A lawsuit filed earlier this week against former Bothell City Councilman James McNeill, who is accused of murdering his 20-year-old girlfriend in late April, alleges that McNeill stole approximately $385,000 in loan funds that were intended for the construction of a Bothell housing project.
McNeill, 58, was charged with second-degree murder and domestic violence in the death of his on-again, off-again girlfriend, Lilia Gaivoronski, whose body was found in her townhouse in Seattle’s Rainier Valley after McNeill’s lawyer called 911, according to the King County Prosecutor’s Office.
According to the indictment, Gaivoronski, who suffered wounds that appeared to be caused by strangulation, was killed sometime between April 28 and 30. The King County coroner’s office has not yet released her cause and manner of death. McNeil remains in custody in lieu of $3 million bail.
The civil lawsuit, filed Tuesday in King County Superior Court, accuses McNeill of taking out a construction loan and using the money for his own purposes, including providing financial support to his intimate partner. Gaivoronski is not named, but the complaint alleges McNeill is accused of murder “committed against an intimate partner.”
According to the lawsuit, McNeil and his construction company, McNeil Management, partnered with Richard Paylor and his real estate investment company, MainStreet of Bothell, to develop land owned by Paylor in March 2023. The partnership operated under the name Reserve Partners.
McNeil Management, which registered as a construction business in January 2023, is listed as “delinquent” on the Washington Secretary of State’s website.
Attorneys Zachary Smith and William Kessler of the Edmonds law firm Beresford Booth are representing plaintiffs Paylor and Main Street, of Bothell. The attorneys did not respond to messages seeking comment.
McNeill, his wife, Colleen McNeill, and their husband-and-wife companies, McNeill Management and Banner Bank, are named as defendants. They face a default judgment if they don’t respond to the complaint within 20 days of last Wednesday, according to court records. They do not yet have an attorney on record to represent them.
The plaintiffs are seeking an injunction to prevent James McNeil from further misusing the loan funds and to prohibit Banner Bank, which holds the funds, from allowing the defendants to withdraw or transfer the funds. The plaintiffs also assert other causes of action, including breach of contract and breach of fiduciary duty by McNeil Management, and fraud and unjust enrichment by James McNeil.
The lawsuit seeks to remove McNeil Management from the partnership or, as an alternative, to dissolve the partnership.
According to the lawsuit, MainStreet in Bothell provided the land to the consortium, and McNeil Management provided labor, materials and construction management services, including project management. The consortium agreed to take out a construction loan and, once the homes were built and sold, would first pay off the loan, pay MainStreet in Bothell the market value of the land and split the remaining proceeds, according to the lawsuit.
The complaint does not specify where in Bothell the property is located.
According to the complaint, McNeill drew down construction loans four times, gave vague or false descriptions of how the funds were used and failed to provide supporting documentation requested by Paylor.
According to the lawsuit, Paylor approved the withdrawal of the loan “because he trusted McNeil,” and McNeil then deposited the funds into his own account.
The complaint alleges that sometime in late 2023 or early 2024, McNeill “entered into a relationship with an intimate partner who was financially supporting her” and that the money given to her “consisted in whole or in part of misappropriated loan funds.”
After McNeill was arrested and charged with murder, Paylor “began to fear repercussions regarding the misappropriated loan funds, the future of the partnership and Plaintiffs’ obligations under the loan,” according to the lawsuit.
McNeil was elected to the Bothell City Council in November 2015 and served two terms in the Position 4 seat. He ran for the Position 2 seat in 2023 and lost to incumbent Mason Thompson.
