22 April 2006

RGJ.com: USA Capital bankruptcy filing leaves investors stunned

RGJ.com: USA Capital bankruptcy filing leaves investors stunned: "LAS VEGAS -- Investors say they are stunned, angry and frustrated at Las Vegas-based USA Capital, a short-term mortgage lender that filed for bankruptcy protection last week.
The lender, with $950 million in assets, filed for bankruptcy court protection on April 13.
The company, with an office in Reno and Incline Village, raised investment funds to make short-term mortgage loans secured by real estate development and commercial properties. Investors were attracted by interest rates of 12 percent to 14 percent on their investments and by the relative security of having real estate for collateral.
It's the latest in a series of private lenders who have failed in Las Vegas, including Harley Harmon Mortgage, Interstate Mortgage Group and Global Express Capital.
'Unbelievable,' investor Rich Maiorana, 55, who invested $50,000 in a USA Capital fund.
The bankruptcy filing 'just makes them look to be terribly dishonest,' Maiorana said.
Phyllis Resler, a widow and great-grandmother, works part time for a church to supplement her Social Security benefits. She has $56,000 invested with USA Capital.
'Help,' she said, laughing nervously. 'I can't earn and replace what I have at age 69. That will take a lifetime.'
Robert Ulm, a retired airline pilot living in Georgia, said he invested $200,000 with USA Capital and feels betrayed.
'It's illegal. It's a fraud. It's a cheat. It's a scam. That's what I think,' Ulm said.
Ulm invested money in six loans, called trust deeds, secured by warehouses in Albuquerque, N.M., and other types of property in Sacramento and Reno.
Ulm was surprised, because the company seemed to have a good reputation when Ulm learned about it"

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