In a fierce legal battle, Western Alliance Bank is pushing back against a $60 million lawsuit filed by AHP Capital Management LLC, which accuses the bank of involvement in a mortgage loan scheme aimed at undermining property rights. The investment firm argues that the bank played a central role in a fraudulent operation to illegally seize its mortgage loans and their proceeds, but Western Alliance argues the claims are based on exaggerated and unsupported allegations.
The Allegations: Fraudulent Loan Pledges and Double-Pledging
At the heart of the complaint is a Mortgage Loan Sale Agreement (MLSA) between AHP Trusts, managed by AHP Capital, and Cymbidium Restoration Trust. AHP claims that while a portion of the loans was sold to Cymbidium, the true ownership of the loans was never transferred, and the loans were improperly pledged by Cymbidium and its affiliates, including Magerick LLC, to Western Alliance Bank. AHP further alleges that some of the loans were “double-pledged” to other creditors, including William Weinstein.
