LAS VEGAS (CN) - USA Capital's former CEO Joseph Milanowski orchestrated a multimillion-dollar securities fraud against thousands of investors, the SEC claims in Federal Court.
Nearly $87 million - 94 percent of the USA Capital Diversified Trust Deed Fund's $92 million portfolio - was used to make illegal, unsecured loans to affiliates who eventually defaulted, the lawsuit states.
Milanowski's misuse of the fund's money and the high volume of defaulted loans caused USA Capital to file for bankruptcy in April 2006, the SEC says
According to the bankruptcy court's December 2006 reorganization plan, investors will get 25 to 46 cents for every dollar invested.
Last week, accounting firm Deloitte & Touche was accused in a separate federal lawsuit of helping the company carry out the fraud by turning a blind eye to the alleged misconduct and painting a rosy picture about the company's success before quietly dissolving its relationship.
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.
Additional Reads
-
Alaska, Hawaiian Airlines April 17, 2024 -
-
Contributor-Test-Post-2024-04-12 April 12, 2024 -
