Magnolia Financial Group awarded $3 million after court finds former client committed fraud

By Charmaine Little | Jun 5, 2018

NEW ORLEANS – A financial group was awarded approximately $3 million after the U.S. District Court for the Eastern District of Louisiana determined one of its clients committed fraud, according to court documents filed on May 14.

NEW ORLEANS – A financial group was awarded approximately $3 million after the U.S. District Court for the Eastern District of Louisiana determined one of its clients committed fraud, according to court documents filed on May 14.

Magnolia Financial Group (MFG) filed a lawsuit against defendants KCI Investments LLC, Kenneth Antos and David Becklean after they failed to pay a secured promissory note with MFG for $2 million with a 15 percent interest rate per annum.

Becklean took out a security agreement for MFG and pledged his interest in the proceeds of the agreement among Twin Towers Trading Site management, Becklean, SMG Group and other entities. Becklean, Antos and KCI then borrowed another $100,000 from MFG. Amid MFG’s lawsuit against the defendants, Twin Towers and MFG released a settlement agreement. MFG then continued its complaint against remaining defendants Antos, Becklean and KCI.

All three defendants were inactive during the pre-trial phase and never showed up for trial. The court subsequently struck their pleadings and defenses. MFG also submitted evidence of their argument as well as Antos and Becklean’s deposition.

The district court ruled in favor of MFG and granted it approximately $3 million. It first determined MFG was owed attorney fees “at the termination of the litigation per the notes and security agreement” and any costs associated with attorneys’ fees and costs MFG suffered. It also stated the notes between MFG, Antos, Becklean and KCI were indeed relevant and could be enforced against the defendants, who the court stated owed $2,947,518.81 plus attorney fees, all of which were included in the final judgment.

The district court also discovered Antos committed fraud on multiple avenues including his refusal to pay MFG the funds it is owed so Antos could “use these funds for his personal financial interests or that of his family.” The court pointed out the evidence MFG submitted to the court was also sufficient enough to prove Antos committed fraud against it. The court determined the fraud damage and loss equals $931,500.

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