the intent to ‘flip’ each property, selling it at a price higher than his purchase price. McKenna associates each property with a different “Palisades Capital Fund” entity.”

“I’ve spoken to 10 to 12 victims,” Perrineau said, “and they all have the same story.”

Taro Greenfeld filed in Superior Court over PaliCap Management 9, LLC. for fraud, breach of contract and breach of fiduciary duty.  He held 20 percent membership in Pali Cap 9 and in an agreement the right to vote on any actions taken by McKenna. It is alleged McKenna took millions out of Cap 9 to settle another dispute without consulting Taro Greenfeld or other investors. Taro Greenfeld asked for an accounting, which never happened.

Taro Greenfeld explained that he first worked with McKenna in 2017, everything seemed on the up and up, it was only later did he learn McKenna, moved money into, out of, and through these companies at will as if they were his own personal bank account, and used these shell companies improperly take money from investors in both Pali Cap 9 and Palisades Capital Fund 1, LLC (“Pali Cap 1”), in which Taro Greenfeld also held a membership interest.

Taro Greenfeld is seeking more than $1 million in damages. He said, “Patrick McKenna and Leslie Gornik are two local businesspeople who have been running a criminal enterprise defrauding the elderly and most vulnerable of our former community for the last 10 years.”

In an email Taro Greenfeld explained that “McKenna was operating a version of Mel Brooks’ The Producers, but with Palisades real estate instead of Broadway flops.

“As he had promised some investors monthly dividends in addition to profits from the sale of the houses, he began to borrow against one project or sell new investors on the project, exceeding 100% of the equity, and using that money to pay current investors’ dividends,” Taro Greenfeld said.

A friend (via Knight’s sister) is owed money through McKenna. After a deposition, which Knight says is not truthful (and has the documents to support that assertion), he will undergo mediation with McKenna later this month. “He’s ruined so many people,” Knight said.

Another lawsuit filed in L.A. Superior Court in November 2025 involves N Family Services against McKenna, Leslie Gornick, Palisades Capital Fund Management, LLC, Capital Fund 4,LLC, Palisades Funding Inc. and The Palisades Capital Partners.

That lawsuit hopes to recoup $2.75 million and an additional $600,000 in security deposit from McKenna.

CTN asked investors if a police report had been filed or if anyone had gone to federal agents.

Helper and Perrineau originally took their complaints to Los Angeles Police Department and to the FBI. The police have not contacted them and the FBI agent told them that unless losses were about $20 million, that agency probably wouldn’t look at it.

After the agent said that, Halper contacted everyone he knew who had invested and he estimates upwards of $20 million from investors have gone missing.