Executives of funding agency iCap ran the scheme from 2013 to 2022, a federal chapter decide dominated this week. They turned to the scheme when their actual property portfolio did not yield outcomes.
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Embattled Bellevue-based funding agency iCap may very well be dealing with its finish after a federal decide within the Yakima chapter courtroom dominated the corporate’s former leaders defrauded buyers of $230 million in a multi-year Ponzi scheme.
First reported by The Seattle Instances on Friday, Chief Choose Whitman Holt stated in an Oct. 15 ruling “there may be substantial, if not overwhelming, proof” that iCap used buyers’ cash to repay different buyers, as a substitute of paying them month-to-month curiosity funds from a number of actual property growth tasks within the Larger Seattle Space.
Traders’ attorneys stated former iCap leaders Chris and Jim Christensen repeatedly assured buyers that the developments they’d invested in have been “actively producing income.” Nevertheless, an impartial audit of iCap’s data revealed the corporate solely earned $1.4 million in income from 2013 to 2022 — which means the Christensens have been $228.6 million in need of what they promised to pay buyers.
“They might have been higher off simply placing the cash in Treasury bonds and letting it sit there,” Holt stated of iCap’s low price of return.
A restructuring agency took over iCap final 12 months and commenced promoting off the corporate’s portfolio. As of October, the agency has bought 15 properties for $19 million and is engaged on promoting the remaining. Nevertheless, nearly all of the gross sales proceeds have gone towards chapter proceedings, which means not one of the buyers have been repaid.
The Seattle Instances stated Holt’s ruling offers the groundwork for future lawsuits towards the Christensens and different entities concerned within the scheme. Traders might be able to get a tax deduction for the monies they invested in iCap, the article stated.
Jim Christensen declined to touch upon the ruling. Chris Christensen instructed The Seattle Instances he “strongly disputes the allegation that iCap operated as a Ponzi scheme.”
Electronic mail Marian McPherson
