The Illinois Metropolitan Investment Fund ran into trouble a couple years ago when one of the funds they invested in fraudulently squandered the public funds. Initially, the estimate of recovery of funds was believed to be somewhere above 80%, but was later downgraded to 47.6% of the original value of the FFF investments in a February update.
IMET has only recovered around 5% of its losses incurred in this scheme so far.
In another twist, IMET and several banks filed suit on August 31, 2016, in Federal Court in Florida against the United States Department of Agriculture in an attempt at releasing the remainder of the funds. USDA says they did nothing wrong in their part of approving the applications in the process.
The alleged fraud involved phony loan documents, forged documents, fake USDA approval stamps, borrowers that did not exist, and others.
This suit complains of alleged:
- Business and Industry Guaranteed Loan Program losses and that the USDA's approval of a lender constituted a stamp of government approval making its purchase an attractive investment backed by the United States Government
- First Farmer's Financial (FFF) filed an application for USDA approval, but prior to filing developed a scheme to sell interest in fictitious government guaranteed loans - in short, they wanted the USDA approval to gain access to the market in order to sell fictitious loans
- FFF sent false statements as part of their application and the USDA failed to investigate the accuracy of the statements
- USDA approved the application without investigating and following its own regulations in the approval process
- The total from plaintiff's investments are $154,216,302.15 ( 154.2 million dollars )
- After investing, it was learned that the collateralized loan guarantees were forged and none of the borrowers actually existed. They also learned the CPA who supposedly performed the audit did not exist
- USDA's negligence resulted in plaintiff's investments into the forged loans
Plaintiffs are seeking recovery of all their funds, including interest and fees/costs from the United States Government.
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[gview file="https://edgarcountywatchdogs.com/wp-content/uploads/2016/09/IMET-v-USA.pdf"]
Other docs if you are interested in reading them include:
1 Comment
mark misiorowski
Posted at 06:39h, 06 SeptemberDear Sir/Madam:
One of the IMET updates (May 2, 2016) you provided with your article indicates that the USDA has submitted a claim of $105 million dollars.
The IMET update (February 18, 2016) you provided indicates that the IRS, SBA and various state taxing authorities have also submitted claims involving this matter.
Can anyone provide hard figures as to how much the IRS, SBA and various state taxing authorities are seeking dollar wise via their claims? I did not see that specific information in the IMET updates.
Further, what are the chances that USDA, IRS, SBA, and/or state taxing authorities will subordinate their claims here?
Thank you.