PARKERSBURG - Two attorneys who allege both a Parkersburg man and chiropractor defrauded them into investing money in a proposed retail development have filed a new lawsuit alleging the local branch of an Columbus, Ohio-based bank, and its president, had a hand in perpetuating the fraud.
On May 4, Eric K. Powell and his brother, James, filed what is now the fourth lawsuit related to their dealings with The Endurance Group, a limited liability company overseeing development of a proposed retail outlet at the intersection of W. Va. 68 and Corridor D/U.S. 50 in South Parkersburg called Neal Run Crossing.
In this suit, the Powells allege that Larry Tracey, president of the Parkersburg branch of Huntington National Bank, failed to notify them of all high-dollar transactions, including a loan given to Dr. Michael W. Johnson, one of Endurance's original members, to fund the purchase of what is currently the only business on all of Neal Run's 41 acres.
According to the suit, which was filed with the assistance of his partner, Anthony Majestro, James notified Tracey on May 2, 2007, that he'd become a member of Endurance. In the lawsuit the Powells filed against Larry George and Endurance last year, records show James owned a 12.5 percent stake in Endurance after investing $750,000.
George, who co-founded Endurance with Johnson, started the company as managing member with a 75 percent share, and remained as the managing member after selling a portion of his interest to James.
Eric, who is sole proprietor of the Powell Law Offices in Parkersburg, did not invest any money into Endurance. Instead, his role was to aid in processing of Endurance's legal documents.
Along with the operating agreement, James submitted notification via fax that any transactions over $25,000 required his consent. The lawsuit alleges that Tracey "contracted and made promises" to James he would not only so honor his request, but also notify James of any exchange or transfer of Endurance's assets.
However, the Powells allege that two days later, Tracey and Huntington "had allowed checks in the amounts of hundreds of thousands of dollars to be presented and cashed" without James' consent. At no time did Tracey notify James or Eric Huntington would be unable to monitor Endurance's checking account.
Also, the Powells allege Huntington failed to notify them of an "unfunded land swap" given to Johnson to locate a Western Sizzlin Steak and More restaurant in Neal Run Crossing. Though the deed was dated July 17, 2007, it was not recorded until Sept. 25, 2007, which the Powells say Tracey and Huntington knew about, yet said nothing.
"The wording of the property transfer in question, which was recorded on September 25, 2007, clearly shows that the Defendants knew and conspired in the taking of the Plaintiffs' property, and that the taking was not done in good faith," the Powells state in their suit.
"Defendant Tracey's and Defendant Bank's assistance and conspiracy in the conveyance of property by an 'unfunded land swap' is clear evidence that Defendant Tracey and Defendant Bank knew that the transaction was improper, and that they had conspired, aided, abetted and/or illegally converted the Plaintiffs' property so that the Defendants could profit in making a multi-million dollar loan without the consent or agreement of the Plaintiff," the Powells add.
The Powells allege that the failure of Tracey and Huntington to keep them informed of financial transactions regarding Endurance has harmed both them, and Endurance. Similar to ones made against not only George and Johnson, but also Robert Keith Sheppard - the alleged front man George and Johnson paid a 10 percent finders fee to entice James into becoming an Endurance member - in a lawsuit filed earlier this year, the Powells accuse Tracey and Huntington of, among other things, fraud, grand larceny, embezzlement, false pretense, breach of contract and breach of fiduciary duties.
In addition to unspecified damages, court costs and attorney fees, the Powells seek reimbursement of all checks more than $25,000, a court order declaring the deed conveyed to Johnson as fraudulent and both it and the accompanying deed of trust held by Huntington be set aside.
As of presstime, the case had not yet been assigned to a judge.
Wood Circuit Court, Case No. 09-C-230