Settlement in Prime Bank Fraud Case

Defendants were charged with raising $3.5 million from 8 investors, including $3.2 million from Chicago Housing Authority pension plans, through false statements and omissions regarding the true use of proceeds, the rate of return and the risk of the investment. Specifically, investors were allegedly told that their funds would be pooled with other investors’ funds to buy and sell fictitious prime bank instruments, specifically, letters of credit, standby letters of credit, and notes issued by the top 100 world banks, while in reality the money was misappropriated for Ponzi payments or personal use. Defendants were permanently enjoined and defendant Matlock barred from the industry.