Investors Sue Leasing Company Participants in Ponzi Scheme

According to documents filed in the U.S. District Court Southern District of New York, investors involved in a ponzi scheme perpetrated by John W. Otto who controlled several leasing companies – Manufacturers Acceptance Corporation, Hill Leasing and Heritage Pacific Leasing – have filed a law suit against a group of participants that played a key role in aiding and abetting the operation as a scheme disguised as a successful national equipment leasing business.

Over its lifespan, the fraud bilked in excess of $138 million from more than 1,200 individual and corporate investors nationwide. The lawsuit seeks to hold the defendants to account for their misfeasance, which enabled the massive fraud to continue unchecked against unsuspecting investors. The list of defendants includes: New Era Funding, Centerpoint Financial Services, Pentech Financial Services, Financial Pacific Leasing, First Sierra Financial and Belvedere Equipment Finance.

The plaintiffs, Cobalt Investments, Dragga LLC and Real Estate Network, are seeking compensatory and punitive damages for fraud, conspiracy, negligent misrepresentation, breach of fiduciary duty and breach of contract. According to the court documents, the plaintiffs are seeking not less than $700,000 plus punitive damages.

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