A pair of Oregon banks are facing charges in a civil lawsuit brought by victims of an alleged Ponzi scheme.
Banks that belong to Umpqua Holdings (UMPQ) and Pacific Continental (PCBK) were named as defendants in a class-action lawsuit filed in the Multnomah County circuit court on Friday,
"Little, if any, of investor funds were actually used in the insurance premium financing business, which was declining throughout the period and never very profitable," the lawsuit claims.
Fred "Jack" Holcomb, Berjac's 93-year-old founder and a member of the Oregon Bankers Hall of Fame, is also charged in the lawsuit, along with the Holcomb Family LP, Holcomb Family Trust, and accounting firm Jones & Roth.
The defendants are seeking more than $10 million in damages.
In my view, its another class-action shakedown, Steven Philpott, Umpquas general counsel, said in an interview. Our banking relationship with Berjac ended more than four years ago. We provided them with a checking account and a secure line of credit. The plaintiffs made unsecured loans to Berjac, and they claim they were getting paid 5% to 7% interest compounded quarterly. Our loans were repaid, theirs werent, and now theyre looking for someone to cover their losses.
"Although we can't discuss this matter in detail due to its legal nature, be assured we take this matter very seriously," Pacific Continental Chief Executive Hal Brown said in a
Pacific Continental is a $1.4 billion-asset company based in Eugene, Ore. Umpqua has $11.5 billion in assets and is based in Portland, Ore.
