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The wife of a former Missouri State Representative has filed a lawsuit against Central Bank of Kansas City for alleged fraud.
January 14 -
Four Oaks Fincorp (FOFN) in Four Oaks, N.C., and its bank have agreed to pay $1.2 million to settle claims they ignored warning signs of a scheme to defraud customers.
January 9
Regions Financial (RF) and MCG Capital (MCGC) have accused a Dallas securities firm of participating in a fraud that cost the two lenders millions of dollars in losses.
NexBank Securities, a subsidiary of NexBank Capital, persuaded Regions and MCG to provide the now-bankrupt agriculture company Color Star with roughly $66 million in financing, according to two separate lawsuits filed in the U.S. district court in Dallas. Several Color Star officials, an auditing firm and a lawyer that worked for the company, and NexBank's head of investment banking, Barrett Kingsriter, are also named as defendants.
Color Star disguised its troubled financial condition for years by misstating its inventory and earnings, according to the complaint filed by Regions. Color Star is said to have needed to refinance more than $40 million in debt in 2012 in order to stay in business. It hired NexBank, which then did business under the name Barrier Advisers, to support its loan applications.
Regions' bank syndicate provided Color Star with $52.5 million in loans, including $35 million from Regions, the complaints say. MCG separately provided $13.5 million in financing. Their credit decisions were based on false information, according to the complaints.
"Barrier and [head of investment banking] Kingsriter organized and led a conspiracy to prevent Regions from discovering the truth," the Regions complaint says.
"Defendants erased correcting entries made in Color Star's accounting system by one of Color Star's controllers after he learned the truth about Color Star's fraudulent bookkeeping," according to the complaint. "Defendants then fired the controller to continue the fraud. Defendants knew without question that the financial statements they gave to Regions as part of Color Star's loan application misstated Color Star's finances by many millions of dollars, yet defendants said nothing to Regions to correct Regions' doomed reliance on those documents."
Color Star
NexBank's lawyer, James Walker, did not immediately respond to a request for comment.
"Regions will vigorously pursue the repayment of loan funds we believe were fraudulently obtained through a complex accounting scheme perpetrated by NexBank Capital Advisors, their client and other parties," Regions spokeswoman Evelyn Mitchell said in email.
MCG's attorney Jerry Mitchell did not immediately return a call seeking comment.
