Springfield Hotel Owner Accused of Fraudulent Damage

The owner of the Wyndham Springfield City Centre is embroiled in a heated legal battle after facing allegations that he conspired to inflict extensive water damage on his own 369-room hotel, rendering it inoperable. The claim, filed on August 25 in federal court, asserts that Tower Capital Group general manager Al Rajabi orchestrated the damage to secure an insurance payout through “willful misrepresentations and concealments of material fact.”

In June, Rajabi initiated a lawsuit in the U.S. District Court for Springfield, seeking reimbursement under his property insurance policy for what was described as vandalism that occurred on March 27. However, the insurance company, Affiliated FM Insurance Co.,denied the claim, citing suspicions that Rajabi himself was behind the intentional act of damage.

According to the insurer, an August 11 letter to Rajabi stated that investigators concluded the March 27 incident was deliberately caused by him, possibly in collaboration with others, or by individuals acting with his knowledge. The insurer further alleged that Rajabi had previously submitted a fraudulent claim for damage from an alleged March 2024 lightning strike, resulting in a $4.05 million payout, despite evidence suggesting the damage was minimal and intentionally misrepresented.

Citing Illinois’s insurance fraud statutes, Affiliated FM has asked the court to award triple the value of the fraudulent claim plus attorney fees, interest, and costs, seeking a total recovery of $12.2 million.

According to the  lawsuit, the flooding caused by the damage disabled all six passenger elevators in the aging, 52-year-old hotel and inflicted widespread harm across various facilities,including restaurants, meeting and banquet rooms, guest rooms, apartments, and common spaces, necessitating extensive repair work, such as replacing electrical systems, drywall, carpeting, and more. Rajabi’s policy reportedly offers nearly $231 million in total coverage, although he has not disclosed a specific estimate of the repair costs.

Fire Department records indicate that on March 27, responders encountered flooding and elevator damage at the hotel, though no fire was present. The State Fire Marshal later ordered the building closed to the public due to nonfunctional elevators and compromised fire safety systems. Investigations revealed that two 200-gallon water tanks had malfunctioning shutoff valves which broke apart, causing water to flow into elevator shafts, a hazard later contained by firefighters.

Affiliated FM engaged a private investigator who conducted sworn interviews with the hotel’s former general manager and other employees, who provided photos, texts, and screenshots as part of the insurer’s internal investigation.