In a statement, Huntington Bancshares said as reported late Friday, March 18, 2011, the U.S. Bankruptcy Court Western District of Michigan has ruled that its banking subsidiary Huntington National Bank may be required to pay up to $73 million to a trustee representing lenders defrauded by former Michigan-based Teleservices Group and a related company, Cyberco.

Huntington noted that no judgment fixing damages has been issued and that it plans to aggressively contest the claims of this complex case, which is subject to further proceedings. As this case continues to be litigated, no additional comments can be provided at this time.

In the ruling, the bankruptcy court found that Huntington National Bank must pay $73 million to a trustee representing a large group of lenders who were defrauded as a result of the bank’s failure to investigate potential improprieties in accepting payments from Teleservices and apply them to Cyberco’s loans. The court said, “Huntington had turned a blind eye to the mounting evidence that the transfers from Teleservices were not the collected Cyberco receivables as it had been led to believe.”

Previously on monitordaily.com over the years 2006-2008, which include a comprehensive list of restitution payees (December 21, 2006):

Lenders Squabble Over What’s Left of CyberNet Assets
Thursday, January 10, 2008

Final CyberNet Defendant Gets 2 ½ Years
Tuesday, December 18, 2007

CyberNET Defendant Enters Guilty Plea for Role in Leasing Scheme
Tuesday, September 04, 2007

El Camino, ePlus & Bank Midwest Sue Huntington Bank in Cyberco Fraud
Monday, June 25, 2007

CyberNET’s Horton Gets 7 1/2 Years; Three Others Indicted
Thursday, December 21, 2006

Former CyberNET Chief Pleads Guilty in Fraud Case
Friday, June 23, 2006