Executives at funding agency iCap ran the plan from 2013 to 2022, a federal chapter choose dominated this week. They turned to this method when their actual property portfolios have been underperforming.
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Bellevue-based funding firm iCap is in bother after a federal choose in Yakima Chapter Court docket dominated that the corporate’s former executives defrauded traders out of $230 million in a multi-year Ponzi scheme. Funding firm iCap, which has fallen right into a disaster, could also be coming to an finish.
first reported by seattle times on fridayChief Choose Whitman Holt dominated in an Oct. 15 ruling that iCap used investor funds to repay different traders as a substitute of constructing month-to-month curiosity funds from a number of actual property improvement tasks within the Capital Area. “There may be substantial, if not overwhelming, proof,” he stated. Seattle space.
Former iCap leaders Chris and Jim Christensen repeatedly assured traders that the developments they invested in have been “actively producing returns,” based on the traders’ legal professionals. Nevertheless, an unbiased audit of iCap’s data revealed that the corporate earned solely $1.4 million in revenue from 2013 to 2022. This meant the Christensens have been $228.6 million in need of what they’d promised to pay traders.
“It could have been higher to place the cash in authorities bonds and depart it alone,” Holt stated of iCap’s low charge of return.
Final 12 months, a restructuring firm acquired iCap and commenced promoting its portfolio. As of October, the corporate has offered 15 properties for $19 million and is engaged on promoting the remaining properties. Nevertheless, a lot of the proceeds from the sale went towards chapter proceedings, that means not one of the traders have been repaid.
seattle occasions Holt stated his ruling will lay the groundwork for future lawsuits in opposition to Christensen and different events concerned within the venture. Traders could also be eligible for tax deductions on funds invested in iCap, the article states.
Jim Christensen declined to touch upon the decision. Chris Christensen stated seattle occasions He “strongly disputes the allegation that iCap was operated as a pyramid scheme.”
E-mail Marian McPherson
