GRAND RAPIDS, MI – Michael Vorce, alleged yacht broker and convicted con artist, has filed a federal lawsuit against Lake Michigan Credit Union for lack of oversight allowing it to get millions in loans for non-existent boats.
The credit union had previously filed a lawsuit against Vorce, who is serving about half of a 10-year prison sentence. Vorce himself filed a 62-page lawsuit in the U.S. District Court in Grand Rapids. He said he filed it on behalf of the members of the credit unions.
The lawsuit is doomed to fail, Curt Benson, a Grand Rapids attorney and professor at Thomas M. Cooley Law School, said on Tuesday, February 12.
“I don’t want to laugh,” he laughed.
“It’s inherently – there’s a lot wrong with it. “
Related guest column: Michigan Credit Union League: Michael Vorce lawsuit stories add insult to injury
The bigger problem is that Vorce, who points out in the lawsuit that he is not seeking damages for himself but for members of the credit union, would practice law without a license, Benson said.
If Vorce were to seek damages for himself, he would be in trouble as well. He made numerous confessions, in court and in trial. The law prevents a plaintiff from winning if they have to prove that their own illegal conduct caused the controversy, Benson said.
Vorce, as the owner of West Michigan Yachts, lived the high life with a sprawling home in Alpine Township and a condo in Florida. He got millions of loans for fictitious ships. His house of cards collapsed in 2007 when federal agents raided his Grand Rapids business.
J. Terrance Dillon, a credit union attorney, was unavailable Tuesday to comment on the recent filing, his office said.
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“LMCU defendants granted loans based on fake serial numbers that were never verified, resulting in millions of dollars in loans for boats that did not exist,” Vorce said, citing a pre-sentence report. prepared before his conviction.
“The success of the fraud depended on the continued granting of new, higher dollar loans under the guise of an ever-increasing boat inventory. The LMCU defendants repaid the existing loans with the proceeds of new loans made to Vorce, thereby increasing the risk and exposure (of the members of the credit union), ”Vorce wrote.
In a “Facts” and “Background to LMCU Defendants Fraud” statement, Vorce said he owned businesses in the Grand Rapids area, including West Michigan Yachts and Barrett Bruce Holdings, LLC, which he used to buy and sell boats.
“In 2003, Vorce’s boat business was in dire financial straits,” Vorce wrote.
“Based on his experience and relationship with banks, Vorce believed he could solve the company’s financial problems if he got cash injections. He embarked on a scheme to ultimately acquire this money from the Lake Michigan Credit Union, based on questionable documents and transactions that were not verified.
Using his two companies, “Vorce’s plan was to take out loans on non-existent, already funded and / or non-Vorce boats, and used the proceeds to pay off creditors and make investments.
In March 2007, he had obtained fraudulent loans of $ 4.7 million “directly as a result of the acts and omissions” of the credit union, he said.
He had previously co-founded another company, Intelepeer, Inc., an Internet phone company. At the end of his criminal case, all of the company’s shares except the 2 million shares were liquidated. He said the shares were obtained by fraud, but LMCU sought to protect its legal interest in the shares.
Vorce, in Milan federal prison, named numerous defendants, including CEO Sandra Jelinski, several vice-presidents and members of the board of directors.
He said the credit union was a “racketeering business” because it “willfully and / or negligently” allowed Vorce to rip off the credit union. He said the credit union made loans based on “fake serial numbers that had never been verified, resulting in millions of dollars in loans for boats that didn’t exist.”
He brought a lawsuit on behalf of the “members (who) fell victim to the staggering failure of the LMCU defendants to properly and legally operate a federally insured financial institution, forced to bear the economic consequences of their misconduct,” which persists to this day. “
Vorce detailed several transactions that he said should have drawn suspicion from bank workers.
“Despite all that was known, obvious and or deliberately ignored by the LMCU defendants, they continued to do business with Vorce and took no action to reduce the fraud or report it to state or federal authorities,” Vorce wrote. .
In November 2008, the federal indictment against Michael Vorce listed $ 4.7 million in Lake Michigan Credit Union loans for 16 boats – 13 that did not exist. A list of loans from other financial institutions is available in the indictment.
Email John Agar: firstname.lastname@example.org and follow him on Twitter at twitter.com/grpressagar