Lake Michigan Credit Union allegedly scammed out of $4.7 million dollars by Michael Vorce
Big problems at Lake Michigan Credit Union
As if the financial crisis which has shut down financial giants Lehman Brothers and IndyMac isn’t enough, now the Lake Michigan Credit Union is having problems due to fraud.
Michael Vorce was indicted as the man who took several West Michigan financial institutions “for a ride.” According to allegations, he used a fake identity and fake collateral to bargain for loans.
The biggest loans were $9.2 million stolen from by Holland-based Macatawa Bank, $8.6 million by the Grandville branch of Irwin Union Financial and Lake Michigan Credit Union gave him $4.7 million.
Many Americans are up in arms with the financial industry. There’s no trust and no consumer confidence. If the allegations are true, men like Michael Vorce just throw fuel on the fire.
Here’s a report from Chronicle News Service posted on October 15th, 2007…
“I want to apologize to the banks, their employees and shareholders involved in this matter,” Vorce said in a written statement to The Press this afternoon.
The statement marked his first public statement since he came under investigation last winter amid allegations he had taken out millions in loans on expensive yachts which either did not exist or he did not own.
The former boat broker’s business interests included leasing The Wharf Marina, 501 N. Third in Grand Haven, although the lease was terminated because of nonpayment of rent and property taxes, the owner said. The Wharf Marina is privately-owned and is one of several marinas in the Grand Haven area.
Civil suits by at least six banks are expected to demand more than $16 million from the 30-year-old Grand Rapids man.
“I betrayed their trust and confidence as a borrower, and I am sincerely sorry for my actions which led to financial difficulties for the banks,” he continued.
“I am grateful to have established a working relationship with the banks to cooperate in securing and liquidating assets towards the repayment of my debts.
“I am deeply sorry for the disappointment and embarrassment I have caused my family. They are extraordinary people who exhibit integrity and moral character on every level, and undeserving of the consequences of my mistakes.
“I remain in Grand Rapids working to fulfill my obligations and to answer for my actions.”
Vorce is the subject of an ongoing federal criminal investigation, though he has yet to be charged with a crime.
Earlier today, it was revealed that two more banks are suing Vorce, accusing him and his companies of fraud and demanding he repay more than $5.8 million.
The suits were filed by Macatawa Bank, of Holland, and LaSalle Bank, now part of Bank of America of Charlotte, N.C.
Macatawa’s suit, filed today, said the bank will seek to recover $4.7 million. LaSalle’s suit asks for almost $1.2 million. Both suits were filed in Kent County Circuit Court.
They are similar to a federal lawsuit filed against him by Wachovia Bank in August. The still-pending suit by Wachovia asks for a judgment of $244,548.
All three suits allege Vorce secured the loans using yachts as collateral that he didn’t own or that simply didn’t exist.
The suit also names two of Vorce’s companies, Barrett Bruce Holdings LLC and West Michigan Yachts LLC.
Lake Michigan Credit Union, Irwin Union Bank and Bank of America are also expected to file suits against Vorce, said Robb Wardrop, his attorney.
A Press investigation in April found Vorce borrowed millions of dollars from more than a half-dozen banks, securing loans against a fleet of boats he either didn’t own or that didn’t exist.
LaSalle’s suit echoes the findings of that investigation.
“The representations made by Vorce and West Michigan were false in that the yachts identified in the security agreements … did not actually exist and/or Vorce and West Michigan had no right to use the Yachts as security,” the suit said.
Macatawa President Phil Koning said it has been leading a group of affected banks in collection efforts for the past seven months.
Today’s statement was the first official confirmation by Macatawa that Vorce was responsible for $4.7 million in loan losses it reported in March.
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Morgan Stanley or Goldman Sachs - who goes bankrupt first?
We’ve all heard the of the financial escapades with Bear Stearns, Indy Mac and the Federal Reserve system. We all understand that the system is currently crippled and that there are more “dead banks” in the water. (You can read about “Vultures Circling the Fed” HERE)
(This article gets reposted today)
So - with all that’s going on in the financial world - who’s going to drop first?
It is a forgone conclusion that SOMEBODY is going to drop. According to a Bloomberg report today, leading eoconomist Kenneth Rogoff stated, “We’re not just going to see mid-sized banks go under in the next few months, we’re going to see a whopper, we’re going to see a big one - one of the big investment banks or big banks.”
Now, doesn’t that make you feel all warm and cuddly inside? I mean, how can ANY bank go under? Who’s money are they stealing anyway? (If you’re an American taxpayer, the answer to that question is - YOU!)
According to the Securities and Exchange Commission - Morgan Stanley and Goldman Sachs are in MAJOR TROUBLE.
The criteria used is called “Capital Multiple” - basically it is the total net capital divided by minimum capital requirement. When investors are given a choice, they should always use brokers that have higher capital multiple. The higher the capital multiple, the better off the financial institution is to withstand losses.
Here are 17 major brokerage firms and what their capital multiple looks like:
- Edward Jones - 19.9
- Bank of New York Mellon - 15.8
- T.Rowe Price - 13.98
- Scottrade - 13.86
- OptionsXpress - 12.65
- Raymond James - 11.92
- Merrill Lynch - 8.62
- Fidelity - 7.93
- Bank of America Securities - 5.97
- ING Direct - 5.85
- Schwab - 5.85
- Lehman Brothers - 5.43
- E Trade - 5.00
- TD Ameritrade - 4.72
- Citi Smith Barney - 4.06
Goldman Sachs - 3.90
- Morgan Stanley - 3.21
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Traveler’s Insurance “4 Pillars” of strength
The “Four Pillars” include:
1. A stable and consistent regulatory environment, with a uniform set of rules applied to named wind coverage for coastal zones from Texas to Maine. This portion of the homeowner policy would be regulated by an independent federal body, with the remainder of the policy still regulated by the states.
2. Transparency in calculating insurance premiums, with risk-based, actuarially sound rates using approved standards and wind risk models, and a rating calculation mechanism to be applied if models and actual experience become misaligned over time.
3. Federal reinsurance mechanism for extreme events (such as hurricanes causing losses several times greater than those arising out of Hurricane Katrina), with the reinsurance made available to insurers at cost so there would be no taxpayer subsidy, and the savings passed directly to customers.
4. Encouraging stronger homes through federal guidelines for appropriate building codes and land use planning, with incentives for state and local adoption, plus enhanced construction technology and meaningful premium credits for customers who make their homes less vulnerable to wind damage.
“We believe these comprehensive principles provide the needed framework to assist America’s coastal families in preparing to repair, rebuild and recover from the aftermath of named storm catastrophes,” said Fishman. “We’ve held extensive discussions with key members of Congress, public officials at the state and local level, insurance agents and other industry leaders and appreciate the wide range of participants who recognize this as a viable solution to a challenging market problem.”
“As governor of a Gulf Coast state, I’m encouraged by the principles outlined with these four pillars,” said Mississippi Governor Haley Barbour. “With the projections of risk from future hurricanes, I’m committed to working with my fellow governors, Congress and others to find solutions to the current insurance market issues. We should not wait for the next major storm before solving the substantial challenges of coastal insurance availability and affordability.”
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Bankrupt companies list - Is your company going bankrupt?
With recession in America, many people are asking themselves: Is MY company going bankrupt? What’s going on in the financial markets? Where is MY 401K headed? Have I been duped? WHAT’S GOING ON AROUND HERE?!?!
Here are 4 simple ways you can find out if your company is going bankrupt - just look at the way their stock trades.
- Dept/income ratio. Most of the on-their-way-to-bankruptcy companies have a debt/income ratio more than 10. According to analysts ratio around 8 is good, but a double-digit ratio could make you reconsider.
- Debt/equity ratio. If debt/equity ratio is above 0.5 ( according to some sources above 1.0) the company is a bad candidate for buying their stocks – meaning that they *might* go bankrupt. Rate 1.0 means that the company has as much debt as it has equity. Company with the rate of 0.5 is considered a low-debt company.
- Short-term debt. If a company needs to repay any great short term debts with big interest rates there might be problems with the company – to make sure check their profit margin. It has happened that companies with short-term loans who are unable to get an extension will eventually end up going bankrupt.
- Interest coverage ratio. Interest coverage ratio is a operating income divided by last 12 months of interest payments. If a company can’t handle to pay their debt interest rates, be alarmed. Good ratio is anything above 4. If the rate is 1.0 or less, the company might be in trouble.
According to those parameters - where does your company stand? Morgan Stanley? ING Direct? TD Ameritrade? JP Morgan Chase? Wells Fargo? Bank of America/Merrill Lynch? Citigroup? Goldman Sachs? Bank of NY Mellon? State Street? PNC Financial? Capital One? SunTrust Banks? Regions Financial? Fifth Third? BB&T? KeyCorp? Comerica? Northern Trust? Huntington? First Horizon National? City National? Valley National? UCBH Holdings? Washington Federal? First Niagara?
As you can see, the list is ENDLESS! Why? Why are all these banks looking for help from bailout money?
Is your company going bankrupt? Or is it already?
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