January 4, 2009
YIKES!! A $24 billion lawsuit was filed on January 3 2010 against Credit Suisse… the bank has been accused of defrauding investors in a giant real estate scam. Involved were the loans for resorts in Montana, Nevada, Idaho and the Bahamas.
When reading this, I can not emphasis enough the types of people are are involved… millionaires and billionaires. I would have thought them to be more savvy… sounds like a bunch of real estate investors who didn’t fare so well after the US housing market crashed, and bought some expensive property with loan terms that weren’t in their favour…. then again… I will hold my further thoughts until some more facts come to light….
According to Reuters:
Credit Suisse Group AG has been sued by property owners who said the Swiss bank schemed to defraud investors in four luxury resort communities, including the bankrupted Yellowstone Club.
The lawsuit filed on Sunday in federal court in Boise, Idaho, seeks $24 billion of damages against Credit Suisse and commercial real estate firm Cushman & Wakefield Inc, and class-action status for investors and property owners. Reuters
So…. What did Credit Suisse do? According the Reuters,
According to the complaint, Credit Suisse violated federal racketeering laws by concocting a “loan to own” scheme that inflated the value of resorts and burdened the resorts and purchasers of homes there with too much debt.
Using appraisal methodology provided by Cushman & Wakefield, this scheme allowed Credit Suisse to win “enormous fees,” and ultimately foreclose on or take control of resorts at well below market value, the complaint said. Reuters