USA Capital
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USA Capital was a lending service helmed by Tom Hantges, Joe Milanowski and Paul Hamilton. The company solicited money from investors which it used to make short-term, high interest loans to property developers. This type of loan is sometimes called a trust deed loan.
Investors had fractional interests in the loans for which they received regular interest payments, typically in the range of 11-14%. The loans, although not risk-free, were collateralized with real estate and were considered a generally safe investment. Most loans were repaid in 12-18 months.
On April 13, 2006 the company surprised over 6,000 investors when it declared bankruptcy. At the time of insolvency the company was managing $962,000,000 in investor assets, making it the biggest bankruptcy case in the history of Nevada.
Subsequent investigation revealed that many of the loans were in default, and that the company had been paying investors with money from other loans. Bankruptcy court judge Linda Riegle likened the operation to a Ponzi scheme.[1] The same judge ordered the appointment of a trustee to oversee matters when it was disclosed that Hantges and Milanowski owed $9.8 million to a reputed former associate of Gambino crime family boss John Gotti.[2]
USA Capital's management was also found to be directly involved with several of the developers that were being issued loans, a conflict of interest most investors were not aware of.
In November, 2006 some investors organized themselves as the USA Capital Lender Protection Group. By March of 2007 membership had grown to over 750.
On March 15, 2007 New York private equity firm Compass Partners announced they were the highest bidder at a bankruptcy court auction. [3] The company paid $67 million for the right to service most of the outstanding loans, and for the assets of the USA Capital First Trust Deed Fund. Many investors were opposed to the involvement of Compass.
The same month, investors began to report they were receiving letters from the FBI letting them know that they were considered possible victims of a crime and that the company was under investigation.
On June 7, 2007, Michael Carmel, a Chapter 11 Trustee was appointed in the Thomas Hantges Bankruptcy Estate. The Trustee retained Brian Shapiro, Esq of the Law Office of Brian D. Shapiro, LLC as his local Las Vegas Bankruptcy counsel and Robbin Itkin, Esq. of the Law Office of Steptoe and Johnson as his general counsel. They are currently investigating the assets and transactions of Thomas Hantges.
