Facts

In February 2008, Searay Development S.A. De C.V. entered into a Deposit Agreement with Amerivest Trust Group LLC. The purpose of the deposit was to serve as collateral for a $40 million construction loan that Amerivest was to secure for Searay's development of a project in Mazatian, Mexico. After the deposit was made by Nest Egg Properties Ltd., (a Searay-related entity), Searay entered into a Construction Loan Agreement with ARA Capital, S.A. de C.V., Sofom, E.N.R. (ARA Capital). Defendant Reed Diehl, a former NFL football player and a director of both Amerivest and ARA Capital, served as the liaison between Searay and Amerivest/ARA Capital.

In March 2008, the plaintiffs filed suit for breach of contract, fraud, and related causes of action. The plaintiffs immediately obtained protective orders pertaining to bank accounts, equipment, real estate, and personal property held by Amerivest and Diehl.

PLAINTIFFS' CONTENTIONS:
Plaintiffs contended that the financing funds never materialized and the defendants failed to return the deposit despite repeated requests.

DEFENDANTS' CONTENTIONS:
Defendant Reed Diehl pled guilty to federal wire fraud charges and was sentenced to several years in a federal prison camp.

Result

After two years of litigation, but shortly after Diehl pled guilty, the parties agreed to a stipulated entry of judgment for $2,046,340, plus 10 percent interest (and anti-bankruptcy protections) representing full restitution for the $1.4 million deposit as well as the entirety of plaintiff's legal fees and costs.

Other Information

FILING DATE: March 28, 2008.