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DALLAS -- Waxahachie, Texas-based H & H Oil Co. was drawn into two federal lawsuits yesterday along with a Fort Worth, Texas real estate broker and a pair of Texas lenders. The suit was filed by defaulting borrowers alleging that their properties were "flipped" in an effort to defraud the U.S. Small Business Administration.
In June, acting on behalf of two companies that owned gas stations and convenience stores in Fort Worth, attorney Stephen Geis filed suit in state district court in against H&H Oil Co. and Citizens Commercial Real Estate Group, alleging his clients were duped into paying inflated prices for the facilities -- both of which were financed with SBA-guaranteed loans, according to the Dallas Business Journal.
H&H Oil denies the allegations.
One suit, filed by Aksun Enterprises Inc., of Fort Worth, names Amresco Independence Funding Inc., of Dallas, and a second, filed by Fort Worth-based Shemaris Inc., names Bank United, of Houston, now part of Seattle-based Washington Mutual, as defendants and participating lenders in the SBA's guaranteed loan programs.
Both suits allege that Mo Akhtar, a principal in Citizens Commercial, conspired with brokers, lenders, bankers and others to inflate the value -- and the SBA loan guarantees -- by buying and selling the properties at escalating values based on "false or fabricated" financial information.
In both cases -- one involving a Conoco convenience store in Fort Worth, and the other a Speedy Bees unit also in ort Worth -- Geis said his clients were given inflated revenue figures and not told the property had contamination problems.
Shemaris' principals were identified as Sewani Sherali and Julia Guzman. Guzman also was named as a plaintiff with Mohammed Hafiz as representatives of Aksun Enterprises. The lawsuit said Guzman, Sherali and Hafiz relied on trust they had established with the brokers and other defendants and were unaware of the inflated figures.
"Defendants' conspiracy was aimed at securing inflated SBA funding on the stations to facilitate flips at the inflated prices, while dumping the economically infeasible businesses on Shemaris," one lawsuit says.