Troon Pacific, a San Francisco developer of ultra luxury homes in tony neighborhoods like Pacific Heights and Cow Hollow, has been ordered to pay back $48.1 million to investors after an arbitrator ruled that it had squandered  investors’ money through a combination of “fraudulent self-dealing” and “wanton dereliction of responsibilities.”

In a ruling made public late Wednesday, arbitrator David Garcia, a retired San Francisco Superior Court judge, ordered that Troon Pacific pay back investors who had put $48.1 million into a fund dedicated to renovating and flipping four deluxe residences in the city: 2646 Union St., 2582 Filbert St., 2950 Pacific St. and 63 Carmel St.

Only two of the four projects were completed — the Union Street and Filbert Street properties — while construction never started on the other two homes, according to a petition to confirm the contractual arbitration award, filed in San Francisco Superior Court May 1. 

While the investors never saw a dime of their money, Troon Pacific — which is headed up by Greg Malin — made out handsomely, pocketing $14 million in fees, according to the final award of arbitration. The group took $2.8 million in developer fees, $2.1 million in construction management fees, $1.7 million in general contractor fees, $1.9 million in interior design fees, $1.1 million in asset management fees and $230,000 in lighting design fees.

The case captures the dizzying gold rush of pre-pandemic San Francisco, a time when billion-dollar unicorn tech companies were seemingly sprouting up overnight and capital from around the globe was pouring into San Francisco looking for a piece of the action. 

The petition claims that Malin’s group “stole the company’s funds through various fraudulent and criminal schemes, artificially inflated their costs and the projected asset values of the properties to justify excessive and improper fees.”

Attorney Adrian Sawyer, who represents Troon Pacific, did not respond to requests for comment.

Before the pandemic the company was anything but publicity-shy. With regular features in magazines like Mansion Global and Lux Expose, Troon Pacific promised “high performance homes with cutting-edge form and function dedicated to the health and wellness of our homeowners and our planet.”

“That includes some of the most progressive homes in San Francisco’s most desirable neighborhoods, from the Gold Coast to Russian Hill,” the company website says. “Troon Pacific believes nothing builds value like a commitment to our high standards and core values of quality execution, the highest levels of sustainability, and complete wellness.”

A 2019 headline in Mansion Global on the company states “high-tech San Francisco home lists for $29.8 million.” Upscale Living Magazine featured Troon Pacific in a story entitled “Over The Top Homes for Nature Lovers.” A Wall Street Journal headline said: “A $46 Million San Francisco Spec House is one of the City’s Priciest Listings Ever.”

Yet, the final arbitration report portrays a company where inexperienced people were regularly hired for key roles and the line between the company and Malin’s personal life was often blurry. Malin’s personal chef and household manager — a university-trained pastry chef — was put in charge of property management. The chief operating officer and director of construction had never worked for a real estate developer previously, according to the arbitrator’s report. 

There were also instances of double billing and backdating of official documents, the report claims. 

The fund, Uni SF V11, indirectly paid the costs of the construction manager, who ostensibly was representing investors, while Malin “charged millions of dollars in additional fees for her services, effectively double billing for her services,” according to the arbitrator’s report. 

In addition, the signature of Charlot Malin — Malin’s late wife — was posthumously added to a corporate resolutions document. “(Malin’s) deceased wife’s signature was affixed to several resolutions,” the report states.

Kyle Withers, the attorney for the investors who were “fleeced,” said his clients were happy with Judge Garcia’s ruling. 

“In Judge Garcia’s words, the $50 million award was an equitable and proper result because Gregory Malin engaged in fraudulent self-dealing, corrupted the UNI SF VII fund, and wantonly breached his fiduciary duties to my clients and the other investors in that fund,” said Withers, who works for the Lubin Olson & Niewiadomski firm. “Several investors in UNI SF VII lost a significant amount of their retirement savings.”

Malin’s net worth is between $40 million and $50 million, according to the arbitrator. 

The case is not the first time the builder had come under scrutiny. In 2018, Troon Pacific agreed to pay a $400,000 settlement to the city, without admitting to having done anything illegal, for violating a building permit by removing exterior walls and windows of a historic landmarked Willis Polk-designed home at 841 Chestnut St. 

Board of Supervisors President Aaron Peskin, who was critical of the Chestnut Street demolition, said the Troon Pacific saga is a cautionary tale for boom-and-bust San Francisco. “When it looks too good to be true‚ it’s almost always too good to be true,” he said. 

Reach J.K. Dineen: jdineen@sfchronicle.com