Henderson resident suing Credit Suisse for alleged 'loan-to-own' scheme

A Henderson resident is suing Credit Suisse on behalf of homeowners at Lake Lakes Vegas and three other resorts, claiming the Swiss bank gave investors “predatory” loans in an attempt to take over the resorts.

The lawsuit, filed Sunday in federal court in Idaho, seeks $24 billion in damages for the alleged “predatory” loan-to-own scheme and accuses Credit Suisee of racketeering, fraud, negligent misrepresentation, conspiracy, breach of fiduciary duty and other civil violations. The suit says Credit Suisse first tested its loan-to-own strategy at Lake Las Vegas.

“We believe the suit to be without merit, and we’ll defend ourselves vigorously,” Credit Suisse spokesman Duncan King said Monday.

The lawsuit estimates that it represents a class of 3,000 owners of land and homes at four resorts.

The plaintiffs include L.J. Gibson of Henderson, who lives at Lake Las Vegas but also owns property at the Tamarack Resort in Idaho and the Ginn sur Mer project in the Bahamas. Plaintiff Beau Blixseth owns property at the Yellowstone Club in Montana.

The lawsuit claims the bank got money for the loans through a separate illegal scheme to help Iran get around international trade sanctions.

Credit Suisse paid a $536 million fine last month to settle a criminal case accusing the bank of a scheme to strip identifying information from $1 billion in wire transfers to Iranian banks in violation U.S. economic sanctions. Bank clients included Iran’s Atomic Energy Commission, “which purportedly oversees Iran’s attempt to build a nuclear weapon.”

The Iranian scheme enabled Credit Suisse to increase its capital and ability to lend to the resorts and others, according to the lawsuit.

The loan-to-own scheme “depended on artificially inflating the value of a resort project in violation of U.S. law” by using an appraisal method created by Credit Suisse and real estate firm Cushman & Wakefield of New York. The lawsuit said the appraisal method violates federal law and regulations.

Credit Suisse is accused of obtaining money for loans from syndicated lenders and persuading developers and homeowners to obtain “crushing” debt loads that often were not repaid, allowing Credit Suisse to take over the property.

The loans generated “tens of millions of dollars” in fees for Credit Suisse, the lawsuit said.

Credit Suisse made loans to Lake Las Vegas developer Transcontinental Corp. which is owned by Ron Boeddeker. The resort occupies 3,600 acres in Henderson around a man-made lake.

The investment bank knew it was burdening Lake Las Vegas with so much debt that the borrower would default, according to the lawsuit.

The Swiss bank nominated itself as the loan administator so that it gained control of the project, court papers said. The Swiss bank persuaded Boeddeker to accept the appointment of Frederick Chin as chief restructuring officer, but the defendants were conspiring to foreclose on Lake Las Vegas, according to the lawsuit. Lake Las Vegas and affiliated companies filed for Chapter 11 bankruptcy in Las Vegas in 2008.

The defendants closed shops, restaurants and two golf courses at Lake Las Vegas.

Gibson’s residence lost more than $1 million through a decline in the value of her home and the loss of two properties “that sit next to dead golf courses,” the court papers said.

Attorneys Robert Huntley of Boise, Idaho, Peter Neumann of Reno and five others filed the lawsuit.

Contact reporter John G. Edwards at jedwards@reviewjournal.com or 702-383-0420.