Kenneth Rijock

Kenneth Rijock

Sunday, February 19, 2012

LAWSUIT SAYS ATLANTIC RIM FUNDING IS A PONZI SCHEME

The controversy over Atlantic Rim Funding Corp. continues; its supporters claim it is a bona fide investment source, but its detractors allege it is a Ponzi scheme or Advance Fee Fraud. A new civil suit may answer that question.

The Land Conservancy of Elkins Park, Inc., a Pennsylvania nonprofit corporation, last month filed an Adversary Complaint* in US Bankruptcy Court in Pennsylvania against Atlantic Rim Funding Corp., a Nevada Corporation, alleging that the defendant failed to provide funding, and thereafter failed to honor its contractual obligation to return the Plaintiff corporation's $600,000 escrow deposit on request.

The Plaintiff, who needed to raise $6.2m to pay off a mortgage, alleges that Atlantic Rim defaulted last July on an agreement to supply funding, and since that time has failed to return the Plaintiff's $600,000 escrow deposit, which allegedly is no longer under the control of the Defendant Atlantic Rim, and has been reduced to only $400,000. The Plaintiff was forced to file for bankruptcy when the financing fell through, and its ability to make a partial payment was lost when the promised return of the escrow did not materialise. The Plaintiff has filed an email from Defendant Dean Kennedy, in which he threatened to "lock-up" the missing deposit if suit was filed.

The Adversary Complaint alleges that Atlantic's principal, and officers, made misstatements of material fact regarding the company's ability to obtain funding, that the company is a shell, with no assets, office, employees, telephone number, or day-to-day business or finances. It also claims that Atlantic Rim is merely the alter ego of Defendant Kennedy, whose representations that he had access to funding through a trust holding $13bn in assets were relied upon by the Plaintiff, to its damage and detriment. After the funding date passed, Atlantic and Kennedy represented that they had no assets with which to repay the deposit. Do the $13bn in bonds actually exist ? If so, why can't the company easily refund Elkins Park Conservancy its deposit from other sources.

The Plaintiff has alleged that Atlantic Rim Funding is a Ponzi scheme, where deposits from failed funding contracts are applied to repay other investors who are owed their deposits. A Federal Judge has since ordered the return of the deposit, but it has not been forthcoming. A Motion for Contempt is pending. It is also alleged that there are a number of investors whose escrow deposits have not been timely returned to them.

One of Atlantic Rim Funding principals has made the following representations on the Internet; When taken in the context of this lawsuit, they raise significant questions about the company that remain unanswered:

(1) "Atlantic Rim Funding has over $13bn in assets to fund loans at this time."

(2) "Atlantic Rim is looking for good projects to fund ... we use our own money."

(3) "Atlantic Rim can offer a "no-qualifying" loan because Atlantic Rim approves all of our loans in-house."

(4) "Atlantic Rim provides loans from lines of credit that are established with the top global banks, secured by government securities provided in partnership with Atlantic."

We shall report on all major developments in this case for our readers.
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* Land Conservancy of Elkins Park Inc. vs. Atlantic Rim Funding Corp., Dean Kennedy and J. Mac Rust, Case No.: 10-19522-ELF, Adversary Case No.: 12-007 (ED PA). 

2 comments:

  1. Thanks for the latest updates. A very interesting and pertinent case study for financial litigation in regard to a potential ponzi scheme.

    ReplyDelete
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