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Feds Suing 5/3 Bank Save Email Print
Posted: 6:14 PM Jan 10, 2008
Last Updated: 6:14 PM Jan 10, 2008
Reporter: Associated Press

A | A | A

WASHINGTON (AP) -- Federal officials are accusing Cincinnati-based Fifth Third Bancorp of causing a union pension fund to lose more than $20 million in a Detroit real estate investment.
The Labor Department, which filed the lawsuit last month in U.S. District Court in Detroit, says the bank mismanaged the development and sale of a property owned by the pension fund for Operating Engineers Local 324.
The lawsuit, filed Dec. 28 and announced Thursday, said the Troy, Mich.-based pension fund bought the property for $5 million in 1999.
Acting on a strategy created by Fifth Third Bank, the fund invested more than $23 million to renovate the Detroit property, the suit says. The bank "reversed its development strategy and sold the property to the Cavaliere Group for only $4.5 million in 2004," by which time the fund had invested more than $28 million, the department said.
"The department's action protects the workers, retirees and their families who are counting on the (pension fund) for their retirement security," Bradford P. Campbell, a Labor Department assistant secretary, said in a statement. "We are seeking to recover, with interest, all the funds that are owed to the pension plan."
Fifth Third operates in Ohio, Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West Virginia, Pennsylvania and Missouri.
"We believe the case is without merit," said Debra DeCourcy, a company spokeswoman, declining to comment further because the litigation is ongoing.
Shares of Fifth Third rose 53 cents, or 2.3 percent, to $23.69 Thursday.

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Posted by: Esther Location: Florida on Aug 27, 2008 at 08:51 AM
I WISH SOMEONE EXPLAIN TO ME WHY BANKS APPROVES "SHORT SALES" TO "INVESTORS" INSTEAD OF GIVING THAT SAME OPPORTUNITY TO THE ACTUAL MORTGAGE CLIENT? THIS WILL AVOID "FRAUD" AND WILL HELP THE ACTUAL CLIENTS TO SAVE THEIR HOMES?? I REALLY CANNOT UNDERSAND THIS. I KNOW BANKS HAVE NO HEART... BUT THIS SHORT SALE BUSINESS IS STUPID... GIVE THE BORROWERS THE CHANGE TO SAVE THEIR HOMES.

Posted by: sam Location: holt on Jan 11, 2008 at 09:52 AM
why invest so much in anything at this point in time.the economy is terrible.for all we know we are in a ression right now.housing is not doing well,the boom get rich schemes are over with.people lost to much.no one wants to take the chance.to many are homeless,way to many jobs went over seas,we are in endless wars,costing billions.if one bussiness leaves another state to come to mich,it will hurt that state.we just aren't going to see many jobs in mich.the usa is at a standstill,many peoples lives are on hold.sounds like who ever invested,did not make good bussiness choices.money is tight,not enough jobs,no one is buying much.why invest in something that is going nowhere fast.every pennie will be needed for thoes retireing,as the economy is failing.sounds like someone wanted to get rich,no matter who gets hurt.but our gov does it all the time,so it must be alright.one of thoes deals.

Posted by: James Location: Stockbridge on Jan 10, 2008 at 08:01 PM
Gee, its not my for taking a risk. I want you to pay for listening to what I want to do.

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