Federal investigators allege that it is a company "permeated with fraud." It's founders say it is a victim of the "meddlesome fervor" of a federal agency.
The Interbank Group of Herndon, Va., quickly became a major player in a little-known federal program that allowed foreigners to become permanent U.S. residents by investing up to $1 million in an American business. A $500,000 investment qualified in areas of high unemployment.
Set up four years ago by James F. O'Connor and James Geisler, Interbank promised to create hundreds of jobs in economically depressed West Virginia through its Invest in America program.
Like a rival firm, American Immigration Services of Greenbelt, Interbank told investors they could qualify with an investment not of $1 million or $500,000, but as little as $125,090.
Like AIS head Dennis Laskin O'Connor had come under the scrutiny of federal law enforcement officials.
O'Connor, then 23, and Bernard J. Coven, 82, were convicted in 1981 of attempted fraud O'Connor received a 10-year sentence and a $44,000 fine, Coven 10-year term and a $34,000 fine.
O'Connor told The Sun that he learned of the investor visa program from a client in a currency exchange business, and that he and Geisler spent six months developing investment plans that would qualify for the visa program. They set up business in West Virginia, where unemplolyment ran high, so visa applicants could qualify with a $500,000 investment.
Interbank signed up hundreds of visa applicants and began the process of gaining INS approval. The original application was turned down, but was approved by INS on appel, O'Connor said.
Interbank officials say they then got caught up in "meddlesome fervor," an INS overreaction to allegations against AIS. Suddenly, all of their applieations were in jeopardy.
Interbank had other probIems. Federal investigators raided the company's headquartes in September 1998. In an affidavit INS Special Agent Elizabeth M. Goyer said the agency had reason to believe Interbank was filing false statements with visa applications.
According to the affidavit, Interbank told visa applicants they could put up $150,000 or less, which would eventually be funded. Further, the affidavit states, "there is probable cause to related entities are permeated with fraud.
No federal action - criminal or civil -- has been Initiated against the company.
But Interbank is being sued by clients, including Mario Carbini of Santa Barbara, Calif., who filed suit this year in U.S. District Court in Los Angeles, accusing the firm of delaying the filing of his application, ultimately causing it to be rejected. Interbank did not respond to the lawsuit, and a judgment recently was issued in Carbini's favor awarding him a refund.
Carbini, an accountant, sold his apartment in Italy and put up his savings to pursue his dream of becoming a U.S. citizen. He signed up for the Interbank program in: August 1997, paying $20,000 in fees and $100,000 that was to go to an American business.
Carbini, 55 said he had no illusions that his investment was a good one. He went ahead, he said, because he wanted the chance to move permanently to the United States, eventually to become an American citizen.
"We wanted the green card he said. "You don't invest with someone you don't know. You can buy shares of Ford or Microsoft."
Carbini said he checked out other Interbank deals, found they were approved, then "gave money to them like it was nothing."
In September 1997, Interbank filed an investor visa petition on Carbini behalf. He believed would be approved, he said, because similar petitions had been.
On Nov. 11, 1998, the INS denied his petition.
"I'm very angry with INS, and also with Interbank," Garbini said. Interbank 'took advantage of the situation and the INS ... didn't give a damn about us."
He said he invested because of his faith in the U.S. government.
"It's the best democracy in the world. You trust it blindly. I saw the United States as my final shore," Carbini said. "Now, "I don't know if I'm living a nightmare."
Other pending lawsuits allege that Interbank officials used millions of dollars in investment funds to keep the firm and its subsidiaries in business. Those funds, up to $150,000 per investor, were to have been placed in escrow accounts that were not to be used unless the investors obtained green cards.
None received green cards, and the money has been spent, court records show.
In a letter to an investor, company officials attempted to explain their actions: "Interbank was facing a very difficult decision. Businesses cannot survive without cash flow."
In September, the company sought Chapter 11 bankruptcy protection.
Interbank promised to provide hundreds of new jobs in West Virginia, but never open its doors there. Company officials blame INS.
For investors, recovering their money may be only a dream.