Harvard Illinois Bancorp could be the victim of fraud.
The $171 million-asset company said in a press release Wednesday that it was recently informed that certain loans used to back its investment in repurchase agreements may be fraudulent. Harvard Illinois said it had invested about $18 million in the repurchase agreements.
Harvard Illinois said it had understood that the loans were guaranteed by the U.S. Department of Agriculture. Pennant Management, the firm Harvard Illinois used to make the investments, is working to affirm the guarantees associated with each loan.
The company said it is unclear whether it will recognize losses tied to the agreements.
