A Bellevue-based investment firm is accused of amassing millions of dollars from investors, primarily Chinese nationals and immigrants, then failing to follow through with real estate developments and repayments.
Established about 10 years ago, iCap told investors it would build various real estate projects, including apartment complexes, mixed-use buildings and senior housing across Washington state, the Seattle Times reported.
ICap and its subsidiaries operated numerous affiliated businesses and allegedly owned at least 10 properties in the state, including Seattle, Tacoma, Bremerton, Lynnwood and Vancouver.
However, several of those sites allegedly remain undeveloped, despite assurances to investors, triggering a series of lawsuits.
The situation deteriorated earlier this year when iCap halted its monthly interest payments, citing challenges arising from the sluggish real estate market.
Former CEO Chris Christensen attributed the setback to rising interest rates and unforeseen market factors that increased costs and devalued properties.
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A King County judge barred iCap from selling properties and froze iCap’s accounts, leading the company to file for Chapter 11 bankruptcy last month. In the wake of the filing, Christensen resigned, and a third-party management firm, Paladin, assumed control.
The company owes between $100 million and $500 million to more than 2,700 individuals and entities, including the IRS and Snohomish County authorities. Among the affected parties are numerous Chinese investors, who have allegedly not been fully repaid, prompting a lawsuit this summer alleging that iCap had specifically targeted Chinese immigrants and nationals with misleading marketing tactics.
— Ted Glanzer