Ahern company accused of running Ponzi scheme in new lawsuit
Major insurance companies and banks are accusing Don Ahern and his company Ahern Rentals Inc. of fraudulently transferring money out of ARI to avoid paying a judgment owed in a prior lawsuit that accused ARI of running a Ponzi scheme.
Progressive Insurance, Geico Corp., Sherwin-Williams and several banks allege in the new lawsuit, filed in Clark County District Court on Friday, that ARI sold its assets and then transferred the proceeds to a trust Ahern controlled and other entities, for the purpose of avoiding having to pay a judgment the insurance companies and banks won against ARI in March in a California court.
The plaintiffs are seeking relief by having the court declare the transfers of funds fraudulent.
Billionaire Ahern is one of Donald Trump’s major donors who regularly hosts fundraisers for Trump in Las Vegas and is CEO of ARI.
Other plaintiffs filing the lawsuit include East West Bank, East West Bancorp Inc., People’s United Bank, N.A., People’s United Financial Inc., ADHI-Solar LLC, DV VNB Community Renewables Fund LLC, DV VNB Community Renewables Fund III LLC and Pardee Solar 1 LLC.
Ahern and attorneys for the plaintiffs in the case didn’t immediately respond to requests for comment.
The lawsuit alleges ARI raised funds from major insurance companies and banks to invest in nearly 14,000 mobile solar generators that were represented to be worth more than $2 billion dollars. However, the complaint alleges that most of those solar generators did not exist and of the small quantity that did exist, they were worth less than the number ARI presented to investors.
Once investors discovered that fraud was involved, they took ARI to the Superior Court of California in Los Angeles, where the judge sided with the plaintiffs. The judgment entered against ARI was nearly $850 million.
According to the complaint, while the California case was pending, Ahern, who the complaint says totally controls ARI, and others concocted a scheme in which ARI transferred hundreds of millions of dollars out of ARI to, among others, Ahern and a trust of which Ahern was the sole beneficiary and trustee.
Plaintiffs further allege that after transferring the funds, ARI claimed it would not be able to pay the California judgment because the company is insolvent.
The complaint states that Nevada law prohibits a distribution of money to shareholders that would make a corporation unable to pay its debts. Plaintiffs allege the transfer of funds from ARI to Ahern and his trust are in violation of this law.
Contact Annie Vong at avong@reviewjournal.com.
