Defendants fight senior living community lawsuit

As the property foreclosure auction is pushed back to a new date, the defendants in a civil lawsuit alleging coordinated fraud and embezzlement around a bankrupt, unfinished senior living community in Littleton are fighting back and asking the judge to dismiss the case.

This week at Grafton Superior Court, where case documents with new details have been submitted, the loan officer involved in the financing filed a motion to dismiss most of the claims against him.

In June, Service Federal Credit Union (SCU), which issued a $28 million construction loan to Granite Senior Operations for a senior living community at 1262 St. Johnsbury Road, filed suit against David Weed, the loan officer who was fired from SCU; Weed’s wife, Tina; brothers George and Michael Papadimatos, the property owners who formed Granite Senior Operations LLC for the enterprise; and Weed’s friend, Shawn Harressey, a mortgage broker with CTC Commercial; and Harressey’s wife, Alicia.

The credit union also named the Weeds’ and George Papadimatos’ personal real estate trusts, where it alleges the defendants transferred money that they acquired from the loan around the time the Papadimatos brothers defaulted on payments.

SCU asserts claims for breach of contract, fraud, civil conspiracy, unlawful conversion, unjust enrichment, fraudulent transfer, and, on the part of Weed, gross negligence.

Among the allegations, the credit union argues that the defendants unlawfully used various disbursements of loan funds for their own personal benefit, including a trip to Greece by Weed and George Papadimatos; fraudulent invoices submitted by George Papadimatos for stated work done by his spray foam insulation business at a time when no buildings had been erected; a 3-percent mortgage broker commission totaling $850,000 that was split between Weed and Harressey and not disclosed to SCU’s board of directors for approval; and that Weed knew or should have known that invoices were fraudulent and the Papadimatos brothers were incurring debts beyond their ability to pay.

According to documents, the project encountered cost overruns, after which the contractor stopped work following a lack of payments, and the SCU loan, all of which had essentially been paid out, went into default in September 2025.

SCU seeks recovery of all outstanding loan amounts, damages from the alleged misconduct, and recovery of assets that it claims were transferred by several defendants, through several deliberate steps, to avoid repayment.

In August, Harressey filed a motion to dismiss the case against him and Alicia and moved to quash SCU’s subpoena, asking the court to order him to appear for a deposition to produce certain financial records.

Both motions prompted SCU to file objections.

In its objections, SCU attorneys argue that Harressey and the other defendants personally benefited from payments that SCU made toward the fraudulent invoices and Harressey and the other defendants “embezzled millions of dollars in Loan funds funneled through Blue Lodge,” the name of Papadimatos’ spray foam business.

“Notably, SCU has evidence (developed pre-discovery) of Shawn/CTC receiving over $200,000 in Loan funds from Blue Lodge after closing,” wrote Timothy Britain, Bridget Denzer, and Deborah Notinger, the attorneys for the credit union. “Significantly, Shawn attempted to hide this information from SCU and the Court, previously filing an affidavit wherein he attested — falsely — that the only money he received related to the Project was $850,470 paid to CTC/Shawn at closing.”

“In addition, since filing its lawsuit, SCU has received evidence that suggests that Shawn/CTC received additional funds from the Loan (and other SCU loans) and that suggests that Shawn/CTC shared Loan funds wrongfully disbursed to Shawn/CTC with David,” said the SCU lawyers, who argue that the information sought through the subpoena is material to SCU’s claims.

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On Wednesday, Weed, who is represented by attorney William Christie, filed his motion to dismiss, arguing that, “This case is a lender’s attempt to convert a failed commercial real estate loan into a fraud case against its own former employee.”

The loan, approved through SCU’s member business lending committee, closed in June 2022, was funded over the next three years, and was monitored by SCU business services staff and the third-party management retained for the project, Christie said.

“SCU may believe it made a bad deal,” he said. “As against David Weed, it is not a valid lawsuit.”

As of Friday, SCU had not yet responded to Weed’s move for dismissal, no future court dates had been scheduled at Grafton Superior Court, and no new filings had been submitted.

New Auction Date

In its court filings, SCU has said it is unlikely to recoup all $28 million through a foreclosure auction because the property — about 80 percent of which is complete — is not worth that much.

The property, previously called Artemis Living at Littleton, is currently listed with Paul McInnis LLC, which planned an auction for Oct. 7.

According to the Paul McInnis website, the new live auction date is 2 p.m. Thursday, Oct. 29, on-site at 1262 St. Johnsbury Road.

The deposit to bid is $100,000.

The auction listing reads, “Artemis Living is a phased master planned senior housing development. A 73-unit independent/assisted living/memory care facility containing 71,131 +/- square feet in need of completion. Additional planned phases include twenty-two cottage units and a 56,000-square-foot holistic multi-purpose building. Located in northern New Hampshire, Littleton is at the intersection of Interstate 93 and US Route 302 and is considered the business hub for the northern portion of New Hampshire.”

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