Motion for Partial Summary Judgment against Credit Suisse and Cushman & Wakefield

Plaintiffs in the $24 billion lawsuit have a powerful argument supported by an expert witness with impeccable credentials. Witness describes ”…premeditated scheme and crime to defraud…”

Palm Coast, FL – May 19, 2011 – In a further development in a lawsuit against Credit Suisse and Cushman & Wakefield, plaintiffs have filed a Motion for Partial Summary Judgment. The motion focuses on the portion of the complaint directed towards defendants’ alleged use of fraudulent appraisals to artificially inflate the values of master planned luxury communities.
This is another story in the continuing series chronicling the $24 billion "Loan to Own" lawsuit against Credit Suisse and Cushman & Wakefield. The lawsuit alleges that the defendants conspired to over-burden luxury master planned resort communities with crippling debt anticipating a predicable default, after which Credit Suisse or one of its proxies would sweep in to pick up the pieces, reaping giant fees along the way.
Latest revelation
In a disclosure under oath, well known expert witness D. Michael Mason, (MAI) dissects four appraisals covering Yellowstone Club, Tamarack, Lake Las Vegas, and Ginn sur Mer. Ginn sur Mer is the $4.9 billion Grand Bahama Island resort begun by Palm Coast, FL developer Bobby Ginn and his financial partner Lubert-Adler. Mason concludes [emphasis added]:
"These violations rise to the level of an ethics violation under USPAP, which states that an appraiser must not communicate assignment results in a misleading manner. FIRREA appraisal regulations specifically address this issue: ‘This standard is designed to avoid having appraisals prepared using unrealistic assumptions and inappropriate methods.’"
"Since R41-b was adopted by the Federal Banking Regulatory Agencies in the early 1980s, the Federal Government, in order to protect the public and foster public trust in the banking industry and in the appraisal profession, has regulated appraisal activity so as to specifically exclude the type of analysis which these appraisals provided. These appraisals violated numerous legal standards and ethical principles that the appraisal industry has attempted to adhere to. Considering the monetary figures, and the sophistication of the lenders and appraisal firm involved in these real estate transactions, these appraisals appear to have been part of a broader, pre-meditated scheme."
"…In my opinion, the procurement and use of these appraisals was designed to artificially inflate values so as to defraud developers, and other who had, and would, purchase lots or homes or otherwise invest in the resorts. Such parties would not be expected to be aware of the apparent violations of federal and state laws, standards, regulations and guidelines described above. In my view, it appears these appraisals were part of a much broader premeditated scheme and crime to defraud the developers and everyone else that owned, held, or acquired an interest in the developments."
It appears that the defendants’ own carelessness might be their undoing. The telltale clues lie with inconsistencies within their own loan and appraisal documents. "Oh what a tangled web we weave when first we practice to deceive." [Sir Walter Scott]
If the appraisals were illegal, then the loans were as well. Lenders will have lost their right to enforce their position through foreclosure. Yet the developers did not avail themselves of this defense when Credit Suisse foreclosed. What if the developers’ attorneys had found the whistleblower and expert witnesses uncovered by plaintiffs’ attorneys in this lawsuit? Likely bankruptcy could not have been avoided, but they might still be in control of their respective developments
Credit Suisse and Cushman & Wakefield have a lot to be worried about. The alleged Federal and State criminal violations may result in severe financial penalties as well as lengthy jail sentences. Credit Suisse did not loan its own money. The loans were syndicated by Credit Suisse; the money coming from scores of hedge funds. I imagine some of these investors are watching this lawsuit closely.
And this is a motion for Partial Summary Judgment. Other allegations remain including; Tortious Interference with Contractual Relations, Breach of Fiduciary Duty, and violation of the Consumer Protection Act.

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1 reply
  1. John
    John says:

    No Jail

    It seems to me with cases this big the companies will get hit with a monetary penalty for their crimes but not a signal person will serve any jail time.

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