BIRMINGHAM, Ala. (CN) - Facing bankruptcy from multibillion-dollar debts in sewer bonds, Jefferson County accuses JPMorgan Securities, the County Commission's former president Larry Langford and others of "lining their pockets" while leaving Jefferson County on the "brink of financial disaster."
In a fraud and conspiracy claim in Circuit Court, the county says the real purpose of the bond swaps was to generate "hundreds of millions" of dollars in fees and interest payments for JPMorgan, while other defendants got cash, clothes and jewelry, and some were paid for doing little or no work.
The county sued just a week after JPMorgan agreed to pay $75 million in penalties and to forfeit $647 million in swap termination fees after the SEC investigation its involvement in the sewer bond deals.
Birmingham Mayor and former Jefferson County Commission president Larry Langford was convicted in October of 60 criminal counts for his part in the sewer deals and the $3.2 billion debt the county faces. Langford was immediately removed from office after the verdict.
Also named as defendants are Montgomery investment banker Bill Blount, lobbyist Al LaPierre, former JPMorgan bankers Charles LeCroy and Douglas MacFaddin, and Blount's investment firm, Blount Parrish & Co.
The county seeks repayment of all fees and profits the defendants earned as a result of their "unlawful conduct," plus damages for fraud, conspiracy and unjust enrichment. Its lead counsel is Joseph Mays Jr.
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