Firm sues ZenniHome for $22 million over failed Navajo housing project
By Krista Allen
Navajo Times
PAGE – A New Mexico architecture firm has sued ZenniHome over claims the company misused nearly $22 million in federal funds intended for Navajo Nation housing and failed to deliver any of the 160 modular homes it was contracted to build.
Indigenous Design Studio + Architecture filed the complaint Feb. 9 in Maricopa County Superior Court. The lawsuit alleges ZenniHome spent millions on consulting fees and other costs unrelated to the housing project while only partially building 18 homes that now sit abandoned at ZenniHome’s LeChee, Arizona, facility.
The complaint names ZenniHome and its CEO Robert M. Worsley, who founded SkyMall and served in the Arizona State Senate as a Republican.
IDS+A was awarded $49,999,995 for the project. The Navajo Nation wired a 50 percent down payment of $24,999,997.39 to IDS+A on Dec. 24, 2024. The firm paid ZenniHome $21.9 million in January 2025 to manufacture and install the homes.
A forensic accounting report commissioned by ZenniHome and included in court filings identified more than $5 million in costs that appeared to violate federal spending rules. The report flagged $3.7 million in consulting expenses as likely unallowable under the contract terms and federal cost principles.
ZenniHome told IDS+A in October 2025 that it was ceasing operations and could no longer perform under the contract. The company announced Dec. 31 that it would wind down operations and begin dissolving.
The lawsuit alleges ZenniHome refused to provide financial records showing how it spent the federal money despite repeated requests from IDS+A and Navajo Nation officials.
Tamarah Begay, the founder and principal of IDS+A, verified the complaint’s allegations in a sworn statement filed with the court.
The complaint also alleges Worsley used his insider-controlled lending company, the NZ Snowflake Lending LLC, to conduct a foreclosure sale of ZenniHome’s assets on Dec. 31 and bought back the company’s property through credit bids. According to the lawsuit, NZ Snowflake Lending is owned and controlled by Worsley. IDS+A is seeking to recover the $21.9 million it paid ZenniHome, requesting the court appoint a receiver to protect the partially built homes and other assets, and demanding a full accounting of how ZenniHome spent the federal funds.
The complaint lists five claims: breach of contract, breach of the implied covenant of good faith and fair dealing, accounting, unjust enrichment and appointment of a receiver.
Under the subcontract terms, ZenniHome was required to use payments only for manufacturing and installing the homes. The contract also required the company to provide invoices and financial documentation within 14 days when requested.
ZenniHome delivered 456 invoices to IDS+A in April 2025 after the Navajo Nation’s Division of Community Development raised concerns about improper spending. The division identified $350,000 in unallowed or unsupported costs in those invoices.
In a June 2025 response to the division, ZenniHome acknowledged it had misunderstood the invoice request and pulled all invoices the company had paid rather than only those related to the Navajo housing project. The company said it would provide proper invoices once installations began, but IDS+A says it never received additional documentation.
The 18 partially built homes remain at ZenniHome’s facility at 1500 N. Desert Paintbrush in LeChee. The lawsuit states ZenniHome initially promised to provide security for the homes and materials but failed to do so.
Burch & Cracchiolo attorneys Ryan W. Anderson, Myles M. Lewallen, Jake D. Curtis, Seth A. Neufeldt and Edward Y. Gao represent IDS+A in the case.
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