“The company has been and will continue to cooperate fully with authorities and looks forward to both addressing these issues in the appropriate forum and completion of the government inquiries. In the meantime, the company continues to work diligently during these difficult economic times to maximize the value of fund assets for the benefit of investors.”
But at least two Newport Beach families argue the company isn’t maximizing anything about their assets and have filed a petition in federal bankruptcy court to get some, if not all, of their money back. John and Cynthia Gates are petitioning for $1.642 million and James and Wendy Erickson are seeking $300,000. A third party, Noramae Munster from San Pedro, is petitioning the company to fork over $600,000.
MKA takes investments from the public, bundles the money and invests it with real estate developers. The profits from the property are then distributed to investors according to the order they put in the money, and based on how much they invested.
The Gates family sued the company last year and their case is in arbitration.
Earlier this month, a Seattle-based firm, Freestone Capital Partners LP and its affiliates, won a judgment against MKA’s Chief Financial Officer Michael Abraham and fund manager Jason Sugarman.
MKA did not pay back the money it owed to Freestone, a judge ruled, and Abraham was ordered to pay back $26.3 million plus interest and Sugarman was ordered to pay back $5.97 million plus interest.
Several people contacted who said they were clients of MKA have reported investing money, and when they failed to see satisfactory, or any return, on their investments, failed to get their money back when they requested it.
The Gateses’ lawsuit alleged the company was operating a make-shift Ponzi scheme to stay afloat, taking on new investors to pay out returns for older ones.
Federal authorities declined to comment on any possible investigation into the company.
Reporter JOSEPH SERNA may be reached at (714) 966-4619 or at firstname.lastname@example.org.