Fla. Law Firms, Bank, Beat Loan Foreclosure RICO Suit Claiming Forged Loan Documents

Over Statue of Limitations

BACKGROUND

The Court begins with a brief overview of the allegations made in Plaintiffs’ complaint.

As alleged, in 2006, Maron and Michael Roiburt met with an AEB executive to discuss financing for the purchase and rehabilitation of a property at 1421-25 W. Garfield in Chicago (“Chicago Property”). (Compl. ¶¶ 150–51, Dkt. No. 1.) Ultimately, AEB extended a loan of about $1.6 million to Bishop—an entity of which Maron and Michael Roiburt were co-members—to finance the sale and rehabilitation of the Chicago Property. (Id. ¶ 185.) The Bishop Loan was secured not only by that Chicago Property but also by mortgages on two Florida condominiums, one owned by Maron and her then-husband Fridman and the other owned by Michael Roiburt and his wife Bella Roiburt. (Id. ¶¶ 186, 463.) However, neither Maron nor Michael Roiburt authorized the use of the Florida condominiums as collateral, and AEB purportedly acquired its security interest in them based on forged documents created by one of its executives. (Id. ¶¶ 195–96.) Also unbeknownst to Plaintiffs, AEB employed other fraudulent means to inflate the value of the Bishop Loan to a level not supported by the value of the underlying property or any Plaintiff’s net worth. (Id. ¶¶ 161–82.)

Eventually, the Bishop Loan went into default. AEB successfully purchased the Chicago Property in an April 2010 judicial sale. (Id. ¶¶ 377, 420.) Then, in March 2011, AEB initiated an action to foreclose on the Florida condominiums in Florida state court. (Id. ¶ 351.) According to Plaintiffs, over the course of the foreclosure action (which was ongoing at the time the present lawsuit was initiated) AEB had its attorneys make numerous false filings and submissions to the court. (Id. ¶¶ 270–496.) Certain of the allegedly false filings were signed by AEB executives. (Id. ¶¶ 293–347, 392–496.)

Broadly, Plaintiffs allege in this action that they were caught up in a scheme on the part of AEB and various AEB entities and executives to knowingly extend low-quality and risky loans to borrowers. (Id. ¶ 46.) AEB would then profit off the fees associated with originating those loans and by selling the loans before they defaulted. (Id. ¶¶ 46–47, 505, 508.) When AEB was unable to sell the loans before default, it would foreclose upon the properties underlying the loans. (Id. ¶¶ 46, 49–50.) Each count of Plaintiffs’ complaint alleges that AEB and various configurations of AEB parent and successor entities, executives, and attorneys, engaged in a pattern of racketeering activity. Altogether, Plaintiffs’ complaint sets forth claims under each of the RICO’s four subsections and seeks to hold each Defendant liable under the RICO’s civil enforcement provision, 18 U.S.C. § 1964(c).

CONCLUSION

AEB Defendants’ motion to dismiss for lack of jurisdiction (Dkt. No. 15) is denied, along with the corresponding motions by those Defendants who joined that request (Dkt. Nos. 31, 42). Defendants’ motions to dismiss for failure to state a claim (Dkt. Nos. 17, 32, 39, 40) are granted. Plaintiffs’ complaint is dismissed with prejudice based on the statute of limitations. The Clerk will enter Judgment in favor of Defendants and this case will be closed.

Full Opinion below…

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