Capital Factors of Boca Raton claims it lost US$30 million because of fraudulent transactions arranged by a New York City jewellery wholesaler.
In a federal civil suit filed in New York, Capital Factors maintains that Cosmopolitan Gem Corp. set up transactions, beginning in 2001, to help its president, Joshua Kestenbaum, recover US$12 million that he lost in the stock market.
The suit, filed on 13 August in US District Court for the Southern District of New York, names as co-defendants three Cosmopolitan customers and two New York jewellers who collected payments for Cosmopolitan.
Capital Factors, a subsidiary of Memphis-based Union Planters Corp.(UPC), maintains the "defendants' fraudulent scheme" violated the Racketeer Influenced and Corrupt Organizations Act (RICCO).
Capital Factors has asked the court for a trial. It is seeking restitution of "not less than US$30 million" and punitive damages of "not less than US$100 million."
