A year after the trustee overseeing the liquidation of Le-Nature's raised allegations of racketeering against the bankrupt Pennsylvania bottling company and several of its lenders, Chicago's MB Financial Bank has filed a suit of its own, going after companies that it says enticed it to invest in Le-Nature's despite knowledge of the company's true financial situation.

The MB Financial suit, filed in U.S District Court in Western Pennsylvania, names as defendants CIT Group Equipment Financing, Marshall Investments of Minneapolis, bottling equipment distributor Krones Inc. and two Krones executives, for their role in covering up - and thereby perpetuating -- an ongoing fraud at the company that cost MB Financial $5 million.

MB Financial has requested that its case be heard by a jury, and is seeking compensatory and punitive damages in an amount "to be determined at trial."

The bank alleges that both CIT and Marshall provided "substantial and knowing assistance" to Krones and Le-Nature's in furthering their scheme to make Le-Nature's appear to be a profitable company, and therefore a good investment.

In its complaint, the bank says that in the course of promoting and marketing an opportunity to participate in a Le-Nature's lease financing arrangement, CIT and the Marshall entities "trumpeted Le Natures' strong financial strength and performance."

However, "What CIT and the Marshall entities knew, but failed to disclose in any of the foregoing oral and written communications with MB, was that the true cost and value of the equipment itself was far less than the amount being financed to Le Natures or, at minimum, the actual cost of the equipment was very much in doubt."

MB Financial says that based on the information it received from CIT and Marshall, on April 15, 2005, it acquired a $5 million participation interest in a lease financing arrangement for bottling equipment at Le-Nature's new Phoenix facility.

According to MB Financial, with the help of CIT and the Marshall entities, among others, "Le Natures successfully raised capital over a prolonged period of years from numerous investors through an elaborate scheme in which it created the illusion of a highly profitable business by falsifying and purposefully overstating its revenues and profits and intentionally understating its debt."

The suit says that the "elaborate scheme" involved Krones paying at least $118 million in "kickbacks" to Le-Nature's to keep the company afloat, and thus keep the financing flowing.

At the end of October 2008 trustee Mark Kirschner -- making an almost identical claim -- filed the racketeering suit in U.S District Court in Western Pennsylvania against former Le-Nature's CEO Gregory Podlucky and 15 "insiders," bottling firms Krones, Inc., and The Pollinger Company, and lenders Wachovia Capital Markets, CIT Group Equipment Financing and Marshall Financial.

Kirschner, who is seeking more than $1.5 billion in damages, alleges that the scheme became known to CIT and the other defendants as early as March 2005, when a former Krones employee blew the whistle about the scheme to the lenders.

But both Kirschner and MB Financial say the defendants failed to forward that information to the other financing participants. "As to benefit their own financial situation and/or reduce their own risk, CIT and the Marshall entities intentionally or, at a minimum, negligently failed to disclose the existence of this material information to MB or to any of the other potential participating lenders," MB Financial notes in its complaint.

Le-Nature's has been the target of numerous civil and criminal actions since filing for bankruptcy in 2006 amid allegations of a massive fraud. In September former company CEO Gregory Podlucky, along with his brother Jonathan, former Le-Nature's vice president Robert Lynn, company consultant Andrew Murin and Donald Pollinger -- a North Carolina equipment broker -- were indicted by a federal grand jury for mail fraud, wire fraud and money laundering for their role in the fraud.

Previously on monitordaily.com:

9/30/2009 - Le-Nature's CEO, Four Others Indicted for Perpetrating Massive Fraud

12/18/2008 - Wachovia, CIT Named As Defendants In Le-Nature's Racketeering Suit