Court Cases
Marc Levinson, an attorney representing investors in USA Capital likened the operation to a Ponzi scheme. The bankruptcy court judge Linda Riegle ordered the appointment of a trustee to oversee matters when it was disclosed that Hantges and Milanowski owed $9.8 million to a reputed former associate of Gambino crime family boss John Gotti.
In November 2006 some investors organized themselves as the USA Capital Lender Protection Group. By March 2007 membership had grown to over 750.
On March 15, 2007 New York private equity firm Compass Partners announced they were the highest bidder at a bankruptcy court auction. The company paid $47 million for the right to service most of the outstanding loans, and for the assets of the USA Capital First Trust Deed Fund. Many investors were opposed to the involvement of Compass.
The same month, investors received letters from the FBI informing them that they were possible victims of a crime and that USACM was under investigation. According to an investment prospectus distributed to the Diversified Fund investors all invested funds would be secured by real estate. This was not the case as at least one sizeable unsecured loan was made to an entity owned and controlled by one or more of the principals at USACM. As a result Joseph Milanowski accepted a plea bargain and was sentenced to 12 years in prison on one count of wire fraud.
USA Capital's management was also found to be directly involved with several of the developers that were being funded, a conflict of interest and the Nevada Mortgage Lending Division later issued an opinion stating that the profit participations USACM negotiated on its own behalf while originating the loans were contrary to Nevada law.
On June 7, 2007, Michael Carmel, a Chapter 11 Trustee was appointed in the Thomas Hantges Bankruptcy Estate. The Trustee retained Brian Shapiro, Esq of the Law Office of Brian D. Shapiro, LLC as his local Las Vegas Bankruptcy counsel and Robbin Itkin, Esq. of the Law Office of Steptoe and Johnson as his general counsel. They are currently investigating the assets and transactions of Thomas Hantges.
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