Five months after the NCUA filed a complaint against a business lending CUSO with the liquidated Ensign Federal Credit Union, the regulator is going after real estate developers who allegedly defaulted on a nearly $2 million loan.
According to a March 24 suit filed in the U.S. District Court for the District of Nevada, Las Vegas, Habitat Center II LLC was approved for a $1.9 million loan with Ensign on May 30, 2007. The NCUA said the developers and other individuals associated with the condominium project failed to make payments on the promissory note and construction loan agreement on property in Clark County, Nev. On Nov. 1, 2010, the regulator foreclosed on the property, but the proceeds from the sale were not enough to pay the full amount of the defaulted debt, according to the complaint.
Among the defendants the NCUA named in the complaint are loan guarantors Perry Chamani, also referred to as Pirooz Perry Chamani, Fay Chamani and Environmental Landscape Inc. Several unknown corporations may also be named in the suit once their identities are revealed, the agency said in its complaint.
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In November 2010, the NCUA filed a suit against North Star Business Services LLC alleging the CUSO continued to collect payments on 18 commercial loans allegedly owned by Ensign after the credit union was shut down in November 2009 due to declining financial conditions. The NCUA said it believed as of Oct. 1, 2010, NSBS had wrongfully retained nearly $46,000.
Despite the NCUA issuing NSBS a cease and desist order, the CUSO continued to collect payments and allegedly threatened borrowers with servicing fees if they did not comply, according to the regulator. The CUSO's principals, David Osburn and Mark Moody, were named as defendants in the complaint.
Moody previously told Credit Union Times that the alleged fraudulent payment collection claims the NCUA has brought against the defunct CUSO were false. Moody said that the day after Ensign's liquidation, the NCUA contacted NSBS and told it to continue to service and collect payments on the 18 commercial loans in question.
In February 2010, he said he received another letter from the NCUA saying the CUSO's services were no longer needed. Moody said he then contacted an attorney and in March 2010 sent a letter to the NCUA seeking a payment of $115,500 from the regulator for management and administrative fees. He added that the nearly $46,000 the NCUA was seeking would continue to be held until he received the $115,500 payment from the regulator.
In addition to Ensign, NSBS worked with three other credit unions. The CUSO has since dissolved, and Moody is doing consultative work. After the NCUA liquidated Ensign in November 2009, it authorized the purchase and assumption of member share accounts to Plano, Texas-based EDS Credit Union, which is now known as InTouch Credit Union.
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