"Anytime you have a company that owes creditors and you take money from the company to pay someone else, that's fraud," Knauer told DTN. "That's especially true when the company is insolvent and doesn't have assets left to pay everyone." Knauer said the lawsuit is the first of several he is planning to file.
Fifth Third froze Eastern's accounts Nov. 2 "after uncovering an alleged check kiting scheme and as much as $2.5 billion in fictitious sales to related entities," and Knauer's investigation revealed the company had been writing checks for fictitious transactions since at least 2008, Micik reports. A lawsuit in Cincinnati alleges that Downs converted the checks criminally, and under Indiana law, the trustee could be entitled to three times the monetary damages, about $3.73 million -- in addition to recovering the $1.2 million plus interest," Micik writes. (Read more)