On Monday, several investment firms in the Twin Cities area were publicly accused of operating a fraud and racketeering scheme involving millions of dollars and forged bank records. The allegations were made in a suit filed in St. Paul by a Florida investment fund by the name of Integrity Dominion Fund.

Three codefendants from the Twin Cities area were named in the suit and accused of designing the scheme. The lawsuit accuses the defendants of breach of contract, securities fraud, misrepresentation and deceptive trade practices, as well as racketeering.

The complaint details that one of the principles of Integrity Dominion had been persuaded by Lazy Deuce's director of business and development-a Minneapolis man-as well as two of the named defendants to lend money to the company based on claims of the company's financial stability and unique position in the marketplace.

The defendants allegedly explained to Lazy Deuce that its financial success was founded on a strategy of make high-interest, short-term loans to companies with "exotic" collateral, as well the financing of lawsuits.

According to the compliant, Integrity was duped into making $3.6 in short-term loans to Lazy Deuce Capital Co. in Burnsville, only to be repaid $1.5 million after the company defaulted. Those loans were allegedly made between November 2010 and spring of 2011.

As sources note, Lazy Deuce and the other named defendants have also been named in a securities fraud lawsuit filed by the Securities and Exchange Commission back in October against a former Minneapolis police office and his advisory firm. Two of the codefendants were reportedly accused in a federal lawsuit in Massachusetts several years ago of organizing a fraud scheme, though that case was settled in 2010 after the pair denied wrongdoing.

Fraud charges can be complex and difficult to prove. Prosecution wages an aggressive effort in these cases to prove wrongdoing on the part of defendants, and will use any tactic available to achieve a conviction. Those facing fraud charges do well to secure representation, in order to ensure that their rights are protected.

Source: Star Tribune, "Burnsville finance company accused of fraud," Dan Browning, February 3, 2012.