The Securities and Exchange Commission filed a lawsuit this week alleging that a former business associate of James Biden, President Joe Biden’s younger brother, misled investors.
While the 12-count civil complaint does not accuse James Biden of personal wrongdoing, it involves a business deal that he was directly involved in, court records show.
The SEC accused James Biden’s business associate, Michael Lewitt and his fund, Third Friday Management, of “fraudulent conduct and gross breaches of fiduciary duties” to their fund and its investors, according to the 28-page complaint filed in federal court on Thursday.
The complaint alleges that from roughly January 2018 to March 2020, Lewitt went from investing in S&P 500 index options to making 45 separate loan advances that totaled more than $19 million to a distressed company that operated rural hospitals.
The SEC alleges, “Lewitt failed to disclose to the Fund’s investors” that he had taken a total of $30 million from the fund and invested it in a group of companies that invested in distressed health care companies and eventually went bankrupt.
The suit identifies the company that invested in the distressed health care companies as Platinum Global Health Partners, LLC and alleges that Lewitt is its “sole manager.” That company’s outside counsel is identified as George Mesires, who has represented James and Hunter Biden in the past.
In a separate lawsuit filed in 2019, Diverse Medical Management, a hospital corporation, sued Platinum Global Health Partners, Lewitt, Biden, and others in federal court in Tennessee.
That lawsuit alleges that Lewitt, Biden and others committed acts of fraud against Diverse Medical Management, which tried to create a sustainable business model that would save small rural hospitals from being shuttered. Diverse Medical Management alleged that their model could be replicated nationwide and provide an opportunity to provide both better medical care in rural communities and a profit.
Diverse Medical Management said that Lewitt, Biden and others’ business “was all a fraud.” They allege in their lawsuit that Lewitt, Biden and others “had two primary goals: (1) in the short-term, stealing Plaintiffs’ business model; and (2) stringing Plaintiffs along in order to drive” Diverse Medical Management into insolvency and take over the business themselves.
Michael Lewitt and George Mesires did not immediately respond to requests for comment.
Attorneys for Lewitt, Biden and their companies filed a counterclaim against Diverse Medical Management saying that they provided the firm with short-term funding, which was ultimately suspended when Diverse Medical Management “refused to provide Platinum Group and Third Friday with accurate financial due diligence materials or reasonable explanations why it was still operating at a loss and could not meet its payroll.”
The legal battle is currently on hold because of a bankruptcy filing of a related company that is still winding its way through the courts.
The White House did not immediately respond to a request for comment.
Source: | This article originally belongs to Nbcnews.com
