A developer is suing Bank of Utah for allegedly participating in a fraudulent scheme relating to a $5 million construction loan.
The lawsuit alleges that the bank intentionally misled the developer during the loan closing and when it came time to honor their obligations, the bank refused to do so. Instead, the bank chose to embark on a path of intimidation, extortion and attempted foreclosure to conceal the fraud in an attempt to force the developer to give up his contractual rights and potentially lose his entire net worth.
Another claim made in the lawsuit is that when the developer tried to sell the properties involved with this loan, the bank allegedly tried to foreclose certain properties and interfered with the developer’s efforts to get rid of the real estate.
In the lawsuit, bank executives allegedly showed up unannounced in the evening at the developer’s home and attempted to force the developer into signing new loan documents.
A second way the fraud was allegedly concealed involved an executive threatening the developer to file a false 1099 form with the IRA to cause the developer hundreds of thousands in legal fees to defend the wrongful tax assessment. The lawsuit alleges amounts to extortion by Roger Shumway, executive vice president at Bank of Utah.
“Even putting aside the illegal conduct at issue, the actions of this particular work are among the worst that I’ve seen and I sue a lot of banks,” said Philip Jayfield, an attorney whose law firm filed the suit along with The Bridi Law Firm. “Even though this bank’s founding family may have a state holiday and gun, it won’t help them when we hold them accountable in front of a jury of their peers.”
Bank of Utah offers personal banking, business banking, home lending, trust management and investment services. There are 13 full-service branches and mortgage offices throughout the state.
