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Financing Sources of Cyberco Sue Huntington Bank Alleging Aiding and Abetting

CHATSWORTH, Calif.--(BUSINESS WIRE)--On June 22, 2007, two leasing companies, El Camino Resources, Ltd. and ePlus Group, Inc., and a Missouri based national bank, Bank Midwest, N.A., filed a lawsuit against The Huntington National Bank in the United States District Court for the Western District of Michigan (El Camino Resources, Ltd., a California corporation; ePlus Group, Inc., a Virginia corporation; and Bank Midwest, N.A., a national banking association v. The Huntington National Bank, a national banking association, Case no. 1:07-CV-598) alleging that Huntington Bank aided and abetted Cyberco Holdings Inc. in perpetrating a multi-million dollar financial fraud built around the financing of phantom computer equipment. The Complaint points to Cyberco’s use of the depository and wire-transfer facilities of Huntington Bank to launder monies illicitly obtained from other financial institutions with the bank’s knowledge and cooperation as essential to Cyberco’s scheme. The Plaintiff group alleging this financial malfeasance by Huntington Bank, includes financial companies based in California, Missouri and Virginia, shows just how wide Cyberco spun its web of financial fraud.

According to the lawsuit, Huntington Bank became aware of Cyberco’s suspicious activities in 2003 and told it to leave the bank in January, 2004. However, at that time, instead of freezing Cyberco’s accounts, or denying further access to Huntington Bank's facilities, Huntington Bank put in motion a plan that allowed it to take $17,000,000.00 of accelerated pay-downs from Cyberco in the months just prior to the collapse of the fraudulent scheme so as to repay entirely Cyberco’s loans with the bank. The Plaintiffs claim Huntington Bank’s improper actions propped up the fraudulent scheme of Cyberco which, without Huntington Bank’s help would have collapsed in early 2004, leaving the bank unpaid but saving others from being victimized. The lawsuit specifically claims that Huntington Bank’s assistance of Cyberco resulted in each of the Plaintiffs being added to the list of Cyberco victims. The Plaintiffs collectively funded $32,000,000.00 in computer equipment advances to Cyberco, from March to November, 2004, while Huntington Bank during that same period was taking its $17,000,000 out of Cyberco.

The Complaint maintains that the $17,000,000.00 paid to Huntington Bank came from the tens of millions that washed through Cyberco’s accounts at Huntington Bank in the months just prior to Cyberco’s collapse. Of these funds, $50,000,000.00 came to Cyberco almost entirely from a single source, Teleservices Group, Inc., a sham company set up by Cyberco that was not a legitimate customer of Cyberco, a fact which the plaintiffs allege Huntington Bank knew. The lawsuit states Huntington Bank was alerted to these transactions, questioned them, but ultimately refused to take the steps it was required to take under federal law to stop them by freezing Cyberco’s accounts. The plaintiffs allege that Huntington Bank knowingly allowed these transactions to be processed through accounts at the bank after having been served with Federal Grand Jury subpoenas in May, 2004 that were specifically directed at Cyberco’s financial activities.

Teleservices, according to the lawsuit, was controlled by Cyberco and was the vehicle through which Cyberco laundered tens of millions of lease and loan proceeds stolen from leasing companies and banks to purchase what turned out to be non-existent computer equipment. Teleservices would then take the advances made under the leases or loans and wire them to Cyberco’s accounts at Huntington Bank, or make payments directly to Huntington Bank as pay-downs on Cyberco’s loans. The Plaintiffs claim Huntington Bank knew the flow of monies from Teleservices was illicit but chose to turn a blind eye, even to the extent that between July and October, 2004 Huntington Bank took $7,145,000.00 in payments directly from Teleservices and applied them to Cyberco’s loans.

Inquiries should be made to:

     John E. Anding
     Drew Cooper & Anding, PC
     Ledyard Building, Suite 300
     125 Ottawa Avenue, NW
     Grand Rapids, Michigan 49503
     (616) 454-8300 or (616) 581-9271

     John A. Graham
     Jeffer, Mangels, Butler & Marmaro LLP
     1900 Avenue of the Stars, Seventh Floor
     Los Angeles, California 90067-4308
     (310) 201-3523

This press release is issued solely by Plaintiff El Camino Resources, Ltd., a California Corporation, with its principal place of business located in Chatsworth, California, and not on behalf of any other party. El Camino Resources International, Inc. (ECR) was founded in 1979 to provide technology equipment leasing/financing and computer trade-in opportunities for businesses and organizations. ECR specializes in mainframes, workstations, client/servers, storage devices and peripheral equipment from such industry leaders as IBM, Sun, and other selected manufacturers. El Camino’s sister company, Infinite Computer Group LLC, provides a range of maintenance and information technology services to U.S. companies. ECR’s Mexican subsidiary is a general lessor, leasing equipment over a broad range, varying from high-tech to low tech material handling equipment.

Contacts
Drew Cooper & Anding, PC
John E. Anding, 616-454-8300 or 616-581-9271
or
Jeffer, Mangels, Butler & Marmaro LLP
John A. Graham, 310-201-3523